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Sitting on a Stash - Real Estate Funds Have High Levels of Uncalled Capital

by Andrew Moylan

  • 07 May 2010
  • PE
  • RE

Using Preqin’s individual fund level performance data, it is possible to calculate how much capital is still uncalled by funds of different vintage years. Vintage 2007 funds have called up 54% of investor commitments and still have $67 billion in uncalled capital available for investment. With the median investment period length for real estate funds standing at three years, a significant proportion of this capital is committed to funds nearing the end of their investment periods. There is also $19 billion of uncalled capital from funds of a 2006 vintage, and the vast majority of this capital will be for funds nearing the end of their investment periods.

Funds of 2008 vintage have called just 30% of their commitments. Although managers of most of these funds will have more than a year of the investment period remaining, it still represents a significant amount of dry powder that is available to make acquisitions, if the managers of these funds believe that it is a good time to do so. Additionally, some vintage 2008 funds have investment periods shorter than three years. Therefore, in total, it is estimated that funds with an investment period ending in 2010 have $70-80 billion in uncalled capital.

Preqin’s Real Estate Online service includes both current and historic dry powder levels for private equity real estate .

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