The majority of capital is accounted for by North America-focused funds, with $113bn of dry powder focused on the region. Europe-focused funds have $66bn of dry powder, with Asia-focused funds and funds focusing outside of these three regions having $32bn and $9bn in uncalled capital respectively.
The increase in uncalled capital available to private real estate fund managers is a result of strong fundraising over the last two years. In Q3 2014, 28 real estate funds closed securing an aggregate $17bn, bringing the 2014 to date figure to $62bn. This compares to $57bn raised during the same period in 2013, indicating that undraising for the whole year is likely to be strong again.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Private Real Estate Fundraising Key Facts:
- Lone Star Fund IX was the largest fund to close in Q3 2014 after securing $7.2bn for global opportunities.
- The average size of real estate funds closed so far in 2014 stands at $546mn, the highest figure ever for a single year, and is a result of larger funds being raised by fewer managers.
- 55% of funds closed so far in 2014 have met or exceeded their target size compared to 59% of funds closed in 2013 and 46% in 2012.
- The highest amount of capital was secured by primarily Europe-focused funds, with 7 reaching a final close with an aggregate $10.1bn. 13 primarily North America-focused funds secured an aggregate $5.0bn, while 6 funds focused on Asia raised a total of $1.5bn.
- Distressed funds raised the largest amount of capital compared to any other strategy, with $7.3bn secured by 2 funds. 7 opportunistic funds held a final close and raised $2.5bn.
- Real estate funds closed between Q1 and Q3 2014 spent an average of 19 months on the road, up from 17 months for funds closed in 2013 and is the highest figure for the period from 2006 to present.
- As of the start of Q4 2014, 461 real estate funds are in market targeting an aggregate $156bn.
Comment:
"While the $17bn raised in Q3 represents a decline compared to the amount of capital raised by private real estate funds in Q1 and Q2 this year, there have been several consecutive quarters of strong fundraising, reflecting the growing institutional investor appetite for real estate funds. As a result of this increase in fundraising, private equity real estate fund managers now have a record amount of capital available to invest."
"Fund managers are largely confident they can put this capital to work, with 63% of managers expecting to invest more capital in the coming 12 months than they did in the past year, but with a wall of capital chasing deals and pricing increasing, they will have to work hard to find value in an increasingly competitive marketplace."
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
