Goldman raises around $1.2bn so far for third RE secondaries fund – updated

Goldman Sachs Asset Management, the world’s third-largest secondaries fundraiser according to the SI 50, has passed the $1 billion mark in fundraising for its latest real estate secondaries fund.

Filings with the US Securities and Exchange Commission show Vintage Real Estate Partners III has raised at least $1.18 billion so far.

The New York-headquartered firm launched Fund III in August 2022 and held a third close on the fund on $707.5 million last March, according to Secondaries Investor data.

The predecessor fund, Vintage Real Estate Partners II, closed on $2.75 billion in 2020 against a $1.25 billion target, according to Secondaries Investor data.

Fund II is the fourth-largest real estate secondaries fund to date, according to data compiled by Secondaries Investor. The top two spots are held by Ares Management‘s Landmark Real Estate Partners VIII and IX funds, both of which closed on $3.3 billion. They are followed by Partners Group’s Real Estate Secondary 2017 fund, which raised $2.9 billion.

In November, Blackstone Strategic Partners closed the fifth-largest real estate secondaries fund, Strategic Partners Real Estate VIII, on $2.6 billion.

GSAM raised over $15 billion for two secondaries programmes last year, comprising $14.2 billion for its flagship private equity-focused Vintage IX vehicle and $1 billion for its debut commingled Vintage Infrastructure Partners fund.

Transaction volumes in real estate secondaries reached $9.8 billion last year, down 21 percent from $12.4 billion in 2022, according to data from Ares. Real estate secondaries transactions accounted for 2 percent of the overall $111 billion of secondaries volume last year, according to research from Greenhill.

Pricing for real estate secondaries dropped from 78 percent of NAV in 2022 to 70 percent of NAV in 2023, according to the Greenhill report. Pricing may drop further amid persistent macroeconomic uncertainty and refinancing risks, the report said, adding that assets focused on industrials and logistics have fared better than others. There are, however, opportunities to be had. Buyers favoured exposures to data centres, healthcare, logistics, industrial real estate and, selectively, multifamily residential, the report said.

Limited partners viewed secondaries as a smart way to gain exposure to real estate at a late stage in the economic cycle, GSAM’s global head of private market secondaries Harold Hope told Secondaries Investor when the firm closed Fund II in 2020.

“When you invest in a real estate opportunities fund, they’re doing strategies that are much higher risk and return, like development, repositioning and buying land,” Hope said at the time. “When you buy that fund on a secondary basis in year five, six or seven, it’s a very different risk profile.”

GSAM declined to comment on fundraising activities for Fund III.

– This report was updated to show that Fund II is the fourth-largest real estate secondaries fund as of 19 March, and that Ares Management holds the top two spots for RE secondaries fundraises.