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.