Goldman Sachs Alternatives has closed its latest real estate credit fund, West Street Real Estate Credit Partners IV. The fund, along with its related vehicles, will have more than $7 billion in lending capacity, including leverage.
The fund exceeded its target and is the firm's largest in the series to date, according to PERE data. Richard Spencer, chief investment officer of real estate credit at Goldman Sachs Alternatives, said the fund comes at a time when there is a big imbalance between supply and demand for real estate credit.
“We believe this creates attractive opportunities for alternative sources of lending that can offer borrowers scale and execution certainty,” Spencer added.
The firm said investors include newcomers as well as longtime participants who have increased their allocations to the strategy. Investors in the fund include sovereign wealth funds, insurance companies, and U.S. and international pension funds. Additionally, the firm has seen commitments from family offices, Goldman Sachs Private Wealth Management, and third-party wealth channels.
Jeff Fine, global co-head of alternative capital formation, noted that the firm's real estate credit offering has become an increasingly important investment destination for institutional and high-net-worth clients, as evidenced by the fund's expanding investor base and increased commitments from existing clients.
“For investors looking for attractive risk-adjusted returns across economic cycles, real estate credit is an excellent diversifier from private credit and real asset exposure,” Fine added.
To date, the fund has committed more than $1.8 billion across eight investments. Additionally, the fund will be the first in the series to provide disclosures under Article 8 of the European Sustainable Finance Disclosure Regulation.