Tuesday, 30 August 2016
Last updated 46 min ago
May 8 2014 | 11:56am ET
Goldman Sachs’ sequel to its Petershill private equity fund, which invests in hedge fund firms, isn’t exactly proving a smash hit among investors.
Petershill II aims to raise the same $1 billion garnered by its predecessor. The first Petershill collected the sum in a matter of months. But since fundraising began for the second fund in the fall, Goldman has garnered less than $400 million.
The first Petershill Fund, which debuted in 2007, has managed an internal rate of return of just over 10%. But almost all of that gain is attributable to Petershill’s investment in Winton Capital Management, which blossomed during the financial crisis.
Petershill’s other investments haven’t panned out as well. Level Global Investors collapsed amidst an insider-trading scandal that has its co-founder facing six-and-a-half years in prison. Shumway Capital Partners closed its doors in 2011 after investors fled in the face of founder Chris Shumway’s decision to step down. And Trafalgar Asset Management lost star trading Lee Robinson, although Petershill invested in Robinson’s new firm, Altana Wealth.
Goldman spokeswoman Andrea Raphael told The New York Times that the firm is “pleased with the pace of fundraising.” She noted that “a number” of investors from the first fund had committed to joining the second.
Another change has been in management: Petershill’s first manager, Jonathan Sorrell, left for the Man Group in 2011. That fund, as well as the second, is now managed by Michael Brandmeyer and Ali Raissi.
Petershill II has already made a pair of investments, closing on stakes in Knighthead Capital and Pelham Capital in London. Like the first fund, it seeks to take 10% to 20% stakes in hedge funds with assets of between $2 billion and $15 billion.