Real Estate Fund of Funds Closed Since 2010

by Jonathan Ma

  • 08 Jun 2012
  • RE

During the period 2010 to May 2012, 19 real estate funds of funds reached final close, raising an aggregate $3.2bn from investors. Seven global funds raised 65% of the aggregate capital raised in the period. Eight North America-focused funds raised a total of $639mn, while two Europe-focused funds garnered an aggregate $130mn and two Asia-focused funds attracted a total of $378mn.

The largest global-focused vehicle to close in this period was Siguler Guff Distressed Real Estate Opportunities Fund. It closed in December 2011 on $630mn and invests in distressed and opportunistic funds. Sparinvest Property Fund II, managed by Sparinvest Property Investors, is another notable global-focused fund to have closed between 2010 and May 2012. The real estate fund of funds closed on €200mn in June 2011 and was fully committed as of October 2011. It targeted core-plus, distressed, opportunistic, secondaries and value added vehicles on a global basis.

CBRE Asia Alpha Plus Fund, an Asia-focused fund, closed in April 2010 having raised $269mn, and it was the largest region specific fund to close between 2010 and May 2012. It was followed by Pohjola Real Estate Fund of Funds II, a Europe-focused vehicle which closed on €90mn, and Metropolitan Real Estate Partners VIII, a North America-focused fund that closed on $129mn.

Between 2010 and May 2012, real estate fund of funds raised by North America-headquartered firms outnumbered those raised by Europe-headquartered firms. Twelve vehicles raised by North America-based firms raised $2bn and seven funds raised by Europe-based firms raised $1.2bn. No funds of funds to close in this period were raised by firms headquartered outside of the US or Europe.

Aggregate capital raised by first-time fund managers accounted for 35% of all capital that was raised by real estate funds of funds closed between 2010 and May 2012. GPs closing their second or third funds comprised 34% of capital raised, while fund managers on their fourth fund or more accounted for 31%. This demonstrates that despite the continued economic uncertainty and fundraising difficulties, first-time fund managers are still capable of picking up commitments from investors if they offer a compelling proposition.

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