Private Equity Real Estate Funds - Q3 2012 Fundraising Update

by John Mather

  • 23 Oct 2012
  • RE

Preqin Investor Network currently tracks 468 private equity real estate funds (targeting assets rather than other funds) seeking an aggregate of $154bn in capital commitments. According to the Preqin Quarterly: Real Estate, Q3 2012, the number of funds that are on the road today is a slight increase compared to the previous quarter, and continues the slow increase in funds in the market since the start of the year. The aggregate target size of funds on the road has also decreased by $7bn during Q3 2012. Since Q1 2009, the number of funds on the road has increased from 381 to 468, but the aggregate target of funds on the road has fallen considerably from $228bn to $154bn. This marks a sizable drop in the average target fund size for private real estate funds on the road, and demonstrates the caution fund managers have about going to market with ambitious target sizes in the current fundraising climate.

Indeed in such a climate, institutions continue to invest in more established private real estate markets such as North America, which is reflected in recent fundraising statistics. North America-focused funds have dominated fundraising activity in Q3 2012, with 12 funds focused on the region raising an aggregate $4.2bn. Preqin Investor Network data shows that of the 468 real estate funds seeking capital, 263 have a focus on North America. The top six largest funds in terms of target size currently seeking capital all include North American investments as part of their geographic focus. The largest is Blackstone Real Estate Debt Strategies II, which employs a debt strategy and is seeking $4bn to invest in office, hotel, retail and industrial opportunities within the UK and the US. This is followed by Brookfield Strategic Real Estate Partners, targeting $3.5bn to invest opportunistically in North America, Europe and worldwide.

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