Goldman Sachs Closes $9.7B Fund, Largest Since 2007

Facts

• On Tuesday, Goldman Sachs Group Inc. said it raised $9.7B in commitments for its new private equity (PE) fund West Street Capital Partners VIII, surpassing the $7B raised in 2017 for fund VII and its largest buyout fund since 2007.
• Sitting under the Wall Street giant's $2.5T asset management arm, the fund seeks to invest in companies valued at between $750M and $2B. It also plans on investing an average of $300M in companies in the financial, healthcare, consumer, technology, and climate change transition sectors.
• Investors in Goldman's latest closed-fund venture include pension funds, sovereign wealth funds, financial institutions, family offices, and high net-worth individuals, as well as Goldman itself and some of its employees.
• So far, the fund's biggest investments have included Norgine, a European pharmaceutical company; Nippo Corp, a Japanese road pavement company; and Parexel, a clinical research organization.
• While other major banks ended their PE practices after financial crises, Goldman has kept its business in-house and now ranks as one of the largest PE investors on Wall Street.
• However, Goldman isn't the only money manager raising PE funds; investment management company BlackRock Inc. currently has about $35B focused on PE investments, having raised $3B last year alone.

Sources: Market Watch, Reuters, One America, and Yahoo.

Narratives

• Pro-establishment narrative, as provided by The Wall Street Journal. A positive, albeit novel, aspect of these PE funds is their ability to save family-owned businesses when aging owners can no longer run the show. Though it doesn't always work out, firms like Goldman often have the financial capability to retain a company's success or even boost its profitability.
• Establishment-critical narrative, as provided by AMA. PE funds are terrible for many small businesses, but none more so than the healthcare industry. Time and time again we've seen PE firms snatch up local hospitals, treat them solely as a five-to-seven-year investment, and then the intimate, affordable experience a doctor's visit should be all of a sudden vanishes.