Goldman Sachs has raised the market’s largest dedicated fund focusing on real estate secondaries amid what it says is an all-time high for liquidity needs in the asset class.

The New York-headquartered firm said on Wednesday it had raised $3.4 billion for Vintage Real Estate Partners III. The fund is $100 million larger than Ares Management’s Landmark Real Estate Partners VIII and IX vehicles, which both amassed $3.3 billion and were the previous record-holders.

It is also 21 percent larger than its own predecessor, which closed on $2.8 billion in 2020.

The current market environment represents one of the most compelling deployment opportunities Goldman Sachs Alternatives has ever seen in real estate secondaries, Harold Hope, global head of the group’s Vintage Strategies, said in a statement about the fund close.

The vehicle will focus on both LP fund stakes and GP-led situations, according to the statement. GSAM said the fund closed above its target, which was undisclosed.

Secondaries trading in real estate took a dip last year from the record high of 2022 amid a backdrop of higher-for-longer interest rates and a correction in valuations in the asset class. Deal volume for the asset class fell 21 percent to $9.8 billion last year, from the record $12.4 billion the prior year, according to data from Ares shared with affiliate title Secondaries Investor in February.

With interest rates persistently high and a broad correction of real estate values, both investors and managers now have a greater pent-up need to generate liquidity, as Secondaries Investor and PERE have reported. Ares, for its part, estimates there is more than $970 billion in net asset value held in closed-end real estate funds, and that $180 billion of this is held in funds older than eight years. Outside of funds, there is more than $1 trillion of NAV held in non-fund structures such as joint ventures and separate accounts.

– Judi Seebus contributed to this report.