US investment bank Morgan Stanley is trying to catch up with Goldman Sachs in the private equity stakes, Financial News reports.
The bank is planning to raise at least $6bn for a new private equity fund, which will be Morgan Stanley’s first big fund since it spun off its private equity arm as Metalmark Capital three years ago.
The fund, which could also involve a separate vehicle with a further $1bn to invest in Asia, comes as Goldman Sachs has raised its target for its sixth fund. It had targeted $10bn but after a first closing of $12bn at the end of January, Goldman Sachs is now aiming for as much as $15bn.
A source with knowledge of Morgan Stanley’s plans told Financial News it would aim for less than Goldman Sachs’ sixth fund. Morgan Stanley is also evaluating plans to encourage its bankers to source private equity ideas, according to the paper.
Incentives under consideration range from a “finder’s fee” to more complicated structures that would give bankers a portion of the carried interest from a deal.
About 40% of the fund would go into European investments, 40% into US companies and the remainder to Asia. Morgan Stanley is also raising a record real estate fund with a target of $8bn, Financial News said.
But it’s not just the banks that are busily raising money, the paper added.
The buyout industry has set records for fundraising in Asia and Russia in the past month. Baring Vostok Capital Partners raised a $1bn fund for the Russian market and is raising an additional sidecar fund of up to $3bn — hot on the heels of last week’s news that Affinity Equity Partners, a buyout firm launched by three former UBS bankers, had set a record in the Asian market with a $2.8bn fund.
Meanwhile, Blackstone is set to close the world’s biggest fund at $20bn within the next few months and UK buyout house Permira set a record for a European fund last year when it raised €11.1bn for its fourth fund.
