Goldman Sachs Asset Management has made a preferred equity investment from its latest real estate fund – the latest example of the niche capital type being used since the onset of the pandemic-induced pause in the secondaries market.
The New York-headquartered firm has invested $200 million into a portfolio of five underlying investments managed by affiliates of Colony Credit Real Estate‘s (CLNC) manager, according to a statement seen by Secondaries Investor.
The portfolio comprises four co-investments and one industrial distribution facility leased to a national grocery chain. CLNC can draw down up to $29 million in additional commitments for future allocation to the portfolio.
“Goldman Sachs’ Vintage Funds provided strategic capital and expertise that allow us to retain flexibility and position these assets for future growth,” said Andrew Witt, chief operating officer of CLNC. “The Goldman Sachs team is a value-added partner that shares our commitment to maximising value on behalf of our shareholders and other constituents.”
CLNC is a commercial real estate credit REIT focused on originating, acquiring, financing and managing a portfolio of commercial real estate debt and net lease real estate investments predominantly in the US. It has a $4.7 billion portfolio real estate debt, according to its website.
Vintage Real Estate Partners II raised $2.75 billion against a target of $1.25 billion by final close in May. The firm was anticipating a particular opportunity in preferred equity as GPs sought capital to strengthen their portfolios in light of covid-19, managing director and global head of private equity secondaries Harold Hope told Secondaries Investor at the time.
Preferred equity volumes were up 71 percent in the first half, according to Evercore’s half-year survey.