Goldman Sachs Alternatives is the

alternative investment An alternative investment, also known as an alternative asset or alternative investment fund (AIF), is an investment in any Asset classes, asset class excluding capital stocks, Bond (finance), bonds, and cash. The term is a relatively loose ...

arm of

Goldman Sachs The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...

, focused on

private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...

, private credit, secondaries, real estate,

infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and pri ...

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

New York City New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

, was founded in 1986.

History

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

leveraged buyout A leveraged buyout (LBO) is the acquisition of a company using a significant proportion of borrowed money (Leverage (finance), leverage) to fund the acquisition with the remainder of the purchase price funded with private equity. The assets of t ...

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 eve ...

s and preferred to focus on its traditional

mergers and acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...

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 aPriori Capital Partners is a private equity investment firm focused on leveraged buyout transactions. The firm was founded as an affiliate of Credit Suisse and traces its roots to Donaldson, Lufkin & Jenrette, the investment bank acquired by Cr ...

. 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 An institution is a humanly devised structure of rules and norms that shape and constrain social behavior. All definitions of institutions generally entail that there is a level of persistence and continuity. Laws, rules, social conventions and ...

and high-net-worth investors and $9 billion from

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 fund A pension fund, also known as a superannuation fund in some countries, is any program, fund, or scheme which provides pension, retirement income. The U.S. Government's Social Security Trust Fund, which oversees $2.57 trillion in assets, is the ...

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 protect ...

, 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 f ...

high-net-worth individual In the financial services industry, a high-net-worth individual (HNWI) is a person who maintains liquid assets at or above a certain threshold. Typically the criterion is that the person's financial assets (excluding their primary residence) are ...

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

s and other

institutional investors An institutional investor is an entity that pools money to purchase security (finance), securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, s ...

. As of the end of 2008, GSCP had completed fundraising for seven investment funds with total committed capital of approximately

US$ The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, currency code: USD) is the official currency of the United States and International use of the U.S. dollar, several other countries. The Coinage Act of 1792 introdu ...

39.9 billion:

Investments

Goldman Sachs Alternatives 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 private-equity and investment company. , the firm had completed private-equity investments in portfolio companies with approximately $710 billion of total ...

Blackstone Group Blackstone Inc. is an American alternative investment management company based in New York City. It was founded in 1985 as a mergers and acquisitions firm by Peter Peterson and Stephen Schwarzman, who had previously worked together at Lehman ...

Bain Capital Bain Capital, LP is an American Investment company, private investment firm based in Boston, Massachusetts, Boston, Massachusetts, with around $185 billion of assets under management. It specializes in private equity, venture capital, credit, p ...

Carlyle Group The Carlyle Group Inc. is an American multinational company with operations in private equity, alternative asset management and financial services. As of 2023, the company had $426 billion of assets under management. Carlyle specializes in ...

and

TPG Capital TPG Inc., previously known as Texas Pacific Group and TPG Capital, is an American private equity firm based in Fort Worth, Texas. TPG manages investment funds in growth capital, venture capital, public equity, and debt investments. The firm in ...

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

s: In addition to its successful buyout transactions, Goldman Sachs was involved in the high-profile failed buyout of Harman International Industries , an upscale audio equipment maker. On April 26, 2007, Harman announced it had entered an agreement to be acquired by Goldman Sachs Alternatives 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 Sachs 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

* {{Private equity and venture capital Goldman Sachs 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)