Vulture funds targeting distressed European property have fallen well short of their fundraising goals and are being left behind in the race to place cash in the market, an EG investigation has revealed.
The 34 funds surveyed had hoped to have £36bn of equity and debt to spend during the downturn.
However, just £12bn of the £20bn equity targeted has been raised, and funds have found it difficult to raise any debt at all as banks have sought to reduce their exposure to property.
Less than £2bn of the potential £36bn has been put to work, with the expected flood of distress sales from banks failing to appear.
“Lots of investors have come out saying they’re going to raise money but they haven’t been able to,” said Robert Hodges, managing director of fund manager Carlyle Group.
“Despite a massive dislocation in asset pricing and financial markets, there has not been the wave of distress sales that opportunity funds were hoping to take advantage of.”
London & Stamford, which raised £210m from the public markets, has been one of the few investors able to pull off a big-ticket deal, buying a 50% stake in Sheffield’s Meadowhall Shopping Centre.
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