Goldman raises largest-ever LBO fund
NEW YORK (Reuters) - Investment bank Goldman Sachs Group Inc. (GS.N) said on Monday it raised a $20 billion private equity fund, the largest amount ever raised by a firm for leveraged buyouts.
Goldman said the total includes $11 billion from institutional and high net worth clients and $9 billion from the firm and its employees.
The fund, known as GS Capital Partners VI, makes Goldman the only investment bank to have a buyout fund on par with the largest private equity firms -- known in the industry as "mega funds"-- which dole out billions of dollars in fees to Wall Street every year through huge corporate buyouts.
Goldman's massive fund increases the chances of the firm competing with its most prized private equity clients. The fund also goes to show how successful Goldman has been with its leveraged buyout business.
Private equity firms buy controlling stakes in companies, restructure the businesses, and often sell them two to four years later. They typically borrow two-thirds of the money to make their purchases.
By comparison, the largest buyout fund to officially close in the last year was TPG, which raised $14 billion.
Blackstone Group closed a $15.6 billion fund last year, but reopened it to more commitments. Kohlberg Kravis Roberts & Co. is expected to close on a roughly $16 billion fund.
Among the prior investments Goldman has made with its buyout arm are food company Aramark Corp., burger chain Burger King Holdings Inc. (BKC.N) and software company SunGard Data Systems.
(Additional reporting by Mark McSherry)
