Goldman Sachs Seeks to Optimize Petershill Partners Business by Floating and Collecting AUM Fees

Posted on 09/06/2021

Since the financial crisis and the advent of excessive quantitative easing by central banks, the private markets have exploded, driven by institutions such as sovereign funds and pensions and family offices seeking attractive long-term returns as well as portfolio diversification. Goldman Sachs Group, Inc. seeks to float the assets of its Petershill Partners unit. This unit acquires minority stakes in alternative assets managers including private equity, venture capital and hedge funds. Petershill Partners would be a separate company that would be operated by the Goldman Sachs Asset Management (GSAM) team. GSAM would earn an operating fee for running Petershill, while profits would trickle down to its shareholders.

The unit will be listed in London as the main Petershill team is based out of the city. With no significant fixed assets, Petershill Partners holds positions in 19 alternative asset managers with combined assets under management of US$ 187 billion. The official name of the listed unit will be Petershill Partners. Petershill Partners generated distributable earnings of US$ 310 million for the 12 months ending June 30, 2021 and has appointed Standard Chartered Plc Deputy Chairman Naguib Kheraj as its chair.

Petershill Partners is estimated to be valued at more than US$ 5 billion and the deal will comprise of a sale of around US$ 750 million of new shares as well as existing ones to give Petershill a free float of at least 25%. The free float measure is important for the company to be included in FTSE indices.

The Petershill series of funds made a number of noteworthy deals.

2008: Acquired a 9.99% interest in Claren Road Asset Management, LLC
2010: Goldman Sachs sold its 9.99 interest in Claren Road Asset Management, LLC in 2010 to Carlyle Group for US$ 55 million
January 2016: Bought a 9.99% interest in FORT L.P. (Goldman Sachs Petershill Fund II)
May 2018: Investment in Clearlake Capital Group, L.P.
July 2018: Made an investment in Francisco Partners
January 2020: Made an investment in Kayne Anderson Real Estate
February 2021: Made an investment in Arlington Capital Partners

Other investments include: Accel-KKR, Riverstone Holdings LLC, Caxton Associates LP and LMR Partners LP

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