Wall Street behemoth poised to swoop on property investors
Goldman Sachs has launched a $3.4 billion fund aimed at purchasing shares from real estate investors and fund managers facing cash shortages.
The new fund, Vintage Real Estate Partners III, focuses on investing in shares of real estate funds, often involving stakes in large property portfolios or development projects.
The $3.4 billion fund is one of the largest pools of money dedicated to buying shares in private real estate funds, marking a 23% increase from the $2.75 billion raised by Goldman Sachs for a similar fund in 2020.
The latest fundraising effort follows the firm’s $7 billion raise in May, which was intended for lending to real estate investors and developers in an underfunded market.
Goldman Sachs’ strategy capitalizes on the current market dynamics where many investors and fund managers face liquidity challenges. The firm sees opportunities to acquire fund shares at potentially discounted prices due to these pressures.
The timing of Goldman’s fundraising comes just six months after its rivals Blackstone and Ares Management made similar moves. Blackstone raised $2.6 billion for its largest real estate fund to date in late 2023, while Ares Management secured $3.3 billion, slightly short of its $3.5 billion target.
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Goldman Sachs said that the new fund’s capital can be used to buy shares of real estate funds from large investors. It also aims to support deals where fund managers want to offer all investors in a fund the chance to cash out simultaneously, avoiding the need to sell assets at unfavorable prices.
As of Dec. 31, 2023, Goldman Sachs managed over $2.8 trillion in assets worldwide. Since its inception in 1998, Goldman Sachs’ Vintage Strategies has become a major player in the secondary investment market, with over $70 billion invested to date.
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