The head of Goldman Sachs Capital Partners said today that Goldman will start pursuing smaller deals. Richard Friedman, speaking at the Dow Jones Private Equity Analyst conference in New York, cited a new investment environment shaped by the ongoing credit crunch for the switch in strategies.
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."
Goldman will "pursue smaller deals"
BloggingBuyouts is provided for informational purposes only. Nothing on the service is intended to provide personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter. You are solely responsible for any investment decisions that you make. The contributors who provide the content of BloggingBuyouts may, from time to time, hold positions in the securities discussed at the time of writing and they may trade for their own accounts. Such holdings will be disclosed at the time of writing. By using the site, you agree to abide to BloggingBuyouts' Terms of Use.
