NEW YORK, April 1 Goldman Sachs Group Inc
has registered a fund that invests in risky credit products as a
publicly traded business development company, a way for the bank
to avoid some regulations that would otherwise limit its
Goldman's Liberty Harbor Capital LLC unit will invest in
middle-market companies that have weak credit ratings and are
underserved by banks, according to a registration filing on
Friday with the U.S. Securities and Exchange Commission.
Liberty Harbor typically invests in bonds and loans that are
not rated by credit ratings agencies, but would be considered
less than investment-grade.
Reuters first reported on Goldman's plans for the Liberty
Harbor business in January.
Goldman does not expect Liberty Harbor to be subject to the
Volcker rule, which would restrict its ability to sponsor or
invest in such funds, the bank said in the filing.
Business development companies are specifically exempt from
the Volcker rule.
Liberty Harbor also qualifies as an "emerging growth
company" under the JOBS Act, which will allow it to "take
advantage of...reduced reporting and other burdens" that would
otherwise be applicable to a publicly traded firm.
Liberty Harbor will mainly invest in companies with adjusted
earnings of $5 million to $75 million a year, across a variety
of sectors. Its investments will range in size between $5
million and $50 million, and last from three to 10 years.
Goldman provided seed funding to the business on Nov. 15,
and since then Liberty Harbor has invested about $73 million in