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Goldman Sachs aims to capitalize on this “growing supply-and-demand gap for real estate debt financing,” according to Richard Spencer, chief investment officer for real estate credit at Goldman Sachs Alternatives.
In addition to the $3.6 billion raised from external investors, Goldman is investing $1.4 billion of its own capital alongside the fund. When combined with around $2 billion in leverage, the vehicle will have over $7 billion in lending capacity, according to Bloomberg, citing people familiar with the matter.
The fund targets returns of 10-12% after fees and will focus on originating and holding first-lien mortgages secured by “transitional” properties undergoing changes like refurbishment or development. It will also provide mezzanine financing for leased stabilized assets.
While the previous fund focused on North America and Europe, the new one will have a broader reach, including OECD countries in the Asia-Pacific region. Australia is an area of focus due to the country’s “strong creditor protections and pressure on traditional lenders to reduce risk.”
