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Historical Fundraising by Private Equity Real Estate Funds

by Andrew Moylan

  • 29 Mar 2010
  • RE

The private equity real estate fundraising market has seen significant growth in the past decade. In 2000, 50 funds reached a final close raising an aggregate $19 billion in commitments. By 2004 the number of funds to close had more than doubled, with 135 funds reaching a final close, raising $37.4 billion. In 2006, $100 billion was raised by 254 funds and $124 billion was raised by 279 funds in 2007. The following year saw the amount of capital raised increase to $136 billion, but the number of funds to close fell to 233. Fundraising declined dramatically in 2009, as a result of investor caution and inactivity. 117 funds reached a final close, receiving aggregate commitments of $47 billion.

Recent quarters have been particularly poor for private equity real estate fundraising, with just $9 billion raised in Q4 2009 and $8 billion in Q3 2009. At the height of private equity real estate fundraising, in the second and third quarters of 2008, fund managers raised $40 billion and $42 billion raised respectively.

The average size of private equity real estate funds grew from $174 million in 2003 to $583 million in 2008, as a result of the booming fundraising market. Fund managers struggled to reach their targets in 2009, however, and the average fund size fell to $405 million.

Preqin’s Real Estate Online service now features charts showing annual and quarterly private equity real estate fundraising. These can be customized by geographic focus, manager location and fund type.

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