Goldman Sachs Capital Partners

Goldman Sachs Alternatives

Company type	Division
Industry	Alternative investment, Private equity
Founded	1986 (1986)
Headquarters	New York City , United States
Products	Private equity, private credit, secondaries, real estate, infrastructure, growth equity
Parent	Goldman Sachs

Goldman Sachs Alternatives serves as the alternative investment division of Goldman Sachs, focusing on global investments in private equity, private credit, secondaries, real estate, infrastructure, and growth equity. Established in 1986, this division is based in New York City and oversees assets amounting to US$514 billion as of September 2024.

History

Traditionally, Goldman Sachs engaged in investments alongside its investment banking clients across diverse sectors. In the early 1980s, the firm cautiously ventured into leveraged buyouts and high-yield bonds, concentrating primarily on advisory roles in mergers and acquisitions. Starting in 1983, Goldman expanded its scope by making longer-term private equity investments connected to its banking clientele.

The creation of Goldman Sachs Capital Partners occurred in 1986, contemporaneously with similar groups at firms such as Lehman Brothers Merchant Banking and Morgan Stanley Capital Partners. This initiative introduced investment partnerships that allowed clients to participate directly in private equity transactions.

On April 23, 2007, Goldman finalized the closing of GS Capital Partners VI, securing $20 billion in committed capital—of which $11 billion came from institutional and affluent investors, while Goldman Sachs and its employees contributed $9 billion. By late 2019, CEO David M. Solomon unified GS Capital Partners with other direct-investment teams into the Merchant Banking Division (MBD), which manages roughly $140 billion in assets.

Investment funds

Beginning in 1992, GSCP has been raising third-party capital and investing on behalf of Goldman Sachs, its clients, and employees via institutional private equity funds. Its investor base comprises pension funds, insurance companies, endowments, fund of funds, wealthy individuals, sovereign wealth funds, and various institutional entities.

By the close of 2008, GSCP had completed fundraising for seven distinct funds totaling nearly US$39.9 billion in committed capital:

Fund	Vintage Year	Committed Capital ($m)
GS Capital Partners	1992	$1,104
GS Capital Partners Asia	1994	$300
GS Capital Partners II	1995	$1,750
GS Capital Partners III	1998	$2,780
GS Capital Partners 2000	2000	$5,250
GS Capital Partners V	2005	$8,500
GS Capital Partners VI	2007	$20,300

Later funds include West Street Capital Partners VII (2017) with $7 billion; West Street Capital Partners VIII (2020) raising $9.7 billion; GS Capital Partners IX (2022); Vintage VIII (2020) with $10.3 billion; Vintage IX (2023) at $14.2 billion; Vintage Infrastructure Partners (2023) with $1 billion; and West Street Life Sciences I (2024) which secured $650 million.

These investment vehicles illustrate Goldman Sachs’ strategic approach to broadening its private equity holdings and diversifying its offerings across international markets to strengthen its competitive positioning and enhance asset management results.

Investments

Founded in the late 1990s, Goldman Sachs Alternatives ranks among the foremost global private equity investors and competes with firms like Kohlberg Kravis Roberts, Blackstone Group, Bain Capital, Carlyle Group, and TPG Capital. Since launching the Goldman Sachs Capital Partners 2000 Fund, it has been involved in several significant leveraged buyout transactions:

Investment	Year	Company Description
Burger King	2002	Alongside TPG Capital and Bain Capital, GS Capital Partners led a $2.3 billion leveraged buyout of Burger King from Diageo. Following initial operational challenges, the acquisition price was adjusted down to $1.5 billion. With franchisees controlling 92% of outlets supporting the move, the company underwent a comprehensive brand revitalization and prepared for an initial public offering in 2006.
SunGard	2005	GS Capital Partners joined six other firms in an $11.3 billion acquisition of SunGard—then the largest leveraged buyout since RJR Nabisco and the biggest technology sector buyout at that time. This seven-firm consortium was notable for its size but attracted criticism over cross-ownership concerns.
Alltel	2007	Together with TPG Capital, GS Capital Partners purchased Alltel Wireless for $27 billion. The transaction closed in November 2007 after receiving FCC approval but was sold to Verizon just six months later amid economic uncertainty.
Biomet	2007	GS Capital Partners collaborated with The Blackstone Group, Kohlberg Kravis Roberts, and TPG Capital to acquire medical device manufacturer Biomet for $11.6 billion.
Energy Future Holdings (formerly "TXU")	2007	A consortium including GS Capital Partners, Kohlberg Kravis Roberts, and TPG Capital completed a landmark $44.37 billion buyout of this regulated utility and power producer—the largest leveraged buyout ever recorded. The group managed regulatory approvals successfully and implemented significant changes to the company’s environmental policies before Energy Future filed for bankruptcy protection in 2014.

In addition to these deals, Goldman Sachs pursued a high-profile but ultimately unsuccessful bid for upscale audio equipment maker Harman International Industries in 2007 alongside Kohlberg Kravis Roberts. Due to tightening credit conditions, both firms withdrew from the proposed $8 billion acquisition, leading to a more than 24% decline in Harman’s stock price.