Around 450 private real estate funds in market are seeking to raise a collective $162bn. The geographic dispersion of these funds’ managers demonstrates the dominance of the North American private real estate industry which accounts for both 60% of the number of funds in market and 60% of the total capital sought by fund managers throughout the globe.
North America-based real estate firms have 271 funds looking to raise an aggregate $98.4bn, followed by 118 funds sponsored by Europe-based real estate fund managers that are in market targeting $45.9bn. Asia-based firms have 33 funds in market seeking an aggregate $10.4bn. There are 10 closed-end private real estate vehicles launched by Latin America-based firms that are targeting a total of $2.8bn, with eight Africa-based firms seeking $1.4bn. Six funds being raised by fund managers located in Australasia are seeking $1.6bn, with four funds sponsored by Middle East & Israel-based firms looking to raise $1.4bn.
Blackstone Real Estate Partners Asia is the largest fund currently in market. The fund will focus on opportunistic investments across a diverse range of property types throughout the Asia-Pacific region. The vehicle is targeting a total of $4bn and it held a first close in June 2013, raising $1.5bn. Another notable opportunistic real estate fund in market is the $3.5bn Brookfield Strategic Real Estate Partners vehicle, which seeks to invest across a range of property types throughout North America, Europe, Brazil and Australia. The fund is expected to reach a final close at the end of July 2013.
In the period between January-May 2013, around 34 funds managed by North American firms reached a final close raising an aggregate $16.7bn. In the same period, there were three vehicles sponsored by managers based in Europe that achieved a final close, raising a total of $700mn, while Asia-based managers closed four private real estate funds which collectively accumulated $500mn.
The most notable fund to close in this period was the $5bn debt, distressed and opportunistic, Lone Star Fund VIII, managed by Lone Star Funds. This global fund primarily targets non-performing and sub-performing single-family residential real estate debt, corporate debt, and also consumer debt.