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UK-Focused Private Real Estate Fund Managers – September 2013

by Karun Ahluwalia

  • 06 Sep 2013
  • RE

Preqin’s Real Estate Online shows that there are currently 28 solely UK-focused funds in market, which are targeting an aggregate £5.7bn in investor commitments. Since 2003, there has been an aggregate capital of £11bn raised. From 2007 onwards, there have been a total of 60 private real estate funds which have closed with an aggregate capital of £7.2bn being raised.

In 2007, 12 funds closed, raising £1.3bn in investor commitments. Conversely in 2012, nine funds were raised with only £300mn in capital raised. This in turn suggests that following the onset of the financial crisis, fund managers have found fundraising to a difficult process. Figures so far for 2013 suggest a continued struggle for fund managers with only two funds closing by September 2013 and £300mn in commitments raised. To this end, fund managers may be forced to adjust their targets and aim to raise smaller funds in order to achieve closes.

Solely UK-focused funds in market have a high preference for acquiring a diversified property portfolio rather than being sector-specific, with 36% of funds in market targeting a diverse range of property types. Funds targeting residential properties account for 19% of all solely UK-focused funds on the road, as demand for housing becomes a pressing issue due to the constant strains of population growth. Industrial-focused vehicles make up 15% of all solely UK-focused funds in market, as do those targeting niche property types. Vehicles targeting office and retail properties make up 11% and 4% respectively.

ICG-Longbow UK Real Estate Debt Investments III is currently the largest solely UK-focused fund on road. This vehicle, managed by ICG Longbow, is targeting £500mn in investor commitments while employing a debt strategy. L&G UK Property Income Fund II, managed by Legal & General Property, is also targeting GBP 500mn in capital and is a core/core-plus vehicle aimed at pursuing commercial properties.

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