A Goldman Sachs Group Inc. investment unit that specializes in buying high-yield or unrated debt is seeking to raise money through an initial public offering.
Goldman Sachs Liberty Harbor Capital LLC, based in New York and organized as a business-development company, filed a preliminary prospectus with the U.S. Securities and Exchange Commission on March 29. The firm has invested about $72.7 million in eight companies since it was initially funded by GoldmanSachs in November, according to the filing.
Goldman Sachs raised about $2.7 billion in 2007 for a hedge fund called Liberty Harbor that invested in credit. During the 2008 financial crisis Goldman Sachsconverted to a bank. The 2010 Dodd-Frank Act’s so-called Volcker Rule limits banks from investing more than 3 percent of their own money in private- equity or hedge funds.
Goldman Sachs employees and lawyers met in February 2012 with Federal Reserve Board staff to request that regulators exempt credit funds from the 3 percent limit, according to a summary published by the Fed. The preliminary prospectus said that Goldman Sachs Liberty Harbor Capital was organized as a business development company and funded by Goldman Sachs on Nov. 15.
“We expect and intend that we will not be covered under the Volcker Rule once such rule is fully effective,” according to the preliminary prospectus. “The full impact on us will not be known with certainty until the rules are finalized.”
The prospectus doesn’t say how much the fund intends to raise in the offering.
The prospectus lists the following portfolio companies: Affordable Care Inc., based in Kinston, North Carolina; Dispensing Dynamics International, based in Industry, California; Goodrich Petroleum Corp., based in Houston; Hutchinson Technology Inc., based in Hutchinson, Minnesota; JG Wentworth Inc., based in Radnor, Pennsylvania; Lone Pine Resources Canada Ltd., based in Calgary; Molycorp Inc., based in Greenwood Village, Colorado; Washington Inventory Service, based in San Diego.