Goldman joins private equity's upper echelon

Goldman Sachs Group Inc. is expected to bring in as much as 19 billion dollars for its newest private-equity fund, the largest amount raised in this arena by a Wall Street firm, The Wall Street Journal reported on Friday.

The fund, Goldman Sachs Capital Partners VI, puts Goldman in the same league as private-equity heavyweights Blackstone Group and Kohlberg Kravis Roberts & Co., which are expected to soon close funds totaling about 20 billion dollars each, their biggest efforts yet, said the report.

That figure also vaults Goldman ahead of funds such as Texas Pacific Group at 15 billion dollars or Bain Capital at 10 billion dollars and is more than double Goldman's current 8.5 billion dollar fund, which was raised in 2005 and is its largest fund to date.

The private-equity drive by Goldman Sachs Group, under Chief Executive Lloyd Blankfein, reflects the tenor of the times on Wall Street. Securities firms led by Goldman Sachs have increasingly used their own capital to trade and invest, according to the report.

These sources of profit involve both more returns and more risk than their traditional advisory role.

Private-equity firms use money raised from pension funds and other big investors to buy companies owned by public shareholders, hoping to cash out at a profit through a stock offering or outright sale.

Source: Xinhua