Goldman Sachs closes record mezzanine fund

The US investment bank has closed its GS Mezzanine Partners III fund on $2.7bn, making it the largest mezzanine fund ever raised.

( US investment bank Goldman Sachs has closed its third mezzanine fund on $2.7bn. GS Mezzanine Partners III was technically closed this June, according to a press release, and more than doubles the $1.3bn raised in 2000 for GS Mezzanine Partners II.


The fund has institutional investors, high-net-worth investors as well as capital from Goldman Sachs. The fund took approximately seven months to raise, a person familiar with the fund raising said.


The newly closed fund will target investments in North America and Europe in the $40m to $200m range. GS Mezzanine Partners II is approximately 90 per cent invested and has made 20 commitments.


“We take a partnership approach to mezzanine investing and we work hard to build long-term relationships with preeminent equity sponsors, management teams and placement agents,” Muneer Satter, managing director and head of the mezzanine group for Goldman Sachs, said in the statement. “The size of GS Mezzanine Partners III will enable us to take a more active role in larger transactions that are prevalent in today’s market environment.”


Both GS Mezzanine Partners and GS Capital Partners are run out of Goldman Sachs’ principal investment area, which is led by Richard Friedman. Last week, GS Capital Partners was part of a $4.2bn acquisition of water treatment company Ondeo Nalco from French-Belgian energy conglomerate Suez in a deal led by The Blackstone Group that also included Apollo Management. In April, the firm made a “significant investment” in a first round of funding for aircraft designer and manufacturer Adam Aircraft Industries.


GS Capital Partners is the private equity arm of financial services institution Goldman Sachs. The firm’s latest fund was formed in July 2000 with total capital of $5.25bn with $1.5bn coming from Goldman Sachs and its employees.