Goldman Sachs is building a team to raise funds for third-party private equity firms, a move that will put the investment bank in direct competition with placement agencies like those run by Credit Suisse, UBS, Greenhill and Probitas Partners, according to several sources.
Goldman has helped private equity firms raise funds in the past but more on an “ad hoc” basis, said a person with knowledge of the situation. The investment bank declined to comment on which funds it has raised in the past.
The team will be separate from Goldman’s in-house fundraising group that raises internal Goldman funds, the person said.
The investment bank declined to comment other than to say, “[we] have had this business for a number of years [and] we are interested in growing it”.
A source close to the recruiting firm leading the search said Goldman has “disparate teams that raise money for certain funds and clients” and the investment bank wants to “institutionalise” a fundraising operation for private equity. The executive said the investment bank has “people doing that for hedge funds”.
The source said Goldman intends to build a team of “five to eight” people to raise funds for private equity firms. Goldman declined to comment about the size of the team.
Goldman may be looking to take advantage of the crowded fundraising environment this year, said one placement agent source with no connection to the recruitment effort.
It’s not clear if Goldman’s team would stick strictly to private equity, or also work with real estate and infrastructure funds. Also not clear was the size of funds Goldman would work on, or if, for example, it would only raise funds that operate in different market segments to its own.
Last year, Evercore Partners got into private equity fundraising by buying the private funds business of Neuberger Berman for an undisclosed amount. The team, headed by Richard Anthony, is based in London. Credit Suisse has one of the largest private equity fundraising groups in the industry, and other investment banks including Lazard and UBS have long had teams to raise private equity funds.
Many other banks, however, have in recent years been winding down or spinning out their placement groups in light of a slowed fundraising environment and increased scrutiny from US lawmakers.
Citi, Deloitte and Merrill Lynch Bank of America were among those to wind down or reduce placement activities. The changes at these groups have in turn seen some fundraisers join rival groups or spin out to form boutique shops.