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Industrial-Focused Private Equity Real Estate Fundraising

by Farhaz Miah

  • 26 Aug 2011
  • RE

At present, there are eight solely industrial-focused private equity real estate funds in market, seeking to raise $1.8bn in aggregate commitments. Of these funds, three have already held at least one interim close, raising a total of $300mn in equity towards their targets.

There are currently five US-focused industrial property orientated funds in market, seeking an aggregate $1.3bn in total commitments. CAM Industrial Value Fund 2, managed by Cohen Asset Management, is a US-focused value added industrial fund in market seeking to raise $300mn in capital.

Two of the industrial-focused funds currently in market are targeting primarily European-based markets. Light Industrial Building Fund, managed by Bank of London and The Middle East. The Sharia-compliant value added vehicle is seeking to raise £75mn in order to invest in sustainable light industrial property assets throughout the United Kingdom.

Of the funds in market, there is a single Asia and Rest of World-focused industrial real estate fund currently raising capital. PLA Industrial IV, managed by Pramerica Real Estate Investors, is an opportunistic Brazil-focused industrial fund that is seeking to raise $350mn from investors. The fund specifically focuses on the Brazil Industrial Triangle, an area in the southeast of the country that includes Rio De Janeiro, Sao Paolo and Belo Horizonte.

Between 2005 and 2011 YTD, 34 solely industrial-focused funds have held a final close, raising $9.3bn in aggregate commitments from investors. 17 US-focused industrial funds raised $3.9bn in equity commitments, while nine Europe-focused funds accrued $1.2bn in equity commitments. Over the same period, eight Asia and Rest of World-focused industrial real estate funds accumulated $4.2bn in total fund commitments.

In 2007 alone, eight industrial real estate funds reached a final close, raising $1.6bn in aggregate commitments. The amount of capital raised in this year was higher than the $800mn in commitments raised by the five industrial real estate funds that closed in 2006. However, in 2008, there was a significant decline in both the amount of capital raised and the number of funds reaching a final close in comparison to previous years, as only three industrial funds closed raising an aggregate $700mn in commitments. This demonstrated the adverse impact that the financial crisis had on the fundraising environment. By 2009, there was a slight improvement in fundraising conditions, as four industrial-focused funds closed, raising an aggregate $1.3bn. In 2010, three industrial real estate funds closed, raising an aggregate $800mn. So far in 2011, three industrial real estate funds have closed, raising an aggregate $800mn.

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