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Strategies Employed by Private Real Estate Funds Commencing Fundraising in 2010

by Andrew Moylan

  • 29 Oct 2010
  • RE

Examining the strategies employed by both closed- and open-ended funds which have commenced fundraising in 2010 demonstrates some interesting trends. In many cases funds will utilize a combination of two or more strategies. Opportunistic and value added remain popular strategies, with 45% and 36% of funds targeting these strategies respectively, but a significant 29% of funds expect to target distressed real estate and a similar proportion will invest in real estate debt. A smaller proportion of funds that have started raising capital expect to make core (21%) and core-plus (17%) investments, but the number of core funds launched in 2010 is significantly larger than in previous years. 50 core funds have been launched in 2010 to date, compared with 32 in 2009 and 27 in 2008. Additionally, several existing open-ended funds have received new equity commitments in recent months. Stichting Pensioenfonds Unilever Nederland ‘Progress’ recently committed €35 million to the core and core-plus Aberdeen European Balanced Property Fund, while San Diego County Employees Retirement Association committed $200 million to JP Morgan Strategic Property Fund.

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