Goldman Sachs has spun off into a new firm a private equity group that invests in inner city-based middle-market companies and companies that reflect demographic trends in the US, according to people familiar with the situation.

The new firm, which will be known as New MainStream Capital, completed its spinout Wednesday. It will manage about $250m, which is made up of investor money for new deals and most of the corporate portfolio from Goldman Sachs' Urban Investment Group, as the private equity team was known inside the bank.