Report: Goldman Sachs to raise $7bn PE fund

Bucking the trend of investment banks scaling back their principal investment activities, Goldman Sachs is reportedly preparing to raise a new mega-fund.

Global investment bank Goldman Sachs is planning to raise a $7 billion (€5.4 billion) global private equity fund according to a report in the Financial Times.

The report cites people “familiar with the situation”. Goldman Sachs declined to make any comment on the report this morning.

Such a fund would rival the multi-billion-dollar fundraisings currently being conducted by a number of private equity firms. US funds Blackstone Group, KKR and Warburg Pincus are all expected to raise significant funds this year, while in Europe, Apax Partners, BC Partners and CVC Capital are also looking to close large-scale vehicles.

Goldman’s reported move comes at a time when other investment banks are downplaying their interest and involvement in the asset class. In December, Credit Suisse First Boston announced plans to spin out DLJ Merchant Banking, its late-stage private equity investment arm operating in North America and Europe.

CSFB said the reasons for spinning off the buyout operation included a desire to take out potential conflicts of interest with other parts of its investment banking franchise and to avoid competition with CSFB’s financial sponsor clients.

Earlier in the year, a number of CSFB professionals left DLJ to set up their own private equity vehicle, citing frustration at conflicts of interest that arose between the investment banking and private equity sides. In a Wall Street Journal article, the leavers said they were pressured not to compete for deals against other private equity firms who were clients of CSFB.

Diamond Castle Holdings, the spinout vehicle, is headed by Lawrence Schloss and plans to raise a fund of between $1 billion and $1.5 billion (€810 million and €1.22 billion).