Goldman Sachs Closes CRE Credit Fund with $4B
- May 08, 2014
Goldman Sachs has closed its second real estate credit fund, Broad Street Credit Partners II, with more than $4 billion to invest in loans in Europe and the United States.
Limited partners in RECAP II include new and existing institutional and private investors from the Americas, Europe and Asia. Bloomberg is reporting that the New York-based firm raised $1.8 billion from institutional and high-net-worth investors, $1.8 billion in borrowings and contributed the remaining $600 million. U.S. investors gave the most, followed by Europeans and a small amount came from Asian investors, according to Bloomberg.
The fund will be managed by the real estate group within Goldman Sachs’ Merchant Banking Division. It will make senior and mezzanine loans collateralized by high-quality real estate assets for acquisitions, refinancings and recapitalizations throughout the U.S. and Europe.
“RECAP II will build upon the strong performance of our first fund, which invested over $3.5 billion in high quality loans, and our team’s proven track record in creating solutions on complex transactions,” Alan Kava, co-head of MBD’s real estate investing group, said in a news release.
MBD is the primary area for Goldman Sachs’ long-term principal investing activity. Founded more than 25 years ago, it has raised more than $125 billion for investment in corporate, real estate and infrastructure strategies. The first RECAP II fund closed in November. It has invested about $500 million in five deals, including a mezzanine loan used toward acquisition of several Southern California office buildings and a senior loan for a New York City apartment building’s conversion from rental to for-sale condominiums, according to Bloomberg.
“The flexibility to invest across the capital structure and against all major asset classes is a distinct competitive advantage in creating unique financing solutions for our borrowers,” Peter Weidman, the managing director who oversees RECAP II for MBD, said in the release. “Since our first closing we have already invested over $500 million and we continue to see an attractive pipeline of investment opportunities in both the U.S. and Europe.”
Jim Garman, the London-based co-head of MBD’s real estate investing group, said extending the fund to the firm’s European platform would allow the group to build on its history of investments in the region.
“The size of our capital pool combined with the depth of our local real estate knowledge allows us to provide borrowers with customized loan structures on large, complex transactions with speed and certainty of execution,” Garman said in the release.