Goldman Sachs Unleashes $3.4 Billion Fund To Exploit Real Estate Market Fluctuations

Goldman Sachs has raised $3.4 billion for its Vintage Real Estate Partners III fund, which specifically invests in shares of real estate funds. This capital will be used to purchase stakes in these funds, often involving owning parts of large property portfolios or development projects. 

The $3.4 billion pool is one of the biggest amounts of money aimed at buying shares in private real estate funds. It’s 23% more than the $2.75 billion Goldman Sachs raised for a similar fund in 2020. In May, Goldman Sachs raised $7 billion to lend to real estate investors and developers, as they believe this market does not have enough funding.

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According to The Wall Street Journal, it benefits from the fact that other investors and fund managers are facing cash shortages and need to sell their shares. This creates good opportunities for Goldman Sachs to buy these shares at potentially lower prices. 

Goldman's latest fundraising effort ended six months after competitors Blackstone and Ares Management raised funds focused on property investments. Late last year, Blackstone raised $2.6 billion for its real estate fund, its largest amount yet. Ares raised $3.3 billion for its real estate fund, just under its $3.5 billion goal.

Goldman Sachs says the money in its new fund can be used to buy shares of real estate funds from big investors and support deals where fund managers want to give all investors in a fund a chance to cash out at the same time so they don’t have to sell their assets at subpar prices.

According to the company, Goldman Sachs oversees more than $2.8 trillion in assets worldwide as of Dec. 31, 2023. Since its start in 1998, Goldman Sachs’ Vintage Strategies has become one of the largest secondary investors, investing over $70 billion.

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