Goldman Sachs Alternatives has announced the final close of West Street Real Estate Credit Partners IV and related vehicles. The pool of capital represents over $7 bn (€6.5 bn) of lending capacity including leverage.
The fundraise was completed above target and is the largest to date in its series. The capital was raised from new investors, longstanding investors who increased allocations to the strategy, and significant investments from Goldman Sachs and its employees.
Institutional investors in the strategy include sovereign wealth funds, insurance companies, and U.S. and international pension plans. Investors from family offices, Goldman Sachs Private Wealth Management and third-party wealth channels also made significant commitments.
Real Estate Credit Partners IV will be the first fund in the series to make disclosures under Article 8 of the European Sustainable Finance Disclosure Regulation (SFDR).
Alternative lending opportunities
The fundraise comes amid a significant opportunity set in real estate credit driven by major dislocations in real estate markets globally, creating attractive opportunities for alternative lending sources that can provide size and certainty of execution to borrowers.
The fund has already started investing into this environment, committing over $1.8 bn across eight investments globally to date.
Since 2008, Goldman Sachs has invested over $20 bn in high yield real estate credit globally.
Supply demand imbalance
Jim Garman, global head of real estate at Goldman Sachs Alternatives, said: 'Consistent with our thirty-year history investing through multiple cycles, our real estate platform is designed to be dynamic in the face of changing conditions.
'While our flagship equity strategies provide clients with access to differentiated opportunities across sectors and regions, with specific focus on assets benefitting from trends in technology, demographics and sustainability, credit has always been a critically important component of our product mix, particularly during periods of capital markets disruption.'
Richard Spencer, chief investment officer for real estate credit at Goldman Sachs Alternatives, said: 'The market for real estate credit is characterised by a material and growing supply and demand imbalance.
'We believe this is creating attractive opportunities for alternative lending sources that can provide size and certainty of execution to borrowers.
'With the close of one of the largest pools of capital dedicated to this opportunity, we are excited to continue the Real Estate Credit Partners program’s long history of providing tailored and creative financing solutions to the world’s leading developers and owners of high-quality real estate in the US, Europe and Australia.'
Jeff Fine, global co-head of alternatives capital formation at Goldman Sachs Alternatives, said: 'As a solutions provider to the world’s most sophisticated investors, our real estate credit offering has become an increasingly important allocation for institutional and wealth clients alike, evidenced by the fund’s significantly expanded investor base and increased commitments from existing clients.
'For investors seeking attractive risk-adjusted returns across cycles, real estate credit is an excellent diversifier to private credit and real assets exposures. We are grateful for our clients’ partnership and trust in our differentiated approach.'
