Goldman Sachs’ urban fund could move into third party investments

GSLM Capital Partners, the urban investment fund set up by Goldman Sachs’ Urban Investment Group and construction firm L&M Development, refuses to rule out future third party fund management as it unveils its mission to help turn around underserved communities.

The urban investment fund set up by Goldman Sachs and construction firm L&M Development to invest in housing projects in underserved communities is not ruling out venturing into real estate fund management in the future.

GSLM Capital Partners was launched last week with plans to initially invest up to $100 million (€65 million) of Goldman Sachs’ own capital in housing communities in New York, San Francisco and Los Angeles.

However speaking to PERE, GSLM president Larry Florin said the fund would not rule out such an option in the future, if the project proves successful. “We are certainly not going to preclude, if this goes well, which we think it will, from doing this as a third party investment group,” he said.

GSLM builds on the activities of Goldman Sachs’ urban investment group, which provides long-term capital investment for firms operated or owned by ethnic minorities and real estate developers targeting urban communities.

At the time of GSLM’s launch, Alicia Glen, managing director of Goldman’s urban investment group, said the new fund would provide “catalytic investments in underserved and transitioning neighborhoods.”

Florin – former deputy mayor of San Francisco – said GSLM had a “comfort level” of dealing with the public sector through the experiences of L&M and former public sector professionals such as himself. “We have a level of expertise in dealing with public agencies that other private developers might not have. All real estate is local.”

The fund has been active in New York, particularly in Harlem, the Bronx and Brooklyn, he said. It is also starting to look to Newark and Jersey City in New Jersey, as well as Boston and Washington DC. A recent development by GSLM is the environmentally-friendly 249-unit Kalahari condominium development on 116th Street, in Harlem, which is slated for occupation later this year.