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Private Equity Real Estate Fundraising Improves Significantly in Q2 2013 – July 2013

by Forena Akthar

  • 03 Jul 2013
  • RE

Thirty-three closed-end private real estate funds held final closes in Q2 2013, raising an aggregate $17.3bn, a 188% increase on the $6.0bn raised in Q1 2013. Preqin anticipates the latest quarterly figures improving slightly (10-20%) as more information becomes available. Funds that closed in H1 2013 spent an average of 18.7 months in market, a small decrease from the average of 19.2 months taken by funds that closed in 2012, and a significant increase on the average of 9.2 months that funds closed in 2007 spent in market.

North America raised the most capital; 26 such funds received aggregate commitments of $15.3bn. Three Europe-focused funds raised $0.8bn, while four Asia-focused funds also raised $1.2bn. Lone Star Funds raised $5bn for Lone Star Fund VIII, the largest fund to close in the quarter, while Starwood Capital Group raised $4.2bn for Starwood Distressed Opportunity Fund IX. In addition to funds holding final closes, 51 vehicles held interim closes in the quarter, raising $16.1bn towards their fundraising targets, demonstrating increasing momentum in the fundraising market.

There are currently 446 private real estate funds in market, targeting aggregate commitments of $168bn. Though the number of funds in market has increased by only 12 vehicles from the previous quarter, the aggregate target of funds on the road has increased by $12bn. With regards to current investor sentiment, 53% of private real estate investors plan to make commitments to the asset class in 2013, compared to 36% of investors which intended to make real estate investments in 2012 when interviewed in December 2011.

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