Goldman Sachs is pondering a $2 billion venture and growth fund that could boost its stature in the world of technology investing, sources told Bloomberg.
The amount of the fund being $2 billion would make it one of the largest in the field, Bloomberg reported. It could help Goldman Sachs court bigger investors and investments. SoftBank's Vision Fund has $100 billion, but otherwise, not many firms have investment funds in the billions.
The move comes after Goldman's recent high growth investments, including bets on Uber and Plaid when those companies were still private. The firm's plan is to manage more money for clients and to bring down investments from its own balance sheets. There are two goals — to free up capital and to generate a steadier revenue stream from management fees, according to Bloomberg.
By investing in startups at different stages, Goldman could set up relationships to work with them later once they go public. Bloomberg reported the firm has spent several years building up a growth equity unit that has over $8 billion under management.
According to Bloomberg the field is growing, though. Tiger Global Management, Sequioia Capital and TCV are all working on similar projects.
While the conversations are still in an early stage, according to the sources Bloomberg spoke to, the funding could start next year. The firm has a few high net-worth clients that are expected to be partners in the fund, and the investments will be between $30 million and $200 million per company, Bloomberg reported.
Goldman Sachs has pushed fervently to acquire General Motors' GM card business, which is at the forefront of new technology to let consumers connect with businesses digitally while in a car, including booking hotel rooms or paying for gas.
The bank also recently appointed a new digital asset leader in Matthew McDermott, who was previously managing digital assets for the firm.
