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Private Equity Real Estate Funds Closed in Q2 2009

by Andrew Moylan

  • 31 Jul 2009
  • RE

The second quarter of 2009 saw 21 real estate funds reach a final close, receiving aggregate equity commitments of USD 10.3 billion. This represented a fall from Q1 2009 fundraising, when USD 15.2 billion was raised by 27 funds, and is the lowest quarter in terms of private equity real estate fundraising since Q4 2004. Although it was a poor quarter for fundraising, there were still several significant private equity real estate funds which closed in Q2. These are examined in closer detail in the August edition of Real Estate Spotlight.

The largest fund to close in the quarter was Blackstone Real Estate Partners Europe III, which received total commitments of EUR 3.1 billion. The fund is the largest European private equity real estate fund ever and the seventh largest globally. The fund was responsible for over 40% of the aggregate capital raised in Q2, although it is important to note that much of its capital was raised before September last year. The fund focuses on over-leveraged traditional real estate bought at peak levels and aggressively financed. Investments the fund is pursuing include the creation of investment platforms, the acquisition of irreplaceable assets in prime locations and the expansion, renovation, development, and re-use of existing properties.

The largest US focused fund to close in Q2 was Rockwood Capital Real Estate Partners Fund VIII, which received commitments of USD 964 million. The value added fund focuses on hotel, retail, office and residential properties in supply constrained markets across the US. Other significant funds to close in the quarter included LBA Realty Fund IV, which raised USD 750 million in commitments. The core-plus and value added fund is focused on acquiring a diversified portfolio of office and industrial properties in the Western US. ICECAPITAL Real Estate Asset Management raised EUR 400 million for its ICECAPITAL Housing Fund II. The fund invests in new, privately financed and renovated rental apartment buildings in Finland.

Preqin’s Real Estate Online service has extensive information on real estate fund managers and fundraising on a global basis. Please click here for more information.

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