Goldman Sachs to raise third infrastructure fund

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Goldman Sachs to raise third infrastructure fund

Goldman Sachs Infrastructure Partners has plans to raise about US$3 billion for its third infrastructure fund after closing GS Infrastructure Partners I and GS Infrastructure Partners II.

Goldman Sachs Infrastructure Partners closed its two infrastructure funds in 2006 and 2010, GS Infrastructure Partners I and GS Infrastructure Partners II respectively. GS Infrastructure Partners I raised US$6.5 billion while GS Infrastructure Partners II raised US$3.1 billion.

Goldman Sachs expects to complete the fundraising for its third fund by mid 2015. As the two previous funds, it is expected that the new fund will be focused on investment opportunities with the following parameters:

  • Sectors including transportation infrastructure such as airports, ports, railways and roads and utilities infrastructure such as electricity, gas and water networks and conventional/ renewable contracted power generation,
  • Global mandate across OECD countries, and
  • Target investment sizes ranging from $100 million to $500 million of GSIP capital per investment, with the ability to do larger transactions with additional partners.

The firm could find problems on the way due to a U.S. federal regulation known as the "Volcker Rule". It restricts banks from owning more than 3% of an infrastructure fund or any other private equity-type fund. Before this restriction, Goldman Sachs would generally invest about 10% of the capital of its infrastructure funds and between 30% to 35% of its private equity funds.

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