FILE PHOTO: A sign is displayed in the reception of the Sydney offices of Goldman Sachs in Australia, May 18, 2016. REUTERS/David Gray/File Photo

(Reuters) - Goldman Sachs Group Inc GS.N has collected more than $7 billion for a fund which purchases secondhand stakes in private equity funds, far exceeding its initial target, according to two people familiar with the matter.

The fund, called Vintage VII, is run out of the bank’s asset management division and had initially sought to raise $5 billion in capital. Nearing its final close, the fund was oversubscribed and had to turn some potential investors away, one of the people said, asking not to be named because they are not authorized to speak to the media.

The fund focuses on buyout and distressed strategies in developed markets. A Goldman spokesman declined to comment on the fund. In addition to its secondaries fund, Goldman has raised $7 billion for a traditional buyouts fund which is housed in its merchant bank.

Secondaries funds have become popular in recent years because they allow investors to place their cash across different markets and investment strategies without taking much concentrated risk. Investors in secondaries may also see a profit sooner than in traditional buyout funds, as investments tend to be made in more mature funds.

Goldman’s last secondaries fund raised $5.8 billion in 2012 and generated a net internal rate of return of 14.4 percent, according to an investor presentation. Traditional buyout funds generate an average internal rate of return of 20 percent, but their performance may be more volatile. In 2016, secondaries funds secured a combined $23 billion of investor capital, the second highest year on record, according to industry data provider Preqin.