Goldman Principal RE fund raises nearly $1bn

Goldman Sachs Principal Investment Area has raised $993 million for its third real estate debt fund, according to Real Estate Capital's sister title, Private Debt Investor.

Goldman Sachs Principal Investment Area has raised $993 million for its third real estate debt fund, according to Real Estate Capital’s sister title, Private Debt Investor.

Broad Street Real Estate Credit Partners III marked its first sale in March, according to a US Securities and Exchange Commission filing. The target amount was not disclosed. The firm declined to comment.

The New York-based investment bank’s Real Estate Credit Partners strategy targets senior and mezzanine loans backed by North American and European real estate, according to its website. Target investments range from $50 million to $150 million and finance acquisitions, refinancing and recapitalisations.

Broad Street II closed on its original fundraising target of $4.2 billion in 2014, PDI data shows. Limited partner commitments to the second fund included the Finnish companies Mandatum Life Insurance and Kaleva Mutual Insurance, the Chicago-based Coleman Foundation and the Arizona-based Ronald and Maxine Linde Foundation.

In July 2015, Goldman held a final close of the Broad Street Senior Credit Partners with $3.16 billion in total capital commitments. The vehicle originates senior secured loans to North American and European private equity firms and other private companies with $300 million to $5 billion of capital. The investments range from $250 million to over $600 million and provide capital for leveraged buyouts, recapitalisations, refinancings, acquisitions and restructurings.

The Wall Street Journal reported in December 2013 that Goldman renamed the real estate debt strategy after its former headquarters on 85 Broad Street in New York City, partly to minimise the impact of the new Volcker Rule, a part of the 2010 Dodd-Frank act, that limits the firm’s hedge fund activity.

Goldman Sachs Principal Investment Area is the corporate investment arm within the firm’s Merchant Banking Division. MBD has invested over $5 billion in real estate loans since 2008, the company’s website states. And since its founding in 1986, the MBD has invested in $55 billion through investment funds focused on mezzanine, senior secured, distressed and real estate debt overall.

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