Goldman earnings boosted by PE gains

Corporate performance and exits for private equity investments helped grow the bank's third quarter equity revenue more than 50% year-on-year.

Goldman Sachs‘s revenue from equities rose by more than half year-on-year in the third quarter amid net gains from private equity investments.

“Corporate performance and company-specific events” positively impacted income generated by the asset class, the New York-headquartered investment bank noted on Tuesday in its earnings announcement for the three months ended 30 September.

Overall net revenues from equity securities, which include private equity, were $1.4 billion, a 51 percent increase compared with the same period last year. The announcement did not give a breakdown for private equity.

In an earnings call on Tuesday Goldman’s chief financial officer Marty Chavez said that of the $1.4 billion, around 60 percent was driven by public mark-to-markets and events such as sales.

“Given the favorable market backdrop, we’ve been actively harvesting our portfolio,” he said.

Goldman Sachs Asset Management, the unit of the bank that houses its private equity team, has invested in private equity through strategies including buyout, funds of funds, mezzanine, secondaries, distressed and venture capital on a global basis, according to PEI data.

Its latest secondaries fund, Vintage VII, has raised just over $7 billion and is yet to hold its official final close. The bank is also raising West Street Capital Partners VII, according to a document from Minnesota State Board of Investment, which committed $150 million. The fund focuses on buyout and distressed strategies.

A spokesman for Goldman declined to comment on fundraising.