Buzz Archive:
The New Private Market for Funds: An Alternative to Going Public

by Sam Roseme, O'Melveny & Myers LLP, 8/7/2007

There is now an alternative to the public markets for private equity funds and hedge funds wishing to issue shares. The alternative is a newly-created private market that just may end up being the market of choice for funds if it proves to be viable. Goldman Sachs, as was reported in the Wall Street Journal, has developed a private market on which shares of funds will trade. The market is called "GS Tradable Unregistered Equity OTC Market" or GSTrUE. Oaktree Capital Management LLC, a Los Angeles-based investment firm with close to $42 billion in assets, was the first to sell its shares on GSTrUE. Oaktree raised $880 million in the private offering in May. And as of August 2nd, Apollo had filed to do the same. Is this a run around Sarbanes Oxley and public disclosure--or did publicity shy (compared to Blackstone) Oaktree make the right call? Many think they did.