Goldman Sachs to Launch $2 Billion Private Equity Fund in Asia Pacific

Investment bank Goldman Sachs Group Inc is gearing up to launch its inaugural private equity fund targeting the Asia Pacific region, with the goal of raising $2 billion. This move underscores the bank’s strategic focus on deepening its presence in the rapidly growing economies of Asia. The fundraising initiative reflects a broader trend among private equity firms in the region adjusting their investment strategies amidst geopolitical tensions, rising interest rates, and market volatility, as reported by Reuters.

Goldman Sachs Asset Management, the bank’s investment arm, has been actively promoting the new fund to sovereign wealth funds, pension funds, and private investors. The fund’s first close is slated for the fourth quarter of 2024, with a key emphasis on opportunities in Japan. Approximately half of the fund’s capital is expected to be allocated to the Japanese market, while India, South Korea, and Australia are identified as significant markets for potential investment, according to the report.

Private equity fundraising in Asia witnessed a modest 4% uptick in the first half of 2024, reaching $52.7 billion. However, this figure remains notably lower than the average for the first half of the year over the past decade. Notably, global investors have displayed caution in allocating capital in China due to economic deceleration and regulatory uncertainties. Consequently, Japan has emerged as an enticing destination for private equity firms, driven by a devalued yen, a robust public market, and reforms aimed at enhancing corporate governance. Goldman Sachs, a seasoned player in private equity with assets under management exceeding $90 billion worldwide, is under the leadership of CEO David Solomon, who since 2019 has pivoted towards raising external capital for investments to bolster fee-derived revenue instead of solely relying on its own balance sheet.