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Private Real Estate Debt Fundraising

by Jonathan Ma

  • 18 Nov 2011
  • RE

There are currently 124 private real estate debt funds in market seeking to raise an aggregate of $44.7bn from investors. Of these funds, 32 have reached at least one interim close, raising a total of $11.9bn towards their respective targets.

There are currently 99 North America-focused real estate debt funds in market, 12 Europe-focused funds and 13 vehicles focusing on investment in the Asia and Rest of World region. Of the 124 private real estate funds currently in market, 25 adopt a debt-only strategy, with the remainder making both debt and equity investments. The largest fund making debt investments currently in the fundraising market is Starwood Distressed Opportunity Fund IX, which has a target of $2.5bn. Adopting a strategy that includes debt, distressed and opportunistic approaches, it targets properties in the global market, most notably in the US, Europe, Brazil and India.

Over the last five years, 203 funds adopting a debt strategy have closed, raising an aggregate $115.7bn. 165 of these funds were US-focused, 22 funds were Europe-focused, with the remaining 16 vehicles targeting Asia and Rest of World. The largest debt-focused private real estate fund to close since 2006 is Lone Star Fund VI, which closed on $7.5bn in July 2008. The vehicle is particularly interested in markets in the US, Japan and Germany and targeted distressed loans and securities.

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