Vistria Group’s Affordable Housing Fund Swells to $2.5 Billion

Vistria Group has amassed more than $2.5 billion in assets under management for its affordable housing real estate fund, signaling sustained investor interest in the asset class.

The fund, launched in 2023 and led by former Goldman Sachs executive Margaret Anadu, has already acquired over 7,000 units, the New York Times reported.

The milestone reflects a broader trend in real estate finance. Even as the private real estate industry emerges from its most difficult fundraising year in more than a decade, affordable housing continues to attract capital.

The fund’s backers include investment banks, family offices and insurance companies, indicating that institutional players increasingly view affordable housing as a viable, scalable investment.

Executives behind the fund said its appeal comes from its potential financial upside and the sheer size of the market. They pointed to the massive demand for affordable housing across the country and the difficulty of assembling enough capital in one place to compete at scale.

The fund has so far focused heavily on high-cost markets like California, where one of its recent standout deals included the conversion of nearly 700 market-rate apartments into affordable units.

Rising interest rates and limited housing supply have pushed prices to record highs, intensifying political and public pressure for solutions. Policymakers on both sides of the aisle are exploring zoning reforms and taxpayer subsidies to expand the availability of affordable units, creating incentives for firms like Vistria to scale up.

The fund is driven primarily by its commercial opportunity, rather than a mission-oriented focus, and the capital need in affordable housing is still in the trillions, Anadu said.

Meanwhile, the Department of Government Efficiency, led by billionaire Elon Musk, has canceled millions of dollars in affordable housing contracts across more than 1,000 communities.

The agency determined the cuts through an internal review targeting diversity, equity and inclusion language on grantee websites, affecting groups like Enterprise Community Partners and the Local Initiatives Support Corporation that helped administer Section 4 funding from the Department of Housing and Urban Development.

Across Vistria’s home state of Illinois, federal funding delays have put $52.5 million in grants for at least 15 affordable housing projects in jeopardy.

— Judah Duke