Private equity real estate funds of funds play an important role in the private real estate market as a whole, acting as key investors for fund managers and allowing smaller institutions, which lack the capital or resources to construct their own fund portfolios, to gain real estate exposure diversified by strategy, geography and property type.
The industry remained relatively small in 2005, when six funds of funds reached a final close, raising aggregate commitments of $0.5 billion. Fundraising increased significantly in the following years, however. 13 funds of funds raised $3.1 billion in 2006 and 16 funds of funds raised $4.6 billion in 2007, the most successful year ever in terms of fundraising. 2008 saw 17 funds close with aggregate commitments of $4.1 billion. Fundraising for funds of funds declined significantly in 2009, in line with the entire private equity real estate market, with 10 funds raising $1.7 billion.
The 2010 Preqin Private Equity Real Estate Fund of Funds Review includes detailed analysis, listings and profiles on fund managers, fundraising, fund terms and conditions, fund performance, institutional investors in funds of funds and funds of funds acting as investment consultants.