Goldman Sachs' Whitehall Funds has acquired almost 900 non-performing and sub-performing loans backed by Italian residential property, which had an original value of about €120m ($174m).
The bank told the Financial Times newspaper that it represented the first European debt investment for Whitehall since the beginning of the property slump, “marking the start of a new push into the distressed property market”.
Goldman Sachs did not reveal the price, but it is thought Whitehall acquired the loans at less than half the face value given the decline in property.
All of the loans were made between 2006 and 2007 by an Italian financial services company in administration, said the firm.
Goldman’s Real Estate Principal Investment Area (REPIA), which harbours the Whitehall opportunity fund series, has more than $6bn of capital for investing in real estate globally.
The bank said that the European deal underlined what is expected to be a renewed focus on distressed debt.
News of the investment comes in the same week as Edward Siskind, the co-head of REPIA based in London, was named new global head of the business.