Preqin’s Real Estate Online contains detailed information on the 500 private real estate funds in market that are seeking to raise $180bn in aggregate capital. North America-based real estate firms have the most private real estate funds in market: 324 funds are targeting $121bn in capital commitments. This is followed by Europe-based firms’ 92 funds in market seeking $36bn, while 52 Asia-based funds seek $16bn and 32 funds based elsewhere seek $7bn in institutional capital commitments.
The chart above illustrates that managers seeking capital for real estate funds based in the traditional markets of North America and Europe are more experienced than their counterparts in Asia and other markets. Double the proportion of North America- and Europe-based funds in market are managed by firms that have previously raised more than three private real estate funds previously (averaging 32%) compared to managers based in Asia and other regions (averaging 16%). Contrastingly, almost half of Asia- and Rest of World-based fund managers are currently raising first-time funds (49% and 48% respectively) compared with 34% and 40% of North America- and Europe-based firms.
US-based Blackstone Real Estate Partners Europe V is currently the largest private real estate fund currently in market, seeking $7.6bn in institutional capital commitments. The fund will focus on opportunistic and distressed investments across a diverse range of property types, including office, industrial, residential, retail and hotel assets throughout Western Europe. Another notable fund is Gateway Real Estate Fund V, which is looking to raise $1.5bn. The Hong Kong-based fund will focus on investments in properties in Greater China, as well as the rest of Asia, with particular interest in retail, office and hospitality assets.
Fundraising for private real estate funds remains competitive in Q1 2016, with experienced managers, particularly in the established markets, attempting to secure large swathes of the total targeted capital. There are currently 183 first-time funds seeking $34bn in aggregate targeted capital, whereas the most experienced managers (those that have raised seven or more funds previously) collectively have 61 funds in market targeting $61bn. This suggests that managers with established track records could continue to dominate fundraising over 2016 and lead to further capital concentration among the largest players in the industry, and most likely for funds focused on the traditional real estate markets.