Preqin’s latest research shows the private equity real estate industry continued to grow in 2014. The aggregate assets under management of closed-end private real estate funds stands at $742bn as of June 2014, an increase of $50bn since December 2013.
Total assets under management have increased by 63% since December 2010, with a large proportion of this growth accounted for by the increase in the value of real estate assets still being held by fund managers. The value of the assets held by managers has risen from $314bn in 2010 to $567bn in 2014.
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Private Real Estate Market Key Facts:
- Global private real estate dry powder, the amount of uncalled capital available for investment in real estate assets, stands at $175bn.
- $138bn of capital was distributed back to investors in private real estate funds in 2013, more than double the $67bn returned in 2012.
- The PrEQIn Real Estate Index, which captures the actual money-weighted return earned by investors on average in their real estate portfolios, has increased by 25% in the period from March 2012 to March 2014.
- Funds closed in 2014 year-to-date (as of 21 November) have raised $77bn, just shy of the $80bn raised during the same period in 2013.
- There has been a 153% increase in the amount of capital raised by Europe-focused funds closed in 2014 (January to November) compared to funds closed during the same period in 2013.
- Blackstone Real Estate Partners Europe IV is the largest fund to close so far in 2014, having raised 7.2bn.
Comment:
"2014 has seen a notable rise in the amount of assets managed by the private real estate industry. This increase in private real estate fund managers’ portfolios can be attributed to the improving real estate valuations and increased investment activity by these firms."
"Preqin has witnessed the average net value of assets held by fund managers increase in every quarter over the past three years. As a result, performance for the asset class has been strong over recent years, as demonstrated by the growth in the PrEQIn Real Estate Index."
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By GlobalData"The improvement in fundraising in recent quarters also means that fund managers now have large amounts of dry powder available to make new investments. Capital distributions to investors also reached an all-time high in 2013 at $138bn.
"This is more than double the amount returned to investors in 2012, and indicates that many managers have seen recent quarters as a good time to sell assets. The return of previously tied-up capital to investors may prove positive for private real estate fundraising in future months, as investors look to re-invest the capital in new real estate funds."
Andrew Moylan, Head of Real Assets Products – Preqin
