2010 saw only 89 private equity real estate funds reach a final close, raising $35.8 billion, a 28% decline from the $49.8 billion raised in 2009. The average size of real estate funds that closed in 2010 was $443 million, an increase on the average size of $361 million from 2009.
The largest fund to close in 2010 was Brookfield Asset Management’s Real Estate Turnaround Consortium. The fund invests in the equity and debt of undervalued real estate companies or real estate portfolios where value can be created for stakeholders in a variety of ways, including financial and operational restructuring, strategic direction or sponsorship, portfolio repositioning, redevelopment or other active asset management. Morgan Stanley Real Estate Fund VII Global closed in Q1 2010 on $4.7 billion. The fund invests in the US, Western Europe and developed and emerging Asia. Fortress Investment Group raised $2.6 billion for Fortress Credit Opportunities Fund II, which makes opportunistic credit-related investments, while Beacon Capital Partners’ sixth value added vehicle raised $2.6 billion. Beacon Capital Strategic Partners VI focuses on the acquisition, development, and management of office properties in select supply-constrained markets, with an emphasis on knowledge-based economies.
Starwood Capital Group closed two funds in 2010, raising $1.8 billion for Starwood Global Opportunity Fund VIII and $965 million for Starwood Capital Global Hospitality Fund II. TA Associates Realty secured commitments of $1.7 billion for its latest fund, TA Realty Associates IX, which primarily makes core-plus and value added investments in office, industrial, multifamily and retail properties.
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