Goldman seeks asset purchases in UK pension fire sale

Goldman Sachs is among a group of investors looking to buy cheap private assets from UK pension funds rushing to raise money after last week’s crisis in the bond market.

England pension The fund has been selling liquid assets since Prime Minister Kwasi Kwarten’s “mini” budget sparked a crisis in the gold coin market last week, forcing it to urgently raise cash. Many companies are now planning to sell their illiquid holdings, such as real estate, private his credit, and shares in buyout funds.

“We see 20-30% discounts on high-quality portfolios. [of stakes in private equity funds]” When, goldman sachs asset management. “This is definitely an opportunity.”

Like GSAM, investors, including Blackstone units, have billions of dollars in cash that can buy out pension plan holdings.

The deal was negotiated privately and could take months to complete, but investors expect a surge in the coming months.

“This market environment presents a very attractive buying opportunity,” said Ross Hamilton of Partners Group, a Swiss-based private equity firm that buys stakes in pension plan private funds. . “We’ve got over $9 billion in dry powder…it’s an exciting opportunity for us.”

Many pension funds entered the illiquid private market in search of higher yields during a decade of low interest rates.They began selling stakes in private equity and venture capital funds earlier this year fastest pace on recordpartly to rebalance the portfolio after the sale of listed equities and bonds.

During last week’s gold and silver crisis, pension funds were hit with collateral demands related to debt-fueled derivatives strategies, increasing pressure to sell assets and raise cash.

“There’s a cold wind blowing on illiquid assets,” said M&G fund manager David Lloyd.

The pension fund is also gearing up for cash demands from the buying groups it invested in to fund the wave of acquisitions agreed during last year’s frenzy of deals. Buyout groups often use so-called subscription lines or short-term loans to pay for these transactions and then request funds from investors a year later.

GSAM was also lending money to investors against private equity holdings so that they could access cash without selling their shares, Möllerberg said.

Pantheon partner Francesco Di Valmarana, who specializes in buying private equity and credit fund investments from other investors, said:

He added that some investors are now looking to sell their personal credit fund holdings at discounts as low as 10%.

“You’ve been seeing the ‘denominator effect’ for a while now,” he said. “What’s happening in the LDI market and UK pensions will only drive this rebalancing further.” Goldman seeks asset purchases in UK pension fire sale

Exit mobile version