The portfolio of alternative fund managers intends to capitalize on the boom in the private financial market.
Goldman Sachs is getting ready to list a new investment vehicle, Petershill Partners, on the London Equity Exchange in a move that could estimate the unit at £3.6bn due to a boom in the private stock market.
Petershill Partners is predicted to raise nearly $750M (£542M) through an initial public offering (IPO) that will offer institutional investors such as pension funds. It also wants to enjoy some profits from the returns of private equity firms and hedge funds without needing to invest in these companies immediately.
The vehicle holds few stakes in 19 alternative fund managers – including hedge funds, private equity, and venture capital firms – with joint assets under management of $187 billion, and is supposed to be valued at $5 billion (£3.6bn) after the IPO, according to references with the know-how of the matter. Goldman Sachs is yet to comment on the estimation.
It follows Bridgepoint – the private equity group behind the restaurant group Itsu, online cycling specialist Wiggle, and the UK branch of Burger King – disclosing its plans for a £2bn IPO on the London Stock Exchange in June.
Petershill Partners will consist of assets that have been overseen by Goldman Sachs Asset Management since 2007. The listing will involve its existing institutional investors selling down 25% of their stakes in the firm. The shares will be up for sale on the public market. Goldman is not selling any shares as part of the IPO but will continue to manage the portfolio on investors’ behalf.
The director of Petershill Partners, Naguib Kheraj, said:
“Through a London category, Petershill Partners would make accessible to general market corporate investors a rare chance to access stakes in several principals independently owned alternative asset managers.”
The choice to sell the portfolio comes during an upturn in demand for private equity investments, as shareholders search for stronger financial profits despite low lending rates.
This boom has been propelled partly by those same low-interest rates – which have made it affordable for private equity companies to borrow money to sustain their acquisitions – as well as cheaper-than-usual prices for firms.
British firms, for example, have become highly attractive targets in recent months, since their worth has been struck by both the pandemic and Brexit. There were 785 private equity offers in the UK alone in the first half of 2021 worth a combined £74bn, according to KPMG.
The private stock exchange market will continue to flourish, according to data firm Prequin, which expects funds under management over the so-called alternatives business to grow in value by 9.8% by 2025 to reach $17.5tn from the $10.7tn recorded in 2021.