By Laura Kreutzer
Goldman Sachs Group Inc. (GS) has collected at least $1.2 billion for its newest fund focused on the purchase of private equity interests on the secondary market, according to filings with the Securities and Exchange Commission.
The firm told prospective investors that it would seek $4 billion to $5 billion for the fund, which is roughly in the line with the $5.5 billion that it raised for its prior secondary fund back in 2009. As of April, Goldman Sachs had yet to set a hard cap for the new fund, Dow Jones reported at the time.
Goldman's secondary team invests both in fund portfolios as well as structured secondary transactions, including ones supporting a spinout of a general partner. In 2008, for example, the firm backed the spin out of midmarket European buyout firm AAC Capital Partners from ABN Amro Bank NV (ABNBK.YY).
At press time, a spokesman for Goldman Sachs could not immediately be reached for comment.
Investor interest in secondary funds has surged so far this year, outpacing the first half of 2011, according to Dow Jones LP Source, thanks in large part to the success of a small handful of large firms. AXA Private Equity recently rounded up a total of $7.1 billion for secondary investments, while earlier this year, CS Strategic Partners, the secondary arm of Credit Suisse Group AG (CS, CSGN.VX) closed its latest secondary funds with $2.9 billion in capital.
Trading of private equity interests on the secondary market hit a record $25 billion in 2011, according to secondary firm Lexington Partners. Many investors expect to see transaction volume match, if not exceed, those levels this year, as financial institutions seek to reduce their exposure to riskier, illiquid assets and pension systems continue to offload assets to focus on a core group of private equity relationships.
The State of Wisconsin Investment Board, California Public Employees Retirement System and New York City Retirement System are only a few large pension systems that are in the midst of selling large private equity portfolios.
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