Goldman Sachs Raise Over $7 Billion for Real Estate Lending

Sensing an opportunity in real estate credit driven by major dislocations in real estate markets globally and also looking at alternative lending sources, Goldman Sachs Alternatives, on Tuesday announced the final close of West Street Real Estate Credit Partners IV and related vehicles raising over $7 billion of lending capacity including leverage.  

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).

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 the US and international pension plans. Investors from family offices, Goldman Sachs Private Wealth Management and third-party wealth channels also made significant commitments, the company said in a statement.

The Fund has already started investing into this environment, committing over $1.8 billion across eight investments globally to date. The successful fundraise reflects the team’s strong track-record lending to leading real estate investors and developers in different market environments, providing customized and flexible credit solutions to high quality projects and assets.

Since 2008, Goldman Sachs has invested over $20 billion in high yield real estate credit globally. Real Estate at Goldman Sachs Alternatives leverages the broader resources of Goldman Sachs to source, evaluate and execute investments.  

Adapting to Changing Conditions           

Jim Garman, global head of Real Estate at Goldman Sachs Alternatives, said that consistent with their 30-year history investing through multiple cycles, the company’s real estate platform has been 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,” he said.

Richard Spencer, chief investment officer for Real Estate Credit at Goldman Sachs Alternatives, said that the market for real estate credit is characterised by a material and growing supply and demand imbalance.

He added: “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 and 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.” 

Goldman Sachs is one of the leading investors in alternatives globally, with over $450 billion in assets and the business invests in the full spectrum of alternatives including private equity, growth equity, private credit, real estate, infrastructure, hedge funds and sustainability.

The alternative investments platform is part of Goldman Sachs Asset Management, which delivers investment and advisory services across public and private markets for the world’s leading institutions, financial advisors and individuals.

Established in 1991, Goldman Sachs Alternatives has over $2.8 trillion in assets under supervision globally as of 31 March 2024 and is one of the leading investors in real estate with over $60 billion in capital invested since 2012.