Goldman Sachs Asset Management has raised a big pool of equity to buy up stakes in existing real estate funds.

The firm has raised $2.75B for Vintage Real Estate Partners II, its second dedicated “secondaries” fund, Private Equity Real Estate reported.

Secondaries investment is the purchase of units in existing funds from the original investors in a vehicle. Buyers might be able to pick up units at a discount from an investor looking for liquidity that needs to sell, or take a view that the returns for a fund may be higher than existing investors anticipate.

According to Landmark Partners, another investor in the space, secondaries transactions totalled $7.2B in 2019, a three-year high.

“When you invest in a real estate opportunities fund, they’re doing strategies that are much higher risk and return like development, repositioning and buying land,” Goldman Managing Director and Global Head of Private Equity Secondaries Harold Hope told PERE. “When you buy that fund on a secondary basis in year five, six or seven, it is a very different risk profile.”

He added that the coronavirus pandemic could throw up attractive opportunities.

Since the financial crisis, Goldman has shifted its real estate investment strategy away from raising big opportunity funds. It raises real estate funds in the secondaries sector and also for investment in real estate debt, where it raised $4.2B for Broad Street Real Estate Credit Partners III in 2018.

In terms of real estate equity, it uses its own balance sheet to make investments alongside joint venture partners. Earlier this month it completed the second largest real estate deal in UK history when alongside the Wellcome Trust it sold the iQ student accommodation company to Blackstone for £4.7B.