Goldman Sachs (NYSE:GS) Asset Management (GSAM) has successfully closed its West Street Infrastructure Partners IV (WSIP IV) fund at $4 billion, marking the largest infrastructure fund closed this year according to PitchBook data. The fund's closure comes in a challenging private equity fundraising environment and signals an end to a fundraising drought in 2023. GSAM's WSIP IV has attracted a diverse range of investors including institutional investors, wealthy individuals, and company employees.
The WSIP IV fund targets value-added investments in global mid-market businesses, offering critical societal services with defensive cash flows and strong market positions. The fund's focus on assets such as toll roads is particularly appealing due to their consistent returns and inflation-hedging properties.
Philippe Camu, GSAM's chairman of infrastructure, affirmed the success of the fundraising endeavor and highlighted the strength of their global platform and commitment to delivering consistent investor returns.
Already, the WSIP IV fund has committed $2.3 billion to eight companies including Synthica Energy, Frøy ASA, Verdalia Bioenergy, GridStor, ImOn Communications, and Adapteo. These investments are diversified across sectors and geographies. The fund's focus on energy transition-enabling businesses is poised to benefit from decarbonization, digitization, de-globalization, and demographic trends.
Significant deals include the acquisition of Adapteo for about $737.95 million shortly after fundraising began, the launch of Verdalia Bioenergy with €1 billion for European expansion, and the purchase of a 72% stake in Froy from SalMar, valuing the business at about $1.1 billion.
The closing of WSIP IV follows the recent closure of Goldman Sachs’ inaugural infrastructure secondaries fund, Vintage Infrastructure Partners I, with $1bn of commitments. This fourth fund represents a significant increase from its third fund which closed at $2.5 billion in 2017.
Scott Lebovitz of Goldman Sachs predicts infrastructure investments will continue to benefit from decarbonization trends. The successful closure of WSIP IV is expected to rejuvenate the global closed-end real assets fundraising sector, which is projected to hit a decade-low. However, the fund's status as the largest infrastructure fund of the year could be challenged if Global Infrastructure Partners' fifth flagship fund finalizes its closure in 2024.
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