During Q3 2012 institutions continued to invest in more established private real estate markets, namely North America, Europe and Asia. Funds with a primary focus on North America raised the most capital in Q3 2012, with 12 funds closing on an aggregate $4.2bn in capital commitments.
The largest North America-focused fund to close in this period was Carmel Partners Investment Fund IV, which employs a value added, opportunistic debt and distressed strategy. The fund raised $820mn to acquire and reposition under-performing multi-family investments in high barrier of entry markets in the US. Five funds primarily focused on Europe closed in Q3 2012, having raised a total of $2.1bn, while six funds focused on Asia raised an aggregate $2.5bn; three Rest of World-focused funds closed on an aggregate $347mn. The largest fund to close during the quarter was Patron Capital Fund IV, which raised €880mn from investors. The opportunistic fund targets distressed and undervalued property and property-backed corporate investments, including property companies, hotels, and leisure complexes primarily across Western Europe. The largest Asia-focused fund to close was CapitaMalls China Development Fund III, an opportunistic vehicle managed by CapitaLand, which secured $1bn.
North America-focused funds have raised the most equity from real estate investors each year since 2005. Funds targeting North America accounted for 46% of all the capital raised by real estate vehicles that closed in Q3 2012, a smaller proportion than those seen in 2010 and 2011. In Q3 2012, Europe-focused funds accounted for 23% of aggregate capital raised and Asia-focused funds accounted for 27% of aggregate capital raised; rest of World-focused funds made up a further 4%.