GOLDMAN SACHS is seeking to raise $1 billion (£525 million) from its employees as part of the financing of a $10 billion private equity fund, The Times has learnt.

The fund, once financed, will put Goldmans on an equal footing with the world’s biggest buyout firms.

About a third of the money is expected to be raised from the bank and its employees, who earn an average $521,000 each, with the rest coming from investors in Asia, Europe and the US.

Money-raising for the global fund is expected to be completed at the beginning of next year. The first investments will be made immediately after that.

The fund will be the fifth- biggest raised, behind funds set up by KKR, Blackstone and Permira. The average size of the investments made by the fund will be between $300 million and $400 million. No more than 15 per cent of the fund will be put into a single company.

Although the private equity division of Goldman Sachs will continue to co-invest with other private equity groups — the bank does not want to lead deals — the fund will reignite discussions about conflicts of interest at Goldman Sachs, which advises many of the world’s biggest companies on deals.

Hank Paulson, the former chairman and chief executive, who is the US Treasury Secretary, delivered a rebuke to private equity bankers in Europe this year, warning them against making unsolicited bids.

However, Mr Paulson has since been succeeded at the bank by Lloyd Blankfein, who is beginning to make his mark on the shape and direction of the Wall Street firm.

Mr Paulson’s rebuke followed a series of failed bid attempts by private equity consortiums that included Goldman Sachs. The failures included approaches to ITV, the independent broadcaster, and Mitchells & Butlers, the pub operator. Goldman Sachs’s infrastructure fund also tabled a £10.33 billion bid for BAA, Britain’s biggest airport operator. BAA was taken over by Ferrovial, the Spanish group.

Recent exits by the Goldman Sachs private equity division include the partial flotation of Burger King, the fast-food chain. The division is also in the process of selling Berry Plastics, the American firm, for $2.25 billion. The bank owns an estimated 63per cent of the company, which was bought for $870 million four years ago. Profits from the sale are expected to boost the bank’s fourth-quarter earnings.

The $60 billion or so in total raised by the top private equity firms is fuelling speculation that there is about to be a spate of bids for the largest UK or American companies. The 18-year record for the largest private equity deal was broken this year when a consortium of private equity firms including Bain and KKR bid $33 billion for HCA, the US medical group.

NTL, the cable company, has also attracted the attention of a group of private equity investors. A consortium that includes Bain and KKR is considering a $20 billion debt-and-equity bid for the group.

Times Recommends

• Barclays blocks further Lehmans revelations
• Gatwick staff told to reapply for jobs
• Lord Adonis: cabin crew strike could sink BA