There are currently 23 real estate funds of funds are on the road targeting an aggregate $4.2bn, a decrease of $1.2bn from Q2 2011, when 26 funds of funds were in market targeting a total of $5.4bn. Of these vehicles there are 12 that intend to invest globally, seeking an aggregate $2.6bn, while there are five that are North America-focused targeting $0.8bn, two Europe-focused hoping to raise $0.1bn and four Asia-focused funds targeting $0.7bn.
The largest global real estate fund of funds on the road is Clerestory Small Cap Real Estate Fund II. Managed by Clerestory Capital Partners, the fund is targeting $400mn and will invest in opportunistic real estate funds on a global basis. Aberdeen Asset Management: Property Division manages the largest Asia-focused fund of funds currently fundraising – Aberdeen Asia III Property Fund of Funds, which invests in a diverse range of property types. This vehicle is hoping to raise $350mn from investors and is also the second largest fund of funds on the road overall.
Other region-specific funds include Investors Diversified Realty Fund, which is targeting $250mn to invest in US-focused funds, and LFP European Fund of Funds, a Europe-focused fund targeting €100mn that will invest in core, opportunistic and value added funds.
Thirty-seven percent of firms raising real estate funds of funds have been in market for over 18 months, indicating that fundraising remains slow and challenging. Thirty-eight percent of firms have spent less than one-year in market, showing that fund managers are continuing to bring funds to market despite the fundraising difficulties. The remaining quarter comprises funds that have spent 13-18 months on the road.