Goldman Sachs launches $5.5 billion private equity fund

Goldman Sachs Group Inc. today said it raised its fifth dedicated private equity fund, GS Vintage Fund V, with about $5.5 billion in capital commitments.

The news from Goldman confirms a report in The Wall Street Journal from Friday that the investment bank was nearing completion of raising new capital through a stock offer as part of a plan to repay government funds.

Last fall, Goldman received $10 billion in government funds as part of the Treasury Department's program aimed at reviving the credit markets. Goldman executives in recent weeks have said they would like to repay the government loan in the near future. (See: Goldman Sachs plans rights issue to repay $10-billion Treasury loan)

The fund will focus primarily on acquiring portfolios of private equity assets, Goldman said. Limited partners in the fund include existing and new institutional and private investors throughout the Americas, Europe, Asia and Australia.

Goldman Sachs Asset Management oversaw $779 billion of assets as of November 2008. The parent is scheduled on Tuesday to report results for December 2008 and the first quarter of 2009.

Goldman's move may be an indication of some revival in this sector. About 9 percent of private-equity fund holders may sell their investments on the secondary market during the next two years, according to a survey released last month by Preqin, a London-based research firm. Private-equity assets worldwide total about $2.5 trillion, Preqin said.

The Goldman Sachs fund is the largest of its type, the Financial Times reported yesterday. JPMorgan Chase & Co., the second-biggest US bank by assets, is also raising a secondary fund that's pulled in about $500 million in the past few months, according to the report.