Goldman’s West Street fund holds first close

West Street Capital Partners, Goldman Sachs’s seventh buyout fund and its first since 2007, is targeting $5bn and has already made two investments.

Goldman Sachs’s merchant banking division has held a first close and capital call this week for its seventh buyout fund, West Street Capital Partners, Private Equity International has learned.

According to a source familiar with the matter, West Street raised $4.5 billion for the first close held on Wednesday. At the same time, the fund called capital from its investors for the first time for two undisclosed investments that recently closed.

The person said Goldman Sachs expects to hold a final close for West Street in the first half of 2017, and that the bank is so far unsure if the $8 billion hard-cap will be reached. The fund has a $5 billion target.

West Street, which is Goldman Sachs’ first buyout fund since the financial crisis, began marketing in August, the source told PEI.

West Street – also the firm’s address in southern Manhattan – is so named because the post-crisis regulation under the Volcker Rule prohibits banks from including their names in investment funds.

The predecessor fund, Goldman Sachs Capital Partners VI, raised $20.34 billion in 2007, according to PEI data.

Goldman’s merchant banking division is the private investing arm of the bank, and makes both direct investments in companies and commitments to private equity funds. It has previously made commitments to private equity funds such as Hony Capital Fund VIII, which closed above its $2 billion target on $2.7 billion in April; and Lovell Minnick Equity Partners IV, which closed on $750 million in November 2015, according to PEI data. 

The investment arm began making private equity investments in 1986, and added distressed debt in 1990, mezzanine debt in 1996 and senior secured loans in 2008 to its strategy, according to its website. It also focuses on real estate and infrastructure investments.

Last month, as part of the biennial naming of new leadership at the bank, the merchant banking division promoted seven to partner, as reported by PEI.

Goldman Sachs declined to comment.