Goldman Sachs raises $15.2 billion for 2 new secondaries funds

The firm’s Vintage IX fund — the ninth and most recent in a series of private equity strategies dating back to 1998 — received $14.2 billion in equity commitments from a global group of institutional, high-net-worth investors and Goldman Sachs employees.

Harold Hope, a managing director and global head of secondaries at the firm, said institutional investors in the fund were a “well-diversified, global mix that includes pension plans, as well as insurers, sovereign wealth funds, financial institutions, healthcare plans, endowments and foundations, and family offices.”

Hope didn’t name any individual institutional investors.

The last iteration of the fund, Vintage VIII, raised $10.3 billion in 2020.

Part of the reason for growing interest could be because uncertainty in the markets — and overallocation issues on the part of pension funds — have created a secondaries market that heavily favors buyers.

Hope added that the issues with overallocation present an enormous opportunity for the secondaries market.

“While the COVID disruption impacted market dynamics during the deployment of our last fund, the market now is facing a different challenge around overallocation among investors. Investors have ramped up commitment pacing in the last several years, portfolios have faced the denominator effect amidst periods of market volatility, and the environment for private equity exits and distributions has slowed — all factors driving overallocation,” he said. “As a result, the opportunity set for secondaries has never been larger, but buyers must continue to navigate a more uncertain landscape and a wide bid/ask spread.”

Additionally, the firm raised about $1 billion in equity commitments for another new fund, Vintage Infrastructure Partners.

Through the existing Vintage platform, Goldman Sachs’ asset management division has been investing in infrastructure secondaries for 15 years, but business has picked up in recent years. The firm’s sourcing of infrastructure secondaries grew by more than 40% between 2021 and 2022, and saw a record half-year total this year, according to the news release.

“What is exciting is the growth and breadth of the infrastructure market, and how that is driving more demand for liquidity,” Hope said. “We think being one of the few dedicated specialists in the space is an attractive place to be. This also allows us to better position ourselves as a solutions provider to investors across the entire range of their private markets exposure.”

This uptick in interest is in line with overall trends in the infrastructure secondaries market, with firms such as Ares Management launching new funds this year.

Across all of its Vintage funds, which are a flagship product in the firm’s alternatives division, Goldman Sachs Asset Management had $45 billion in assets under management as of June 30.