Goldman Sachs has agreed to acquire around a 12% stake in energy-focused private equity firm Riverstone for around $500 million. This comes just one day after Goldman also purchased less than a 10% stake in tech-focused growth equity firm Accel-KKR.
Why it's a big deal: There once was an expectation that lots of private equity firms would file for IPOs, both for expansion capital and so that management could cash in on brand equity. But that worm has turned and been backed over by a truck. Now we have an accelerating trend of PE firms selling minority stakes to shops like Goldman Sachs, which is raising a $2 billion fund for this purpose (out of a group called Petershill that was originally formed a decade ago to buy into hedge funds). On this particular case, it also reflects how Riverstone's late aughts pay-to-play scandal ― which prompted The Carlyle Group to cut ties with the firm ― is no longer a reputational risk.