StepStone Real Estate has closed StepStone Real Estate Partners V, its fifth flagship fund dedicated to real estate secondaries. At $3.8 billion in primary commitments, it is the largest secondaries fund ever raised, according to the company.
Including co-investments completed and other vehicles raised to invest alongside the fund, the total investment program has a capacity exceeding $4.5 billion. SREP V was oversubscribed, and thus far has committed $1.7 billion in eight unnamed investments, with others currently in the works.
SREP V attracted sovereign wealth funds, insurance companies, pension funds and wealth management platforms, according to prepared statements from Partner & Head of EMEA Josh Cleveland. StepStone reported higher participation from North American institutions compared to prior vintages, along with increased commitments from investors in Europe, Asia, the Middle East, and Latin America.
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The fund dwarfs the most recent closings for such funds, and edges out Goldman Sachs’ Vintage Real Estate Partners III fund, which raised $3.4 billion and closed in early 2024. In that instance, Goldman Sachs outpaced itself, having raised $2.8 billion for a similar fund in 2020.
A combination of value declines, historically low transaction volume, increased borrowing costs, and a slow fundraising environment means illiquidity in real estate markets, said Partner & Head of StepStone Real Estate Jeff Giller in a prepared statement. The fund provides needed liquidity.
StepStone Real Estate is an arm of StepStone Group, which has some $179 billion of assets under management. The firm deployed more than $16 billion to real estate funds on average over the last three years, and otherwise invests in most property sectors, such as the $158 million recapitalization in early 2023 of a 1 million-square foot cold storage portfolio with Provender Partners.
Investment in real estate secondaries shrinks
Fundraising for investment in real estate secondaries dropped in 2024 to about $5 billion, down from about $8.8 billion in 2023, according to PERE data. It is a niche play: all together, funds specializing in real estate secondaries account for about 5.0 percent of real estate funds.
The aforementioned Goldman Sachs’ Vintage Real Estate Partners III fund closed in 2024, as did Brookfield Real Estate Secondaries Fund and NB Real Estate Secondary Opportunities Fund II, both of which totaled more than $1 billion. Previous to StepStone Real Estate Partners V, Ares Insurance RE Secondaries Fund I closed in 2025, though its total commitment hasn’t been released yet.
Among closed-end vehicles, secondaries funds had the second-highest fund average in 2024, PERE notes, at $1.6 billion. Only funds of funds had a higher average, at $2 billion.