Solely Debt-Focused Real Estate Funds - May 2013

by Luke Alexander

  • 10 May 2013
  • RE

Annual solely debt-focused private real estate fundraising has generally experienced a downward trend since 2008. Preqin's data shows that in 2008, 32 debt-focused funds closed on an aggregate $10.8bn. In 2009, fundraising for solely debt-focused funds decreased significantly, when 17 funds closed having raised an aggregate $6.4bn. 2010 saw a further decline, with debt-focused fundraising reached its lowest point, when 13 funds closed on an aggregate $2bn. Fundraising figures increased considerably in 2011, when 18 funds closed raising an aggregate $7.3bn. A low level of fundraising returned for solely debt-focused strategies in 2012, when six funds reached a final close having raised an aggregate $2.8bn in capital commitments. January to April 2013 saw one fund close on $600mn.

There are currently 40 solely debt-focused private real estate funds on the road, looking to raise $25bn in capital commitments. Although this may be the result of increasing investor appetite for debt-focused vehicles, fund managers are likely to find fundraising for these funds particularly challenging. Geographically, there are 21 funds on the road targeting the US, seeking an aggregate $12.5bn in equity, whereas $12.4bn is being sought by 18 funds on the road targeting Europe. There is one fund currently focusing on the Rest of World region seeking $500mn in commitments.

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