Goldman Buying Low?
A fund is preparing itself to back leveraged buyouts, in what could shape up to be a move to take advantage of sellers’ lack of outlets for an exit.
July 24, 2008
Goldman Sachs has reportedly initiated efforts to develop a $10 billion fund that will back leveraged buyouts.
According to the Financial Times, the fund will purchase senior loans, the first paid off by borrowers. The move is reportedly going to take advantage of financing markets shortfalls created by the credit crunch.
The fund represents a continuation in the trend that has private equity and debt investment used together.
Goldman already has together a mezzanine debt fund—those debts paid after senior loans—of $20 billion. Together, the funds can commit to substantial deals without even needing to rope in additional investors or debt.
Goldman’s mezzanine fund has already made buys, in the form of $1 billion in First Data’s debt and about $1.2 billion of Harrah’s Entertainment’s debt. Though the reported senior debt fund has not yet completed fundraising, it has already begun weighing targets, the FT reported.
The FT article is available here.
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