The secondaries market has been thrust into focus after two influential companies revealed they had set up a partnership to exploit opportunities.
Goldman Sachs Asset Management, and Germany’s largest public pension fund, BVK, have set up the €300 mln customised vehicle to invest in both traditional real estate limited partnership interests as well as more complex structured and non-traditional secondary transactions around the world.
The traditional secondaries market is well known for its private and often secretive nature given public trades would otherwise reveal details about investors and liquidity issues at certain vehicles.
Goldman Sachs, which is acting via its Vintage Funds division, and BVK, said the partnership would provide liquidity to general partners (the private equity language for fund managers) and investors in illiquid real estate assets. Universal Investment Luxembourg will administer the BVK structure through which it has made the commitment to the fund.
Goldman Sachs’ most recent dedicated real estate secondaries fund closed in 2020 on approximately $2.75 bn (€2.6 bn) in commitments and as of March 31, 2021 had completed 70 transactions, with most of the capital being deployed following the market dislocations caused by the coronavirus pandemic.
Igor Ostrowski, MD at Goldman Sachs, said, ‘The fund will allow BVK to gain access to an exciting segment of the secondaries market that continues to evolve and grow meaningfully.’
Manuel Wormer, head of global real estate investment Management at BVK, said, ‘Real estate secondaries investing is quickly establishing itself as a staple in major institutional real estate portfolios.’
‘We believe that the diversification that the strategy offers across underlying property types and vintage years, combined with strong structural tailwinds that will result in GPs (general partners) and LPs (limited partners) continuing to seek liquidity solutions, make this an accretive addition to our real estate portfolio.’
BVK, whose long hand name is Bayerische Versorgungskammer, is a public authority of the Bavarian Ministry of the Interior, it is the joint executive body of twelve liberal professional and communal pension schemes.
It currently has €107.3 bn AUM.
