Goldman seeks $5bn for Vintage VII – exclusive

The investment bank also raised over half a billion dollars for a dedicated real estate secondaries fund last year, according to documents seen by Secondaries Investor.

Goldman Sachs Asset Management is back in market with its latest dedicated secondaries fund seeking $5 billion, Secondaries Investor has learned.

The bank’s Alternative Investments & Manager Selection (AIMS) unit launched Vintage VII in May, according to an investment document seen by Secondaries Investor. The fund will focus on acquiring mature private investment portfolios across a wide range of deal types.

It is understood that Vintage VII, which is targeting the same size as its predecessor, will focus on buyout and distressed strategies in developed markets.

“Disruptive forces such as active management, regulatory change, and fatigued or stressed investors [are] driving increased secondary market volume,” the document notes. With over $4 trillion raised in the private equity market since 2005, there are favourable supply and demand dynamics for buyers of illiquid interests, according to the document.

Vintage VII has a four-year investment period and a $1 million minimum commitment. It charges a 0.7 percent average annual fee over the fund’s life and a 10 percent carried interest of profits after return of contributed capital, fees and expenses, and an 8 percent preferred return.

The fund can invest opportunistically from traditional LP secondaries to more innovative and complex deals, according to the document. The hard-cap was unclear..

The documents also show the investment bank is focusing on real estate secondaries, amassing $568 million for a 2015 fund named Vintage Real Estate Secondary Strategy. The firm has undertaken two deals through this 2015-vintage fund and also made a “tactical tilt” to real estate through its Vintage VI fund due to an imbalance in supply and demand and recovering real estate fundamentals, the document notes.

Goldman’s AIMS unit evaluated about $21 billion of secondaries opportunities in the first quarter of 2016, the second-highest quarterly volume in its history.

The performance of the firm’s previous funds were also revealed in the document, including Vintage VI, which raised $5.8 billion in 2012 including separate accounts and parallel vehicles. Vintage VI had completed 57 deals as of February and had a 15.5 percent net internal rate of return with a 1.2x net cash on cash return on investment, as of 31 December.

Investors in Vintage VI include Surrey County Pension Fund, Utah State University and West Yorkshire Pension Fund, according to PEI Research & Analytics.

Goldman Sachs declined to comment.