Capital distributions to private real estate fund investors reached an all-time high in 2013, with a total of $138 billion returned to investors as a result of managers selling assets.

This is more than double the $67bn distributed to investors throughout 2012. With capital distributions increasing, many investors are able to re-invest previously tied up capital into new funds, further bolstering the private real estate fundraising market.

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As such, Preqin’s recent investor survey revealed that institutional commitments to the asset class increased over the last year, with 52% of investors surveyed in July 2014 stating they had committed to real estate funds in the previous 12 months, more than any other period since December 2009.

Key Facts:

  • 2013 also saw capital distributions exceed the amount invested in real estate, with $92bn of equity deployed by private fund managers in real estate assets.
  • 2012 saw the highest level of capital called by private real estate managers in any single year, with $130bn in capital called from investors over the year. This narrowly surpassed the $129bn called in 2007.
  • With distributions increasing and investors therefore able to access previously tied-up capital, 82% of real estate fund managers believe investor appetite for private real estate investment has increased in the last 12 months.
  • However, investors are becoming increasingly demanding regarding information on investments and performance, and as a result 38% of real estate firms will be increasing their investor relations team over the next 12 months.
  • 55% of active institutional investors will be investing $100mn or more in private real estate in the coming year, up from 40% of investors surveyed a year ago.
  • Fund managers remain confident there are attractive opportunities in real estate; 63% expect to invest more capital in the next 12 months than they did in the past year, and just 14% expect to invest less.

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