Secondary fund-raising activity points to another record year for transactions in 2005. The latest evidence comes from a large fund closing by New York-based Goldman Sachs (NYSE: GS), which announced it closed GS Vintage Fund III with $1.5 billion in commitments.
The firm says that LPs in the new fund include institutional and private investors in North America, Europe, Asia and Australia and that the GS family of Vintage Funds now includes more than $3 billion in managed assets.
During the fund-raising, Goldman Sachs completed several transactions from the fund, including a $490 million deal with French financial services group Societe Generale. Goldman purchased SG Capital Europe Fund I and SG Capital Europe Fund II for $270 million. The management team from the SG Capital Europe fund will continue to manage the funds as general partners, with Goldman Sachs serving as a limited partner.
Goldman has also pledged to invest $220 million in a new fund that will be managed by SG Capital Europe.
Goldman Sachs’ recent fund-raising activity follows that of New York-based Lexington Partners, which previously announced plans to raise its sixth dedicated secondary fund this year for up to $2.5 billion.
Also, late last year, AXA Private Equity announced it closed AXA Secondary Fund III with $1.04 billion. Pantheon Ventures closed on a $900 million secondary fund, Pantheon Global Secondary Fund II. Credit Suisse First Boston expects to seek a combined $1.85 billion in three separate secondary funds.
Overall, secondary private equity investors raised about $5.5 billion for new funds in 2003 and about $2.7 billion in new funds last year, according to Thomson Venture Economics (publisher of PE Week).