Goldman targets $5bn float for Petershill private equity assets

LONDON: Goldman Sachs plans to list the assets of Petershill Partners, cashing in on a private equity boom with a deal which could value the investment vehicle at more than $5 billion.

Petershill, which takes minority stakes in alternative assets managers including private equity and hedge funds, will be a standalone company operated by the Goldman Sachs Asset Management team, it said on Monday.

The deal would consist of a sale of around $750 million of new shares as well as existing ones to give Petershill a free float of at least 25% and make it eligible to be included in FTSE indices.

Goldman Sachs declined to give an estimated market value for the unit, but a source close to the deal said analysts put it at in excess of $5 billion.

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The deal is slated to take place around a month from now, the source said.

The company chose London to list because Petershill was founded in the British capital and because the financial centre's vibrant capital markets offer a strong fundraising opportunity, the source added.

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Private equity funds have soared in value over the past year as money pours in from investors looking for higher returns when interest rates are so low.

In July, British buyout firm Bridgepoint listed in London, with its shares now up more than 40% from its debut price.

The business takes advantage of its relationship with Goldman Sachs to source attractive acquisitions in alternative asset management, it said.

Profits from Petershill will go to its institutional investors, while Goldman Sachs will earn an operator fee for managing the company.

Goldman chief executive David Solomon wants to make the bank's revenues less reliant on often-volatile earnings from trading and advising on deals.

The Wall Street firm is trying to grow in areas like asset and wealth management, where it can earn recurring fees.

Petershill itself has no fixed assets but holds positions in 19 alternative asset managers with combined assets under management of $187 billion.

It pivoted its investment strategy to focus on technology in 2017 and is now shifting to focus on the effects of the COVID-19 pandemic by investing in areas such as healthcare, balance sheet repair and environmental, social and governance (ESG).