Reuters UK- Even as market turmoil batters its hedge funds and threatens to scuttle buyouts, Goldman Sachs is raising a new fund to exploit distressed-debt bargains, people familiar with the mattersaid.
The largest U.S. investment bank has raised more than $1.5 billion (740 million pounds) for the past few weeks for Goldman Sachs Liquidity Partners III, the sources said. The fund, previously reported to target about $1 billion, will purchase a broad range of distressed assets, including mortgages and buyout loans.
Goldman previously raised Liquidity Partners funds in 1998, the year of Asia’s debt crises and the collapse of Long Term Credit Management, and in 2001, after the technology and telecom bubble burst.
Goldman declined to comment.
The investment bank’s efforts come as a number of hedge fund and private equity investment shops solicit capital for new distressed debt funds.
Mortgages and asset-backed securities, for example, have fallen in price after the subprime market melted down earlier this year. That fueled turmoil in other debt markets and corporate finance.
Banks worldwide must sell more than $300 billion of debt intended to fund a record volume of leveraged buyouts announced in the first half. Most of this credit was extended in better times but now faces a market demanding higher yields and more protective terms.
