We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Goldman Eyes Private-Equity Firms; May Launch a New Fund
Read MoreHide Full Article
The Goldman Sachs Group, Inc. (GS - Free Report) is reportedly raising funds to purchase stakes in private-equity firms. The news, first reported by The Wall Street Journal, stated that the company’s asset management wing will initially acquire stakes through its Petershill II fund which raised around $1.5 billion.
Citing people familiar with the matter, the report stated that Goldman seeks to build a diversified portfolio of managers across various sectors and strategies. The New York-based Wall Street giant will focus on both medium and large size private-equity firms. In order to make such investments, Goldman is likely to launch a new fund.
Investors are interested in owning minority stakes in private-equity managers in order to capitalize on the stable cash flow of the firms and steady fees. For fund managers, a big investor brand name are more likely to attract institutional clients.
Notably, Goldman had commenced its fund-building process for Petershill II back in 2013. The fund aimed to acquire 10−20% stake in hedge fund firms, which hold $2−$15 billion in assets under management. Just like the first Petershill fund launched in 2007, the second fund targeted hedge funds with solid cash flows, and a good track record of at least 4−5 years.
Petershill II has managed to acquire stakes in several firms. These include the purchase of 10% stake in Fort Management LP, a $1.6 billion hedge-fund firm in Jan 2016 and a minority interest in Caxton Associates LP, a macro hedge-fund firm in Oct 2014.
However, the hedge funds industry currently does not seem lucrative. The first-quarter 2016 has been disappointing as heightened market volatility resulted in reducing investor risk tolerance that led to withdrawals from underperforming strategies. According to Hedge Fund Research, Inc.’s Global Hedge Fund Industry Report, total global hedge fund capital fell to $2.86 trillion, with investor outflows of $15.1 billion “marking not only the largest quarterly outflow since 2Q09, but also the first consecutive quarters of outflows since 2009.”
Though Goldman is now eyeing private equity firms, the company is still interested in investing in hedge funds.
Currently, Goldman carries a Zacks Rank #3 (Hold). Some better ranked stocks in the finance space include KCG Holdings, Inc. , LPL Financial Holdings Inc. (LPLA - Free Report) and Banc of California, Inc. (BANC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Goldman Eyes Private-Equity Firms; May Launch a New Fund
The Goldman Sachs Group, Inc. (GS - Free Report) is reportedly raising funds to purchase stakes in private-equity firms. The news, first reported by The Wall Street Journal, stated that the company’s asset management wing will initially acquire stakes through its Petershill II fund which raised around $1.5 billion.
Citing people familiar with the matter, the report stated that Goldman seeks to build a diversified portfolio of managers across various sectors and strategies. The New York-based Wall Street giant will focus on both medium and large size private-equity firms. In order to make such investments, Goldman is likely to launch a new fund.
Investors are interested in owning minority stakes in private-equity managers in order to capitalize on the stable cash flow of the firms and steady fees. For fund managers, a big investor brand name are more likely to attract institutional clients.
Notably, Goldman had commenced its fund-building process for Petershill II back in 2013. The fund aimed to acquire 10−20% stake in hedge fund firms, which hold $2−$15 billion in assets under management. Just like the first Petershill fund launched in 2007, the second fund targeted hedge funds with solid cash flows, and a good track record of at least 4−5 years.
Petershill II has managed to acquire stakes in several firms. These include the purchase of 10% stake in Fort Management LP, a $1.6 billion hedge-fund firm in Jan 2016 and a minority interest in Caxton Associates LP, a macro hedge-fund firm in Oct 2014.
However, the hedge funds industry currently does not seem lucrative. The first-quarter 2016 has been disappointing as heightened market volatility resulted in reducing investor risk tolerance that led to withdrawals from underperforming strategies. According to Hedge Fund Research, Inc.’s Global Hedge Fund Industry Report, total global hedge fund capital fell to $2.86 trillion, with investor outflows of $15.1 billion “marking not only the largest quarterly outflow since 2Q09, but also the first consecutive quarters of outflows since 2009.”
Though Goldman is now eyeing private equity firms, the company is still interested in investing in hedge funds.
Currently, Goldman carries a Zacks Rank #3 (Hold). Some better ranked stocks in the finance space include KCG Holdings, Inc. , LPL Financial Holdings Inc. (LPLA - Free Report) and Banc of California, Inc. (BANC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>