Goldman Sachs Group has formed a strategic partnership with Cadre, an online investment and research service for commercial real estate, giving the bank’s clients a cheaper alternative to traditional private equity funds.
The partnership was cemented today with the close of a $250 million commitment from Goldman’s private wealth clients. Cadre, backed by Goldman and venture funds including Andreessen Horowitz and Breyer Capital, was founded to provide direct access to commercial real estate deals and with full transparency into the holdings. Cadre’s investment team will build portfolios for the clients.
Ryan Williams, chief executive officer and co-founder of Cadre, says the firm addresses investors’ concerns about funds that charge high fees, have inherent conflicts of interest and don’t provide ready access to detailed information on underlying investments, including current values and esoteric data like rent rolls of commercial buildings. Cadre provides access to commercial real estate strategies with longer durations, which Goldman does not offer clients.
“I was at an LP conference three and a half years ago and I heard concerns about the fund model, including opacity, high fees, a lack of liquidity, true client service and transparency,” Williams said. So-called LPs, or limited partners, are the investors who contribute to private equity funds.
Williams co-founded Cadre in 2014 with Jared Kushner, who works in President Donald Trump’s administration, and Joshua Kushner. Williams and Joshua Kushner met at Harvard.
Williams has a long history as an entrepreneur, founding a sports apparel company as a teenager. He used the profits from the sale of the company to found a number of ventures, including an online real estate company for buying foreclosed homes in 2008 and 2009.
Williams previously worked at Blackstone Group’s real estate private equity group, and before that, he was an investment banker in Goldman’s technology group. The Cadre co-founder expects Goldman’s private wealth clients to add to their $250 million commitment over time, helping his firm expand beyond its focus on commercial real estate.
In 2017, Cadre completed more than $1 billion of transactions and closed a Series C financing round that includes Andreesen Horowitz, the Ford Foundation, real estate firm S.L. Green Realty Corp. and Peter Thiel’s Founders Fund. Cadre initially appealed to large family offices and high-net-worth investors, but is now seeking institutional partners such as Goldman. Williams said he expects to add other investment banks as well.
Cadre offers market and investment detail that funds do not, including property value trends, diligence and track records on real estate operators, market information, new supply, the price that managers have paid for properties, and insurance and tax information.
“We’re providing transparency and clarity that hasn’t been the norm in the institutional investing world,” Williams said.