Goldman Sachs, one of the world’s leading banks, is aiming to raise $2 billion in its first Asia Pacific-focused private equity fund. This move comes as the bank looks to deepen its exposure to some of the fastest-growing economies in the region. The fund-raising effort is part of a broader strategy by private equity firms in Asia to reshape their investment strategies and country allocations, given the current geopolitical tension, higher interest rates, market volatility, and macroeconomic headwinds.
Goldman Sachs Asset Management, the investment arm of the bank, has been actively marketing the new fund to sovereign wealth funds, pension funds, and private investors. The bank is targeting a first close by the fourth quarter of the year. The fund will primarily focus on investment opportunities in Japan, with approximately half of its capital expected to be allocated there. Additionally, India, South Korea, and Australia are also identified as key markets for the fund, offering promising investment opportunities.
Despite the challenges faced by global investors in China due to its economic slowdown, regulatory crackdown, and tension with the U.S., Japan has emerged as a hot spot for private equity investments. The country’s attractive factors include a cheap yen currency, buoyant public market, and policy drives to improve corporate governance. In fact, private equity-backed mergers and acquisitions in Japan reached a record $35.5 billion in 2023, highlighting the growing interest in the country as an investment destination.
Stephanie Hui, Goldman’s head of Asia private equity, mentioned in a statement that the bank was looking to raise an Asia-focused vehicle and intended to increase investments in Japan and India. The bank, with more than $90 billion in private equity assets globally, including buyouts and growth investments, has also expressed its intention to explore opportunities in China. The bank’s Asia private equity team, led by Hui, has deployed $17 billion across 242 investments in the region, showcasing its commitment to the Asia Pacific market.
Goldman Sachs has a long-standing presence in the private equity business, with more than 30 years of experience. Under the leadership of Chief Executive David Solomon, the bank has been reducing its own balance sheet in asset management and relying more on external capital for investments to boost earnings from fees. Over the last five years, the bank has invested in more than 60 companies in Asia, including prominent names like Japan’s Nippo Corp and Chinese software company Shenzhen Qianhai 4Paradigm Data Technology Co. Additionally, Goldman was an early investor in China’s e-commerce giant Alibaba Group, showcasing its track record of successful investments in the region.
