Goldman Said to Raise $1.3 Billion to Buy Hedge Fund Stakes

Goldman Sachs Group Inc. has raised $1.3 billion for its second Petershill fund that buys stakes in hedge fund firms, beating its initial target, according to a person with knowledge of the matter.

The bank started raising money for Petershill II in 2013, initially aiming to raise $1 billion, said the person, who asked not to be identified because the information is private. Joseph Stein, a spokesman for Goldman Sachs in London, declined to comment on the fundraising.

Goldman will close the fundraising at about $1.4 billion, two people with knowledge of the matter said.

Petershill II will buy 10 percent to 20 percent equity stakes in hedge fund firms with assets of $2 billion to $15 billion, Goldman Sachs said last year. It has so far purchased interests in New York-based credit manager Knighthead Capital Management LLC, macro hedge fund Caxton Associates LP and London-based Pelham Capital Management LLP, a long-short equity firm. 

Goldman Sachs’s first Petershill fund, for which the bank raised $1 billion in 2007, has invested in nine firms including Winton Capital Management LLC and Capula Investment Management LLP, both based in London.

The funds compete with the likes of Dyal Capital Partners and Blackstone Group LP to buy stakes in hedge-fund firms, which sell because a big-name investor can help them win institutional clients. 

Hedge funds typically charge fees of 2 percent of assets under management and take a 20 percent cut of profits, making them an attractive bet for those buying stakes.

Earlier this month, Michael Platt’s BlueCrest Capital Management said it was selling most of its stake in a computer-trading hedge fund run by former employee Leda Braga to Affiliated Managers Group Inc.

KKR & Co. agreed to buy a 25 percent stake in London-based hedge fund Marshall Wace in September, adding to the private equity firm’s ownership of outside money managers.

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