The firm is planning a fundraising blitz, combining four units that invest in real estate, private companies and other deals and developing a new unit in an effort to grow steady income-generating business that will appeal to investors, according to the Wall Street Journal. The new division will likely have roughly $140 billion in assets, and Goldman may try to fundraise as soon as this year for its first real estate equity fund since the financial crisis.
The move indicates that the firm’s new chief executive David Solomon wants to leave his mark on the firm and make the historically private partnership look more like a modern corporation. Executives hope these changes will boost the stock price of the company, whose shares still trade at about the same value that they had four years ago.
Goldman’s merchant-banking arm will be the core of the new division, and its special-situations group and strategic investing group will be part of it as well. The special-situations group is worth about $30 billion, and the strategic investing group works with financial-technology startup companies.
“We’re developing a comprehensive plan to grow,” Goldman president John Waldron said in May at an industry conference. “This will be a multiyear effort to evolve this business into more fee revenue and a more balanced business mix.”
Blackstone is the world’s largest real estate owner, and recently paid $18.7 billion for a massive industrial portfolio in the U.S. Blackstone is also taking $6.8 billion of its European warehouses and spinning it into one publicly traded company. [WSJ] – Eddie Small