Chidem Kurdas
Liberty Harbor Capital, the Goldman Sachs credit manager that is expected to go public as a business development company, applied to the U.S. Securities and Exchange Commission for permission to invest together with other entities connected to Goldman.
The bank told regulators that there are information barriers between its various investment units, which are “walled off” to operate independently of each other. But Liberty Harbor and another unit named GS Investment Strategies are overseen by the same senior officer and hence may share investment-related information.
Goldman in effect seeks SEC approval for Liberty Harbor to be able to co-invest in private deals with funds managed by GSIP. The latter may be private equity or hedge funds.
This will provide Liberty Harbor with better deal opportunities, more bargaining power and greater diversification than it would have on its own, according to the bank’s argument. If forced to avoid co-investing with Goldman entities, Liberty Harbor would have to seek deal syndicates with unrelated parties.
While Liberty Harbor has not yet made an initial public offering, it raised money from several private placement transactions during the summer. For these it issued in total $516 million of equity. About 20% of the equity is owned by the Goldman bank holding company.
Tags: Banks, syndicates, US Securities and Exchange Commission
HedgeFundSmarts 
January 28, 2014 at 2:39 pm
[…] One legal question that hangs over the Goldman BDC is an application to the U.S. Securities and Exchange Commission to be allowed to invest together with oth… […]