Goldman Sachs Capital Partners is the

private equity In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...

arm of Goldman Sachs, focused on

leveraged buyout A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money ( leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loa ...

and growth capital investments globally. The group, which is based in

New York City New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the Un ...

, was founded in 1986. As of 2019, GS Capital Partners had raised approximately $39.9 billion since inception across seven funds and has invested over $17 billion.

History

Goldman Sachs has historically invested capital in a variety of businesses alongside its investment banking clients. In the early and mid-1980s, Goldman was a slow entrant into the financing of

s and

junk bond In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events ...

s and preferred to focus on its traditional

mergers and acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...

advisory business. Beginning in 1983, however, Goldman began making longer-term equity investments in private equity transactions that came through its investment banking and other clients. Goldman Sachs Capital Partners was founded in 1986, at the same time that similar groups were founded at other investment banks including Lehman Brothers Merchant Banking, Morgan Stanley Capital Partners and DLJ Merchant Banking Partners. Goldman established investment partnerships that allowed its clients to participate alongside the firm in private equity transactions. On April 23, 2007, Goldman closed GS Capital Partners VI with $20 billion in committed capital, $11 billion from

institutional Institutions are humanly devised structures of rules and norms that shape and constrain individual behavior. All definitions of institutions generally entail that there is a level of persistence and continuity. Laws, rules, social conventions a ...

and high-net-worth investors and $9 billion from Goldman Sachs and its employees. In late 2019, Goldman's Chief Executive, David M. Solomon, announced that the firm would combine GS Capital Partners into one division with Goldman's other direct-investing units, such as the Special Situations Group and Growth Equity unit, called the Merchant Banking Division (MBD), which added up to $140 billion under management.

Investment funds

Since 1992, GSCP has raised third party capital as well as investing on behalf of Goldman, its clients and its employees through institutional private equity funds. GSCP's third party investors include pension funds,

insurance companies Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

, endowments,

fund of funds A "fund of funds" (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A ...

, high-net-worth individuals,

sovereign wealth fund A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as ...

s and other

institutional investors An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linke ...

. As of the end of 2008, GSCP had completed fundraising for seven investment funds with total committed capital of approximately US$39.9 billion: Source:

Preqin Preqin is a privately held London-based investment data company that provides financial data and insight on the alternative assets market, as well as tools to support investment in alternatives. By the company's own definition, its data encompa ...

Investments

GS Capital Partners emerged in the late 1990s as one of the largest private equity investors globally competing and partnering with the largest independent firms,

Kohlberg Kravis Roberts KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strate ...

Blackstone Group Blackstone Inc. is an American alternative investment management company based in New York City. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate bu ...

Bain Capital Bain Capital is an American private investment firm based in Boston. It specializes in private equity, venture capital, credit, public equity, impact investing, life sciences, and real estate. Bain Capital invests across a range of industry se ...

Carlyle Group The Carlyle Group is a multinational private equity, alternative asset management and financial services corporation based in the United States with $376 billion of assets under management. It specializes in private equity, real assets, and ...

and

TPG Capital TPG Inc., previously known as Texas Pacific Group and TPG Capital, is an American investment company based in Fort Worth, Texas. The private equity firm is focused on leveraged buyouts and growth capital. TPG manages investment funds in growth c ...

. Since the raising of its Goldman Sachs Capital Partners 2000 Fund, GS Capital Partners has completed some of the most notable

s: In addition to its successful buyout transactions, Goldman was involved in the high-profile failed buyout of

Harman International Industries Harman International Industries, commonly known as Harman (stylized in all-uppercase as HARMAN), is an American audio electronics company. Since 2017, the company has been an independent subsidiary of Samsung Electronics. Headquartered in Stam ...

, an upscale audio equipment maker. On April 26, 2007, Harman announced it had entered an agreement to be acquired by GS Capital Partners and

.Harman International press release
As the financing markets became more adverse in the summer of 2007, the buyout was on tenuous ground. In September 2007, Goldman and KKR backed out of the $8 billion buyout of Harman. By the end of the day, Harman's shares had plummeted by more than 24% on the news.

References

External links

Goldman Sachs Capital Partners
(company website) {{Private equity and venture capital Goldman Sachs Investment banking private equity groups Mezzanine capital investment firms Private equity firms of the United States Financial services companies based in New York City American companies established in 1986 Financial services companies established in 1986 1986 establishments in New York (state)