StepStone Real Estate has closed its fifth flagship fund targeting secondaries and recapitalizations. Through the pool, StepStone Group's real estate arm raised more than $4.5 billion, with the unit noting that the fund was "significantly oversubscribed," which highlights there was strong investment demand for it despite tough market conditions persisting. Of that amount, $3.77 billion came from primary commitments.
The investors included pension funds, wealth management platforms, and sovereign wealth funds.
Already, the pool, known as StepStone Real Estate Partners V (SREP V), has made eight investments, totaling $1.7 billion, with most of the transactions in the closing stage.
Recommended For You
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.
"This level of engagement gives us a distinct vantage point in the market—and a strong edge in deal sourcing and diligence," he said.
Latham & Watkins LLP advised on the creation of SREP V, while placement agent services were provided by Threadmark Partners Ltd.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
