Goldman Sachs locks down almost $10bn for mezzanine fund

The firm outraised its previous junior debt vehicle, wrapping up the fund at a figure that puts it in competition with Oaktree for the largest credit fund ever raised

Goldman Sachs has done it again – raising the largest mezzanine fund ever and breaking its own record in the process, according to PDI data.

The storied New York-based investment bank has collected $9.9 billion for its GS Mezzanine Partners VII, which, with leverage, will give the firm $13 billion to deploy. Its latest vehicle surpasses the $8 billion figure for Fund VI.

The firm declined to comment.

Earlier fund vintages have posted single-digit net internal rates of return. GS Mezzanine Partners V and GS Mezzanine Partners 2006 posted net IRRs of 8.98 percent and 4.99 percent as of 30 June, respectively, according to performance reports from the Minnesota State Board of Investments. The multiple on invested capital for those funds were 1.12x and 1.19x. Figures for Fund VI were not immediately available.

Fund VII’s raise may be the single largest credit vehicle ever raised; though it could be second to Oaktree Capital Management’s $12.48 billion distressed debt raise across Oaktree Opportunities Fund X and Fund Xb if they are counted as one unit, as Fund Xb was a sidecar vehicle to Fund X.

Mezzanine debt had raised $24.36 billion this year, without taking the Goldman Sachs vehicle into account, which had put it on track to the be lowest since 2014 when the strategy raised  $25.49 billion. Last year, mezzanine vehicles raised $52.3 billion.