Goldman reaches $7bn final close for real estate credit fund

Goldman Sachs’ alternatives arm has raised more than $7bn (£5.6bn) for its latest real estate credit fund at its final close, as the firm seeks to take advantage of market dislocation. The fundraise, for  West Street Real Estate Credit Partners IV and related vehicles, has amassed $7bn in lending capacity, including leverage. Goldman said the raise closed above target and is the largest to date in its series, with increased commitments from an expanded investor base. The capital was raised from new investors, longstanding investors increasing their 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 US and international pension plans. Investors from family offices, Goldman Sachs Private Wealth Management and third-party wealth channels also made significant commitments.  Goldman said 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 more than $1.8bn across eight investments globally to date. Jim Garman, global head of real estate at Goldman Sachs Alternatives, said: “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 [programme’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.” Photo by Nigel R Barklie/Shutterstock