StepStone raises $4.5bn for real estate secondaries strategy

StepStone’s real estate arm has raised over $4.5bn (€4bn) for its latest secondaries strategy.

The manager said the capital secured for secondaries co-investments and commitments to discretionary vehicles includes $3.77bn raised for StepStone Real Estate Partners V (SREP V).

As previously reported, New Jersey Division of Investment was considering establishing a $400m non-core real estate separate account with StepStone. The proposed allocation for the account included $75m for SREP V.

StepStone Real Estate said SREP V and its related separate accounts have so far committed $1.7bn across eight investments and have a pipeline of deals nearing completion.  

Jeff Giller, partner and head of StepStone Real Estate, said: “We believe the combination of value declines, historically low transaction volume, increased borrowing costs, and a slow fundraising environment has created unprecedented illiquidity across real estate markets.

“Our strategy—providing liquidity solutions to real estate vehicles and investors when traditional liquidity avenues are challenged—has proven resilient through all phases of the market cycle, and it’s especially compelling today.”

Josh Cleveland, partner and head of EMEA at StepStone Real Estate, said: “SREP V attracted a diverse global investor base, including sovereign wealth funds, pension funds, insurance companies, and wealth management platforms.

“The fund saw notably higher participation from North American institutions compared to prior vintages, along with increased commitments from investors in Europe, Asia, the Middle East, and Latin America.”

Brendan MacDonald, partner and COO at StepStone Real Estate, said: “Our advisory practice, which oversees roughly $170bn in real estate assets under advisement, continues to play a pivotal role in sourcing and evaluating secondaries transactions.

“We conduct over 1,000 manager meetings annually and have allocated approximately $17bn per year across primary investments in funds, secondaries, and co-investments. This level of engagement gives us a distinct vantage point in the market—and a strong edge in deal sourcing and diligence.”

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