Goldman Sachs Alternatives announced the establishment of its third real estate secondary fund, Vintage Real Estate Partners III (“VREP III”), valued at $3.4 billion.
Vintage Strategies within Goldman Sachs Alternatives provides liquidity solutions in the private market to both GP and LP clients. Goldman Sachs has been a long-standing leader in the secondary market since 1998, managing over $42 billion in assets as of March 31, 2024.
VREP III raised capital exceeding its initial target thanks to the engagement of a global and diverse group of institutional investors. VREP III is the largest fund ever established for secondary real estate market investments, surpassing its predecessor, VREP II, which raised $2.75 billion.
In May, Goldman Sachs Alternatives announced the closing of fundraising for its West Street Real Estate Credit Partners IV (“RECP IV”) fund and related entities, leveraging the firm’s decades of experience in real estate financing. RECP IV gathered over $7 billion in real estate credit capacity, including leverage. Combined with the capital raised by VREP III, Goldman Sachs Asset Management’s investment platform now has over $10 billion to be invested in the real estate market.
Harold Hope, Global Head of Vintage Strategies at Goldman Sachs Alternatives, said: “We believe the current market environment presents some of the most attractive opportunities for secondary real estate investments. As the largest fund ever focused on this segment, VREP III is well-positioned to capitalize on increasingly attractive opportunities in the market, where size is a significant competitive advantage. We are grateful to both our existing and new investors, whose support ensures our team has no limitations when executing transactions of any size.”
The successful fundraising reflects the recognition of the 25-year experience of the Vintage team, including 14 years of investing in the secondary real estate market, and underscores the attractiveness of current investment opportunities. Demand for liquidity solutions among LPs and GPs in private real estate funds remains high due to challenging exit environments that have significantly slowed asset liquidity in recent years. Additionally, rising interest rates have affected the availability of affordable financing, leading market participants to increasingly turn to the secondary market for alternative liquidity solutions.
“Demand for secondary real estate market investments among both LPs and GPs is at an all-time high, driven by turbulence in global real estate markets and a strong need for investment liquidity,” said Sean Brenan, who leads real estate investing at Vintage Strategies. “We believe pressure on real estate will continue shortly and hope that the capital raised will allow us to remain a partner for real estate market participants seeking innovative capital solutions to meet their liquidity needs.”
The Vintage team boasts extensive experience in executing both traditional secondary LP transactions and non-traditional solutions (e.g., continuation vehicles and portfolio financings) across various asset classes, along with the ability to leverage broader Goldman Sachs resources for sourcing, evaluating, and executing these investments.
Since the inception of the VREP strategy, the Vintage team has invested over $8.9 billion across 165 secondary real estate transactions. In 2023, the team estimated the value of secondary real estate market transactions at $56.8 billion.
