StepStone Closes Fund III, Plans $1B+ in Investments

By Gail Kalinoski

Jeff Giller

New York—StepStone Real Estate has closed StepStone Real Estate Partners III with $700 million in commitments that together with co-investment capital will give the fund more than $1.1 billion to invest in the U.S. and Europe.

Founded by partners Jeff Giller, Josh Cleveland and Brendan MacDonald, StepStone Real Estate is part of StepStone Group, a leading private markets firm that oversees about $100 billion of private capital allocations, including $28 billion of assets under management.

The fund has a global investor base consisting of pension funds, foundations, insurance companies, funds of funds, family offices and high net worth individuals from the U.S., Europe, Asia, Middle East and Latin America. Investments will be made across product types including office, industrial, senior housing, student housing, hotels and multifamily.

“With SREP III, StepStone Real Estate intends to continue our strategy of providing bespoke capital solutions to managers and operators of institutional real estate portfolios to help them capitalize on new opportunities, generate liquidity for investors, or address capital requirements in their existing holdings,” Giller, partner and head of real estate at StepStone, said in a prepared statement.

Josh Cleveland

Cleveland, who oversees the firm’s activities in Europe, noted that SREP III has already completed eight investments and is currently 30 percent committed. Details were not provided on those investments.

“Our creative and flexible approach to working with institutional quality real estate investment managers has made us a partner of choice and is expected to continue to drive significant opportunities for the fund over SREP III’s investment period,” he said in prepared remarks.

StepStone said the fund’s strategy will be to invest in “special situations in the U.S. and Europe.” Those are expected to include fund wind-ups and recapitalizations of real estate portfolios, helping investors reduce exposure and achieve realizations. The firm provides custom capital solutions to managers and operators of institutional CRE portfolios.

SREP III is the first fund raised under the StepStone banner. The previous two funds, which raised an aggregate of $400 million, including co-investment commitments, were raised in 2010 and 2013 under the Clairvue banner before the team integrated Clairvue with StepStone to form StepStone Real Estate.

StepStone is a global firm with 14 offices in 10 countries. Some of its locations are New York, San Francisco, San Diego, Toronto, London, Zurich, Beijing, Hong Kong, Tokyo, Seoul and Sao Paulo.