Goldman PE group runs big single-asset process on healthcare business

Goldman Sachs is running a process on its West Street funds portfolio company Omega Healthcare to extend its hold and deliver liquidity back to LPs, sources told affiliate title Buyouts.

The deal is among a slew of large single-asset processes that are either active, or coming online, as 2024 shapes up to be a busy one for the secondaries market. While demand among GPs for liquidity options to pay back LPs in older funds is strong, the limiting factor is the relatively small pool of capital available for such deals. Secondaries fundraising has remained strong, but still pales in comparison to the inventory of potential deals in the market, sources have said.

Goldman is working with Evercore as well as its investment banking division as advisers on the process, sources said. The potential size of the deal is more than $1 billion, they said. A Goldman spokesperson did not respond to a comment request about the deal.

The deal would move healthcare management services company Omega out of Goldman’s West Street Capital Fund VII, which closed on about $7 billion in 2017, and into a continuation fund. Fund VII LPs have the ability to cash out of their stake in the business, or roll their interests into the continuation pool.

It’s not clear if there is a buyer lined up for the deal yet. The process launched in the second half of last year, one of the sources said.

Omega Healthcare in 2022 added-on ApexonHealth, Vasta Global and Reventics.

While Goldman is not known for selling on the secondaries market, it has both secondaries advisory and lead investor programs. Goldman Sachs’ secondaries buyer group, led by Harold Hope, has been one of the busier investors in the industry.

Last year, the firm raised more than $15 billion across its ninth flagship secondaries fund and its debut infrastructure secondaries fund. It was an investor, along with AlpInvest Partners, in a four-asset continuation fund deal from Leonard Green that raised about $2.2 billion, Secondaries Investor and Buyouts previously reported.

Single-asset continuation funds represented about 39 percent of total GP-led activity, which was around 44 percent of total market volume in 2023, according to Lazard’s full year volume survey.

Pricing fell last year compared with 2022, though around 70 percent of GP-led deals were priced at or above 90 percent of net asset value, the survey said.