Goldman Sachs Alternatives has raised $3.4bn (€3.2bn) for its Vintage Real Estate Partners III fund (VREP III), the largest ever amount the manager has received for its real estate secondaries strategy.
VREP III, the third iteration of Goldman Sachs’ dedicated real estate secondaries strategy, closed above its fundraising target with commitments from a global and diverse group of institutional and high net worth investors and a “meaningful commitment” from Goldman Sachs employees, the manager said.
The firm’s predecessor fund, VREP II, closed on $2.75bn of commitments.
In May, Goldman Sachs Alternatives announced the final close of West Street Real Estate Credit Partners IV (RECP IV) and related vehicles building on the firm’s decades-long history in real estate credit.
The RECP IV pool of capital represents more than $7bn of real estate lending capacity including leverage, and taken together with capital raised for VREP III “represents over $10bn of liquidity-oriented real estate capital available for deployment”, from separate parts of the firm’s investment platform, Goldman Sachs said.
Harold Hope, global head of Vintage Strategies at Goldman Sachs Alternatives, said: “We believe the current market environment represents one of the most compelling deployment opportunities that we have observed in real estate secondaries.
“As the largest dedicated real estate secondaries fund raised to date, VREP III will be well-positioned to capitalise on increasingly attractive opportunities, in a market where size is a meaningful competitive advantage.”
Hope added that the success of the fundraise “reflects the recognition of the Vintage team’s 25-year track record which includes 14 years of experience investing in real estate secondaries”, as well as the attractive market opportunity.
Sean Brenan, who leads real estate investing activity for the vintage strategies at Goldman Sachs Alternatives, said: “Demand for real estate secondary solutions across both LPs and GPs is at an all-time high, driven by the turmoil in global real estate markets and a strong need for liquidity.
“We believe the pressure on real estate is here to stay for the foreseeable future, and we are hopeful that this capital will enable us to continue to be a partner to real estate market participants who need innovative capital solutions to help alleviate some of their liquidity needs.”
Since inception of the strategy, the vintage team has deployed over $8.9bn to 165 real estate secondary transactions.
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