Goldman Sachs has raised more than $1 billion to invest in fast-growing private companies.
The Global Private Opportunities Partners II fund is three times the size of a similar fund Goldman raised in 2011 to pursue unlisted companies, reports the Financial Times. Clients of Goldman’s wealth management division, in which a minimum account is $10 million and the average is $40 million, and firm partners can invest in the fund. The fund, run by co-heads of Goldman’s Investment Strategies management team Raanan Agus and Kenneth Eberts, has a 1.5% management fee and 20% performance fee.
The private fundraising space has changed in recent years. In 2000, the average tech company went public at age five, but in 2014 the average was 11-years-old, Goldman says. Companies are playing cautious, looking to raise hundreds of millions of dollars privately and hit high valuations before looking at an IPO. Venture capital funds aren’t the only players in the field any more either. Hedge funds, mutual funds, family offices, and private investors all want a piece of private companies in hopes of rapid price appreciation.
Goldman’s similar 2011 fund raised $344 million, and participating in private funding for Facebook, Uber, and Indian Internet provider Tikona. It had an internal rate of return of 8.3% at the end of 2014.
Photo: wikipedia.com.