Goldman Sachs launches new real estate credit fund
Investment giant Goldman Sachs has launched a real estate credit fund, raising US$3.6 billion. The area is an alternative for the firm but has been actively developing in recent years.
The new fund attracted investors and raised the largest capital the firm has ever committed to such a venture. By comparison, the previous similar project raised US$2.6 billion.
What services the real estate credit fund provides
The real estate fund is extremely important in the context of modern changes. Many banks do not offer commercial property loans. As a result, landlords have to look for alternative sources of finance. High interest rates are complicating matters.
Richard Spencer of Goldman Sachs notes the market’s growing gap between supply and demand. We are primarily talking about debt financing for real estate. The company intends to take advantage of this dynamic.
The activities of the new fund include:
– processing first charge mortgages;
– securing funding for properties undergoing renovation or change of use;
– administering loans and monitoring the distribution of funds.
The fund plans to invest in the APAC property market, creating new opportunities for its participants. Goldman Sachs has previously invested in North American and European real estate. Spencer noted that the bank intends to focus on the Australian sector. The country is attractive because of its guarantees for lenders. There are also regulatory standards that reduce the risks of operating in the market.
Business overview
Goldman Sachs is one of the largest investment banks in the world. It has four divisions:
1. Investment Division, which is divided into financial advisory and underwriting businesses. This division generates approximately 21% of revenues and holds 10% of the firm’s assets.
2. Global Markets: Execution of stock market transactions for institutional clients. It is active on all the significant stock and commodity exchanges. This line accounts for approximately 47% of total revenues and 76% of assets.
3. Asset management. The bank works with large institutional and private investors. It accounts for 8% of assets and 18% of total revenues.
4. Private banking. The company offers loans, manages deposits, and provides financial advice. It accounts for 13% of total revenues and 9% of assets.
Goldman Sachs invests in shares of companies in various sectors. The largest share comes from the financial and technology industries. Apple, Microsoft and Amazon top the firm’s portfolio in terms of share price.