Key Takeaways
- • Two Sigma Investments has halted fundraising and new investments at its real estate division after the business fell short of its $2bn fundraising target, according to Bloomberg.
- • The New York-based firm, which manages approximately $85bn in assets, raised less than half its target after opening its Real Estate Opportunity Fund to external investors in 2024.
- • Rich Gomel, partner and chief investment officer of the real estate unit, is leaving alongside several senior colleagues, including two of the division's three remaining partners and one of its two heads of data science.
- • A reduced team will manage the existing portfolio, while the firm has suspended further capital raising and acquisitions.
- • Private real estate fundraising totalled just over $30bn in the third quarter, its lowest quarterly level since early 2013, per PEI Group data.
Summary
Two Sigma Investments has halted fundraising and new investments at its real estate division and cut several senior executives after the unit failed to reach its $2bn fundraising target, according to a report by Bloomberg. The New York-based firm, which manages approximately $85bn in assets, launched its real estate strategy to external investors in 2024 but raised less than half of its goal amid difficult conditions for private property investment.
Rich Gomel, partner and chief investment officer of the real estate unit, is leaving along with several senior colleagues, including two of the division's three remaining partners and one of its two heads of data science, according to people familiar with the matter. A reduced team will remain in place to manage the unit's existing portfolio, while the firm has suspended plans for further capital raising and new acquisitions.
The retrenchment comes amid a prolonged slowdown in commercial real estate fundraising. Elevated interest rates have weighed on property valuations and extended holding periods for existing investments. According to PEI Group data, private real estate fundraising totalled just over $30bn in the third quarter, its lowest quarterly level since early 2013.
Two Sigma began developing its real estate operation in 2019, initially deploying internal capital before opening its Real Estate Opportunity Fund to external investors in 2024. The strategy focused primarily on residential and industrial properties, with selective exposure to hospitality and office assets, and sought to apply the firm's quantitative expertise and proprietary data analytics, using predictive models to assess supply, demand and investment opportunities. Among its investors was the Teacher Retirement System of Texas, which committed approximately $75m to the main fund and a further $60m through a co-investment strategy last year.
Former Blackstone vice chairman Tom Hill, who joined Two Sigma full-time in 2021 to lead its private investment business, previously served as chief executive of the real estate operation before departing in 2025. The move adds to a period of organisational challenges at Two Sigma, which has also faced tensions between its co-founders in recent years.
Rich Gomel, partner and chief investment officer of the real estate unit, is leaving along with several senior colleagues, including two of the division's three remaining partners and one of its two heads of data science, according to people familiar with the matter. A reduced team will remain in place to manage the unit's existing portfolio, while the firm has suspended plans for further capital raising and new acquisitions.
The retrenchment comes amid a prolonged slowdown in commercial real estate fundraising. Elevated interest rates have weighed on property valuations and extended holding periods for existing investments. According to PEI Group data, private real estate fundraising totalled just over $30bn in the third quarter, its lowest quarterly level since early 2013.
Two Sigma began developing its real estate operation in 2019, initially deploying internal capital before opening its Real Estate Opportunity Fund to external investors in 2024. The strategy focused primarily on residential and industrial properties, with selective exposure to hospitality and office assets, and sought to apply the firm's quantitative expertise and proprietary data analytics, using predictive models to assess supply, demand and investment opportunities. Among its investors was the Teacher Retirement System of Texas, which committed approximately $75m to the main fund and a further $60m through a co-investment strategy last year.
Former Blackstone vice chairman Tom Hill, who joined Two Sigma full-time in 2021 to lead its private investment business, previously served as chief executive of the real estate operation before departing in 2025. The move adds to a period of organisational challenges at Two Sigma, which has also faced tensions between its co-founders in recent years.
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