Goldman Sachs offers its former partners exclusive access to the “1869 fund”
Goldman Sachs is offering its network of former partners, who range from tech executives to prime ministers, exclusive access to a new investment vehicle that will pump money into the Wall Street firm’s private market funds.
The so-called 1869 fund, which takes its name from the year Goldman was founded, invests in several private funds managed by the firm’s asset management division, according to five people familiar with the matter.
Former partners who invest in the fund of funds receive reduced management and performance fees, with the total amount an individual can invest capped at $5 million, the sources said.
They previously had access to private funds through Goldman’s wealth management platform and paid the same fees as other clients.
The 1869 Fund invests in Goldman Sachs Asset Management’s private funds, which focus on alternative investments, including private equity and real estate opportunities.
It has so far raised around $1 billion, two people added, although it is unclear how much capital has been deployed.
The ex-partners see the vehicle as an attempt by Goldman to retain an attachment to former big bankers who left to pursue other opportunities as well as those who may feel unhappy after being pushed out.
“You have helped create our 152-year history of excellence in the industry, and with this offer we hope to show our gratitude for your support, leadership and friendship over the years,” the bank wrote to the alumni. partners last year in a note announcing the new vehicle, which was seen by the Financial Times.
Goldman declined to comment.
Becoming a partner at Goldman Sachs, a title that brings multiple benefits including a guaranteed salary of $1 million a year, has always been one of the most prestigious positions on Wall Street.
Goldman appoints new partners every two years, but by 2020 the group’s ranks had swelled to the point that chief executive David Solomon decided to elevate fewer bankers to cut costs and ensure the title retains exclusivity.
Former Goldman partners include Gary Gensler, chairman of the Securities and Exchange Commission, and Anthony Noto, CEO of fintech company SoFi, who previously served as chief operating officer at Twitter.
Steven Mnuchin, who worked as US Treasury Secretary in the Trump administration, is also a former partner, as is Malcolm Turnbull, the former Australian prime minister. It is not known which former partners invested in the 1869 fund.
Alternative asset management is one of the areas Solomon is targeting to help diversify the bank away from investment banking and trading.
Solomon has set the bank’s asset management division a goal of raising $225 billion to invest in alternative assets between 2020 and 2024.