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Goldman’s Petershill Unit Slides After $1.4 Billion U.K. IPO

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(Bloomberg) --

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Goldman Sachs Group Inc.’s Petershill Partners was valued at 4 billion pounds ($5.5 billion) in the latest public offering that seeks to seize on investor appetite to grab a piece of explosive growth in private equity fees.

The Petershill portfolio, which offers investors stakes in almost two dozen money management firms, priced at 350 pence a share, in the center of the marketed range. The shares dropped 1.7% on Tuesday, in contrast to European buyout firms that had stock pops on their first days of trading.

Petershill -- a Goldman entity set up in 2007 to acquire minority positions in private equity, hedge funds, and other alternative managers -- has attracted rivals like Blackstone Inc. and Dyal Capital, who have raised funds with similar strategies, and the listing provides another opportunity for public market investors to buy in. Appetite in private equity has been strong amid the market boom and both Bridgepoint Group Plc and Antin Infrastructure Partners SA surged more than 25% on their recent trading debuts.

Newly formed Petershill Partners holds several of the portfolio company stakes acquired by Petershill. It holds 19 stakes including Accel-KKR, Francisco Partners, Riverstone Holdings LLC, Caxton Associates LP and LMR Partners LP.

Petershill Partners raised 547 million pounds selling new stock, while its backers offloaded existing shares worth 465 million pounds, according to a statement Tuesday. The firm originally marketed the shares at 320 pence to 380 pence each.

Petershill co-head Ali Raissi said earlier the IPO will create a permanent pool of capital and align its interests with its investment targets for the long term.

The 1-billion-pound IPO could be increased to 1.2 billion pounds if underwriters exercise an option to sell additional shares.

Petershill’s stock was down 1.7% to 343.9 pence at 11:21 a.m. in London after rising as much as 2.7% in early trading. The FTSE 100 Index was down 0.6%.

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