Goldman will "pursue smaller deals"
For the past few years, Goldman has pursued massive leveraged buyouts, such as the $27 billion deal for Alltel Wireless. But problems in the credit markets have brought those buyouts to a halt. The change has been rapid and severe. "It's like the train conductor pulled the emergency stop," Friedman said.
Goldman's new smaller deals strategy will focus on "PIPES" -- private investments in public equity. With PIPES, investors take smaller stakes in target companies, and provide financing that helps smaller companies survive while they restructure. Goldman recently raised $20 billion for a new buyout fund, and much of it will be going into these smaller deals. Friedman stated that this new strategy does not imply that the pace of investments will slow; he expects to new fund to last only two to three years. "We have a multi-strategy investment business model," he said. "I'm not worried about investment pace."
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Reader Comments (Page 1 of 1)
9-19-2007 @ 4:45PM
Darlene said...
So what is the general opinion on this new strategy? Are we looking at the beginning of a trend relating to the decline of big buyouts? NewsVisual posted an interesting article this morning that took a look at the corporate connections of Goldman's current board (see article: http://www.newsvisual.com/newsvisual/2007/09/goldman-sachs-b.html ). I would be interested to know to what degree Goldman might take advantage of these connections when pursuing future deals.
9-19-2007 @ 7:38PM
michael said...
Great link -- thanks Darlene!