Goldman Sachs Raises $700M for Hedge Fund Co-Investment Strategy

Goldman Sachs Asset Management has raised $700 million for a new fund that will invest alongside hedge funds and private credit firms.

The new fund – Union Bridge Partners 1 – will identify unique investment opportunities in both public and private markets that fall outside the mandate of traditional market participants, Goldman Sachs said.

Goldman Sachs said the fund will source “high conviction positions” from “leading external private credit and hedge fund managers.”

The closed-end fund is part of Goldman Sachs’ $340 billion External Investing Group (XIG), a platform with more than 400 employees and houses some of the firm’s flagship direct alternatives strategies, including the Vintage Strategies (Secondaries) and Petershill (GP Stakes) businesses.

The capital was raised from institutions, family offices, private wealth clients and significant commitments from Goldman Sachs employees.

The fund is already roughly 40% deployed to companies across North America and Europe in sectors including hospitality, fitness centers, software and music royalties.

“We have seen a significant increase in the opportunity to partner with our external managers to provide flexible capital solutions to companies across public and private markets,” Philip Pallone, who leads the Union Bridge program.

According to a recent Barclays analysis, institutional investors are optimistic about hedge funds’ prospects. The bank surveyed 315 investors, including private banks and family offices, and 85% want to make at least one allocation to a hedge fund in 2024, up from 80% in the previous year.