Goldman Sachs Real Estate Principal Investment Area (REPIA) marked the value of its global real estate portfolio down by just $66 million to the end of September, bringing to an end a series of large, successive quarterly write-downs.
As a result, the value of its stake in REPIA’s assets under management was recorded at $1.75 billion.
The platform, led by global head Ed Siskind, recorded a write-down of $499 million in the second quarter this year, a write-down of $640 million in the first quarter this year and a write-down of $961 million in the last quarter of last year.
Siskind described the sequence to PERE as proof of “stabilisation” in the sector following a period of “pain”.
He said: “As a mark to market institution we took a lot of pain early on our real estate portfolio, and we are now beginning to see signs of stabilisation. This is a positive backdrop as we continue to look at opportunities to invest the $6bn of dry powder we have available.”
Within Goldman Sachs’ wider Principal Investments division, real estate remained one of the only loss-making asset classes when the investment bank reported its earnings for the quarter yesterday.
The bank said the division had recorded net revenues of $1.26 billion for the quarter, including a gain of $977 million on corporate principle investments and $344 million from its investment in the shares of Industrial and Commercial Bank of China.
Overall Goldman Sachs reported total net revenues for the quarter of $3.19 billion, resulting in diluted earnings per common share of $5.25.
REPIA typically invests both directly from its balance sheet and through third party comingled funds in which it contributes a significant proportion of the equity. Since the division’s inception in 1991, Goldman Sachs has committed approximately $9 billion of firm and personal capital to REPIA funds.
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