StepStone Real Estate said that the move continues on its strategy shift since the Great Recession, where it went from focusing on passive restricted partner interest to more “control-oriented” secondaries and recaps that are led by general partners. Now, with a weakened fundraising market, caused mainly by elevated interest rates, the firm is looking to capitalize on the opportunity by providing the real estate sector with a liquidity boost.
“We believe the combination of value declines, historically low transaction volume, increased borrowing costs, and a slow fundraising environment has created unprecedented illiquidity across real estate markets,” Jeff Giller, partner and head of StepStone Real Estate, said in a statement.
“Our strategy—providing liquidity solutions to real estate vehicles and investors when traditional liquidity avenues are challenged—has proven resilient through all phases of the market cycle, and it’s especially compelling today.”
According to Brendan MacDonald, partner and chief operating officer of StepStone Real Estate, the company has spread roughly $17 billion annually through secondaries, primary investments, and co-investments.