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Goldman Sachs Partner Sumit Rajpal to Retire

Goldman Sachs Partner Sumit Rajpal to Retire

Friday, 07 February 2020 12:04 PM

Goldman Sachs' Sumit Rajpal, one of three co-heads of a merged alternative investing unit at the bank set up last year, is to retire, a source familiar with the matter said.

Business Insider, which was first to report Rajpal's resignation on Friday, said his departure leaves Andrew Wolfe as the most senior operating executive left from Goldman's old merchant banking division.

The bank has not yet named his replacement, the source said.

Rajpal had been slated to be a lead investor, alongside Wolfe, for a new buyout fund Goldman is launching. The source said he will no longer play a formal role in recruiting investors for that fund.

Reuters reported earlier on Friday, citing sources, that Goldman plans to raise $8 billion in only its second buyout fund since the 2008 financial crisis, bolstering its ability to secure deals worldwide.

Undeterred by a coronovirus epidemic in China that has cast a shadow over the global economy, the Wall Street heavyweight will kick off the fundraising next week via its private equity arm West Street Capital Partners, said two people with direct knowledge of the matter..

The fast-spreading virus is not seen as a hurdle to the fundraising as the bank is mainly targeting offshore, non-Chinese prospective investors, said one of the people.

It is aiming for a first close by the end of March - an important milestone indicating the fund has crossed a minimum threshold and can begin making investments, said the other person.

The new fund, substantially smaller than Goldman's biggest fund of $20 billion in 2007, underscored its commitment to the private equity business. Many banks, including Citigroup Inc and JPMorgan Chase & Co, have spun out or divested their private equity arms in recent years following the adoption of the Volcker Rule, which limited banks from investing their own balance sheets in funds.

Private equity firms have also been raising record amounts of capital globally, with Blackstone Group, the world largest alternative asset manager, last year raising a record $26 billion for its latest buyout fund.

Goldman's new fund will focus on deals where it gets majority control, with the goal of deploying 60% of the capital in America, said the first person. It also plans to make about 25 investments in various sectors, with the deal size ranging between $150 and $600 million.

Like its last fund - West Street Capital Partners VII that raised about $7 billion in 2017 - the new fund will seek capital from both intuitional investors and the bank's own employees, said the person.

Goldman declined to comment. The sources declined to be identified as they were not authorized to speak to the media.

Goldman's private equity arm, established in 1986, has been managed by its merchant banking division. It has raised about $47 billion since inception across eight funds, according to industry data provider Preqin.

In 2016, the arm was named West Street Capital Partners, after Goldman's New York City address, to comply with a post-crisis rule that does not allow private equity funds to bear the parent bank's name.

It has generated a net internal rate of return (IRR), which deducts management fees, fund expenses and carried interest, of 19%, since 2000, according to the first person.

© 2020 Thomson/Reuters. All rights reserved.

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Goldman Sachs' Sumit Rajpal, one of three co-heads of a merged alternative investing unit at the bank set up last year, is to retire, a source familiar with the matter said.Business Insider, which was first to report Rajpal's resignation on Friday, said his departure leaves...
goldman sachs, sumit rajpal, depart
Friday, 07 February 2020 12:04 PM
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