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Historical Private Equity Real Estate Fundraising by North American Firms

by Andrew Herman

  • 16 Apr 2010
  • RE

The North American market is of significant importance to the private equity real estate industry, with 54% of funds in market, and 64% of funds closed in 2009, managed by firms headquartered in North America. In 2000, 40 funds managed by North American firms reached a final close, raising $14.7 billion in commitments. The years 2001-2003 were consistent years in terms of fundraising for North American firms, and by 2004 the market was showing signs of significant growth. In 2004, 91 funds reaching final closes raised $28.7 billion in commitments. The biggest growth year for the private equity real estate market was in 2005, when the 133 funds which closed gained commitments of more than double the previous year. The most successful fundraising year for North American firms came in 2008, when 145 funds raised $98.8 billion in commitments. The economic crisis had an adverse effect on fundraising in 2009, when 79 funds raised just $34.6 billion.

Recent quarters have been particularly poor in terms of fundraising by North American firms, with $8.8 billion raised in Q1 2010, and $5.1 billion raised in Q4 2009. The first three quarters of 2008 all exceeded $25 billion in commitments.

The average size of private equity real estate funds managed by firms headquartered in North America grew from $212 million in 2003 to a record $681 million in 2008. Fund managers struggled to gain commitments from investors during 2009, when the average fund size fell to $438 million, the lowest since 2005.

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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