Goldman Sachs Targets Asia's Fast-Growing Economies With New $2B Private Equity Fund: Report

Author: Shivani Kumaresan | July 15, 2024 11:31am

Goldman Sachs Group Inc (NYSE:GS) is reportedly set to launch its first Asia Pacific-focused private equity fund, aiming to raise $2 billion, reflecting the bank’s strategy to deepen its exposure to some of the fastest-growing economies in the region.

The fundraising effort comes amid changing investment strategies and allocations by private equity firms in Asia due to geopolitical tensions, higher interest rates, and market volatility, reported Reuters.

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Goldman Sachs Asset Management, the investment arm of the bank, has been marketing this new fund to sovereign wealth funds, pension funds, and private investors. The target for the first close is set for the fourth quarter of 2024.

The fund will primarily focus on opportunities in Japan, with about half of its capital expected to be allocated there. Additionally, India, South Korea, and Australia will be key markets for investment, per the report.

Private equity fundraising in Asia increased by 4% in the first half of 2024, reaching $52.7 billion. However, this figure is significantly lower than the first-half average over the past decade.

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Global investors have shown caution in deploying capital in China due to economic slowdown and regulatory issues.

Japan has become an attractive destination for private equity firms, driven by a weak yen, a buoyant public market, and policy initiatives aimed at improving corporate governance.

Goldman Sachs has a long history in private equity, managing over $90 billion in assets globally. Since 2019, under CEO David Solomon, the bank has shifted towards raising external capital for investments to boost earnings from fees, rather than relying on its own balance sheet.

Price Action: GS shares are trading higher by 1.46% at $486.89 at last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo Courtesy: Sergei Elagin On Shutterstock.com

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