Goldman Sachs’ alts unit raises $7bn for real estate credit strategies
Goldman Sachs’ alternatives business has raised over $7bn (£5.6bn) for its real estate credit strategies after closing its latest fundraise above target.
The asset manager today announced the final close of West Street Real Estate Credit Partners IV and related vehicles. It said its $7bn fundraise was completed above target and is the largest to date in its series.
The capital was raised from a range of new investors, existing investors and “significant investments” from Goldman Sachs and its employees, the firm said.
Read more: Goldman Sachs seeks up to $17bn for private credit
Institutional investors include sovereign wealth funds, insurance companies, and US and international pension plans.
The fund also attracted investment from family offices, Goldman Sachs Private Wealth Management and third-party wealth channels.
Goldman Sachs’ focus on real estate credit comes at a challenging time for the sector, with segments such as office space expected to face significant losses in the coming years.
Read more: Goldman Sachs raises $700m to co-invest with private credit firms
But the firm noted “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, committing over $1.8bn across eight investments globally to date.
“The market for real estate credit is characterized by a material and growing supply and demand imbalance,” said Richard Spencer, chief investment officer for Real Estate Credit at Goldman Sachs Alternatives.
“We believe this is creating attractive opportunities for alternative lending sources that can provide size and certainty of execution to borrowers.”
Read more: Goldman Sachs: Pension funds eye private credit in 2024
Jeff Fine, global co-head of Alternatives Capital Formation at Goldman Sachs Alternatives, said: “For investors seeking attractive risk-adjusted returns across cycles, real estate credit is an excellent diversifier to private credit and real assets exposures.”
Goldman Sachs manages over $450bn in alternative assets, spanning private equity, growth equity, private credit, real estate, infrastructure, hedge funds and sustainability.
Goldman Sachs Alternatives’ real estate division has invested more than $60bn since 2012 across the spectrum of investment strategies from core to opportunistic and credit.
