Blog

Fundraising by UK –Headquartered Private Real Estate Fund Managers

by Carla Henry

  • 16 Mar 2012
  • RE

As of March 2012, there are 194 private equity real estate fund managers that are headquartered in the UK. These firms have raised an aggregate $56.7bn through private real estate funds in the past 10 years.

The years between 2006 and 2009 saw the highest fundraising levels for UK-based funds, with 2008 being the most successful year in terms of capital raised by UK-based firms; a total of 36 vehicles closed having raised $16.5bn in equity from investors. In comparison, during 2005, 15 funds secured $5.8bn in capital, rising to $9.8bn from 35 funds in 2006. Despite this, however, the economic downturn led to a decline in fundraising in 2009, when $6.8bn was gathered by 19 funds during this period. In 2010 fundraising for UK-based firms was at its lowest, with just 11 funds closing during this period raising a total of $3bn in capital from investors. The number of funds successfully closing in 2011 increased slightly, as demonstrated by 11 funds securing a total of $4.3bn in commitments during that year.

MGPA Asia Fund III was the largest fund managed by a firm based in the UK to close in the past 10 years, having done so in 2008 after securing $3.8bn in commitments from investors. The firm has closed five private real estate funds in the period, garnering a total of $7.3bn. Another major firm headquartered in the UK is Henderson Global Investors - Property, which alongside several open-ended vehicles has also raised $5.2bn from closed-end private real estate funds during the past decade. Grosvenor is another example of a UK-headquartered firm that has raised significant amounts of capital from investors in the last decade, securing $2.1bn in commitments for closed-end private real estate funds during the period.

What is the fundraising outlook for UK-based private real estate firms? There are currently 45 real estate funds in market being raised by UK-headquartered firms, seeking an aggregate $15.1bn in capital. The largest fund currently in market is Grosvenor Office Partnership Australia, seeking to raise AUD 750mn in commitments. Managed by Grosvenor, it is a club fund targeting office properties throughout Australia. MGPA Europe Fund IV, managed by MGPA is the second largest fund in market, with a target size of $750mn. It is seeking to target a diverse range of properties throughout the UK, France, Germany and Poland, taking advantage of current market dislocations and recapitalisations.

Continue browsing industry reports, publications, conferences, blogs and more on Preqin Insights