Goldman Sachs Opens Up In-House Money-Maker to Outside Investors
Bank plans to raise outside money for its special-situations group
A Goldman Sachs GS +0.33% Group Inc. profit machine that has invested the bank’s own money in Asian property, African startups and troubled U.S. retailers, among other ventures, is opening up to outside investors.
Goldman plans to raise outside money for its special-situations group, according to people familiar with the matter. Also under discussion is a broader reorganization of the firm’s various private investing activities into a new unit that would seek to raise new funds across a variety of strategies, the people said.
The special-situations group has been run since 2013 by Julian Salisbury, a detail-oriented Brit who joined the firm’s management committee two year ago. It has grown from about $20 billion on the eve of the crisis to about $30 billion today, people familiar with the matter said.
In the early 2000s it pioneered the sort of go-anywhere investing that has caught on at private-equity firms such as TPG and Blackstone Group LP, and it remains one of the most profitable businesses at Goldman.
It will likely be combined with Goldman’s merchant-banking group, the historical home of the bank’s private-equity investing.
“Based on our track record, there is an opportunity to raise additional third-party funds across equity, credit and real estate,” Goldman Chief Executive David Solomon told analysts earlier this year. “We have a world-class alternative investing franchise, which has generated strong returns over three decades [and] presents us with extraordinary opportunities to partner with clients to invest their capital alongside our own.”
In a memo to employees last week entitled “Our Forward Strategy,” Mr. Solomon said growing the bank’s alternative asset-management business is a priority.