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Private Real Estate Fund Managers in Market - May 2013

by Karun Ahluwalia

  • 24 May 2013
  • RE

There has been considerable growth in the number of active private real estate fund managers in recent years, despite the tough fundraising environment. For the 2013 Preqin Investor Network Global Alternatives Report, Preqin identified more than 1,700 private real estate firms globally, including managers of both closed- and open-ended funds. As of April 2013, there were 386 fund managers managing closed-end vehicles currently in market. This figure includes both experienced managers and those raising their first fund.

In terms of managers of closed-end private real estate funds that are currently in market, North America is the base for the majority (61%). Europe is the second most significant region for managers in market, with 26% headquartered in the region. Of the remaining firms raising capital, 8% are based in Asia and 5% are located in regions outside North America, Europe and Asia.

New York and London are the two most significant areas for private real estate fund managers in market, with 62 and 44 managers headquartered in these cities respectively. US cities account for seven of the top 10 locations for headquarters of private real estate firms managing closed-end funds in market, with London, Toronto and Paris making up the remainder. Interestingly, the top 10 metropolitan areas account for 61% of total capital sought by fund managers marketing private real estate funds to investors.

The majority (61%) of private real estate firms managing closed-end funds currently in market have managed one fund or more previously. Thirteen percent of active private real estate fund managers have raised six funds or more previously, demonstrating an established track record. While some investors might prefer to invest in funds operated by more experienced fund managers with a more extensive track record available to review, other investors look to tap into the more favourable fund terms they are likely to obtain when committing to less experienced managers. Thirty-nine percent of private real estate firms managing closed-end funds in market are currently raising their first fund.

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