Alternative Investments: Goldman Sachs To List Petershill Partners, Its Alternative Investing Vehicle
Petershill Partners holds minority stakes in alternative investment firms such as private equity managers, venture capital, hedge funds, and other alternative asset management firms.
Petershill Partners PLC announced this week it was considering a US$750 million initial public offering on the Main Market of the London Stock Exchange of its ordinary shares. It said it would utilize the proceeds for expenses and to acquire further alternative asset manager stakes. (HedgeWeek)
Petershill Partners is a private equity unit of Goldman Sachs (NYSE: GS). The proposed IPO, which likely intends to take advantage of the private equity boom, would value Petershill at more than $5 billion.
Investors have been drawn to alternative investments such as private equity and hedge funds amidst record low interest rates and soaring, but risky equity markets. Petershill Partners today comprises minority investments in 19 high-quality independent alternative asset managers, previously held in private funds managed by Goldman Sachs Asset Management (GSAM). These top-performing multi-billion dollar asset managers are focused on the fastest-growing parts of the Alternatives industry and are generating strong risk-adjusted returns for their clients.
The asset managers have US$187 billion of aggregated assets under management. According to the filing, Petershill would address a universe of private market firms that the Company estimates is worth approximately US$1.2 trillion – and expected to grow in line with the alternatives industry at an estimated 10% CAGR between 2020 and 2025.
Meanwhile, according to the filing, Petershill delivered an organic 21% CAGR in Aggregate FP AuM over 2018-2020.
GSAM team to run the show
Though Petershill would be a fully independent and standalone company, it would be run by the GSAM team which was founded in 2007 as the first minority stake acquirer in alternative asset managers.
Robert Hamilton Kelly, Co-head of the Petershill group within Goldman Sachs said:
“Petershill Partners would provide shareholders with access to the growth and profitability of the Alternatives industry in a new and differentiated way, allowing them to benefit from the economics of a highly cash generative company that benefits from stable, long-term fee-related earnings delivered by high-performing firms, based on long-dated assets. We believe our long track record of creating win-win partnerships and the extremely high barriers to entry in this industry position us well to continue to deliver growth and generate attractive returns for all stakeholders.”
Naguib Kheraj, Non-executive Chair of Petershill Partners, said:
“Through a London listing, Petershill Partners would make available to public market institutional investors a unique opportunity to access stakes in a number of leading privately owned alternative asset managers. Goldman Sachs has been a pioneer and is a global leader in the specialised business of making minority investments in alternative asset managers. Through Petershill Partners, investors would benefit from the expertise of Goldman Sachs as its operator both in terms of managing the existing portfolio and developing opportunities to make additional future investments in this rapidly growing industry.”
British private equity firm Bridgepoint Group Plc (LON: BPT) enjoyed a highly successful IPO, raising nearly $1.25 billion in July.
In a testament to the boom conditions in PE, Bridgepoint shares are now quoting about 40% higher than their IPO price.
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