Quantitative Hedge Fund Withdraws From Commercial Real Estate After Failed Fundraise
Two Sigma Investments shut down new investment activity at its real estate unit and cut senior staff, including partner and chief investment officer Rich Gomel, two years after opening the business to outside investors. The quantitative hedge fund firm had targeted roughly $2 billion for the venture but raised less than half that amount. The firm will maintain a skeleton crew to manage existing properties but is no longer fundraising or deploying capital.
Two Sigma launched its real estate unit in 2019 with internal capital and opened it to outside investors in 2024 through its Real Estate Opportunity Fund, which concentrated on housing and industrial properties. The firm applied its quantitative data expertise to predict supply and demand patterns in commercial real estate markets. The Teacher Retirement System of Texas committed approximately $135 million across the main fund and a co-investment vehicle. Former Blackstone Vice Chairman Tom Hill, who served as chief executive of the business, departed in 2025.
Private real estate fundraising totaled just over $30 billion in the third quarter, the lowest quarterly figure since early 2013, according to PEI Group data. Higher interest rates have compressed property values and forced firms to extend hold periods, making capital commitments scarce across the sector. Two Sigma manages about $85 billion firmwide and has faced internal upheaval as its two founders remain locked in a prolonged dispute.
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