Goldman, Sachs & Co.'s private equity affiliate has closed yet another megafund, but this one comes with a twist: The firm will use the new
$10 billion fund to buy leveraged debt instead of acquiring companies.
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The Financial Times reports that the fund will
invest in loans backing leveraged buyouts, taking advantage of a gap in the financing markets created by the credit crisis. The fund will buy senior loans, so-called because they are paid off before other debts. It comes in addition to an existing $20 billion Goldman fund that invests in 'mezzanine' debts, which are paid after the senior debt.
GS Capital Partners, the bank's PE affiliate, will manage the fund. With $30 billion already under management, Goldman won't be as reliant on the CLO market, which has come to a virtual standstill due to the credit crunch. The bank will now be able to provide a significant amount of financing on its own without having to find outside buyers of debt for LBO deals. - George White
See story from the Financial Times
