Fundraising for closed-end private real estate funds fell by 40% globally, year-on-year, to $15.5bn (£12.4bn) in the first quarter of 2017, according to Preqin’s Q1 fundraising update.
Although Preqin said it expected the number to rise about 10% to about $17bn as more information comes through, it still represents the slowest quarter since Q1 2013 when the market raised $10bn.
Funds have continued to favour non-core strategies, with value-add funds accounting for nearly half of the capital raised at $6.9bn. Opportunistic funds raised a further $4bn in the quarter.
The number of funds in the market has grown from 533 to 554 in the past quarter, although the total capital targeted has stayed steady at $189bn, implying a small decrease in average fund size.
Despite the slow start, the report said that activity in 2017 could match 2016 if the multi-billion funds raising capital close before the end of the year. At the moment, seven of the 10 biggest funds have already had interim closes.
In total, closed-end private real estate dry powder has risen by 63% from $150bn in 2010 to $245bn in March 2017.
Largest closed-end private real estate funds in market (as at 3rd April 2017) |
||||||
| Fund | Firm | Target size (€m) | Status | Primary strategy | Geographic focus | Firm headquarters |
| Blackstone Real Estate Partners Europe V | Blackstone Group | 7,000 EUR | Fifth close | Opportunistic | Europe | US |
| Starwood Global Opportunity Fund XI | Starwood Capital Group | 6,000 USD | First close | Opportunistic | US, Europe | US |
| Carlyle Realty Partners VIII | Carlyle Group | 5,000 USD | Raising | Opportunistic | US | US |
| Oaktree Real Estate Opportunities Fund VII | Oaktree Capital Management | 3,500 USD | Fifth close | Distressed | Global | US |
| PIMCO Bravo Fund III | PIMCO | 3,500 USD | Third close | Opportunistic | Global | US |
| Colony Distressed Credit & Special Situations Fund IV | Colony NorthStar | 2,500 USD | Second close | Debt | US, West Europe | US |
| Brookfield Real Estate Finance Fund V | Brookfield Property Group | 2,000 USD | Raising | Debt | US | Canada |
| Kildare European Partners II | Kildare Partners | 2,000 USD | First close | Debt | Europe | UK |
| Landmark Real Estate Fund VIII | Landmark Partners | 2,000 USD | Raising | Secondaries | Global | US |
| Oaktree Real Estate Debt Fund II | Oaktree Capital Management | 1,750 USD | Second close | Debt | Global | US |
Largest closed-end private real estate funds closed in Q1 2017 |
|||||
Fund |
Firm |
Fund size (mn) |
Primary strategy |
Geographic focus |
Firm headquarters |
| Cerberus Institutional Real Estate Partners IV | Cerberus Real Estate Capital Management | 1,800 USD | Distressed | US, West Europe | US |
| Orion European Real Estate Fund V | Orion Capital Managers | 1,500 EUR | Opportunistic | West Europe | UK |
| DRA Growth & Income Fund IX | DRA Advisors | 1,500 USD | Value Added | US | US |
| Greystar Equity Partners IX | Greystar Real Estate Partners | 1,250 USD | Value Added | US | US |
| Rockwood Capital Real Estate Partners Fund X | Rockwood Capital | 1,100 USD | Value Added | US | US |
| Wheelock Street Real Estate Fund V | Wheelock Street Capital | 725 USD | Opportunistic | US | US |
| StepStone Real Estate Partners III | StepStone Group Real Estate | 700 USD | Secondaries | US, West Europe | US |
| Rubenstein Properties Fund III | Rubenstein Partners | 565 USD | Value Added | US | US |
| Mapletree Global Student Accommodation Private Trust | Mapletree Investments | 535 USD | Core-Plus | US, UK | Singapore |
| Asana Partners Fund I | Asana Partners | 500 USD | Value Added | US | US |
To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @ktomusk or @estatesgazette
