There are currently 393 private equity real estate funds in market seeking to raise an aggregate $127 billion. The number of funds in market has increased since Q1 2010, when 366 funds were targeting an aggregate $150 billion. The aggregate target sought by funds on the road has steadily decreased due to the tough economic conditions, with fund managers now setting lower fundraising targets.
The majority (55%) of private equity real estate funds on the road are primarily focused on investments in North America. 25% of funds will predominantly make investments in Asia and Rest of World, with Europe-focused funds accounting for the remaining 20%.
Of the 393 funds in market, 58% are being raised by fund managers headquartered in the US. 14% of funds in market are managed by UK-based firms, while firms based in France and Hong Kong each manage 3% of funds on the road.
The two largest funds currently in market are both managed by Lone Star and are each seeking to raise $4 billion. Lone Star Real Estate Fund II is an opportunistic vehicle targeting investments in a broad range of assets in commercial real estate. Lone Star Fund VII invests in distressed residential mortgages and defaulting corporate bonds and loans in Japan, Western Europe and North America. Other notable funds in market include Carlyle Realty Partners VI and Aberdeen European Shopping Property Fund, which are seeking to raise $3 billion and €1.5 billion respectively.
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