Goldman Sachs eyes $2b for 1st Asia-focused pacific private equity fund

Goldman Sachs plans to launch a $2 billion private equity fund focused on Asia’s growth potential. This marks the firm’s first dedicated fund for the Asia Pacific region, reflecting a strategic shift in response to changing economic conditions.

The anticipated fund targets the fast-growing economies of the Asia Pacific region. Japan is likely to receive half of the fund’s capital, with India, South Korea, and Australia also being key markets.

The fundraising effort comes at a time of change for private equity in Asia, with firms reassessing their investment strategies and country allocations due to geopolitical tensions, rising interest rates, market volatility, and macroeconomic headwinds.

Global investors have been particularly cautious about China due to its slowing economy, recent regulatory crackdowns, and ongoing tensions with the United States.

Data from Preqin, an industry data provider, shows that in the first half of 2024, only $2.2 billion was raised across five China-focused private equity funds.

On the other hand, Japan has become a promising market for private equity firms due to factors like a weak yen, a strong stock market, and government efforts to enhance corporate governance.

The Nikkei index, Japan’s benchmark stock market index, surged by 23 per cent this year, marking its biggest annual rise ever. Additionally, private equity-backed mergers and acquisitions in Japan reached a record $35.5 billion in 2023.

Goldman Sachs is shifting its focus towards Japan, in line with comments made by Stephanie Hui, the firm’s head of Asia private equity and global co-head of growth equity.

Attribution: Reuters