Who Will Inherit the Family Business? Often, It’s Private Equity
Wall Street JournalSep 17, 2022
On Tuesday, Goldman Sachs Group Inc. said it raised $9.7B in commitments for its new private equity (PE) fund West Street Capital Partners VIII, surpassing the $7B raised in 2017 for fund VII and its largest buyout fund since 2007.
Sitting under the Wall Street giant's $2.5T asset management arm, the fund seeks to invest in companies valued at between $750M and $2B. It also plans on investing an average of $300M in companies in the financial, healthcare, consumer, technology, and climate change transition sectors.
A positive, albeit novel, aspect of these PE funds is their ability to save family-owned businesses when aging owners can no longer run the show. Though it doesn't always work out, firms like Goldman often have the financial capability to retain a company's success or even boost its profitability.
PE funds are terrible for many small businesses, but none more so than the healthcare industry. Time and time again we've seen PE firms snatch up local hospitals, treat them solely as a five-to-seven-year investment, and then the intimate, affordable experience a doctor's visit should be all of a sudden vanishes.