Strong Fundraising Year for Private Equity Real Estate

The closed-end real estate fundraising market recorded another strong year in 2016, as 214 funds closed globally raising an aggregate $104 billion – marking the fourth straight year in which fundraising for the asset class has exceeded $100 billion globally, according to the latest data from Preqin as reported by GlobeSt.com.

 

2016 might even be stronger than the current data reflects, because Preqin expects these figures to rise by as much as 10 percent as more information becomes available. The article suggested that last year may approach the post-recession record of $123 billion raised by funds closed in 2015.

 

The only negative: Fundraising increasingly is concentrated among fewer managers, with 2016 representing the lowest total number of funds since 2009. It marks the fourth annual decline in fund closures.

 

Private real estate funds have been hot due to continuing, strong investor demand and sustained institutional appetite for real estate, according to the article.

 

“2016 has been another robust year of fundraising for private real estate funds, continuing a pattern of strong investor demand seen over the past few years,” said Preqin’s Andrew Moylan. “While individual annual fundraising totals do not match those seen in 2007-2008, the industry has raised more than $446 billion in the past four years, level with the cumulative total for the period between 2005 and 2008, which reflects the sustained institutional appetite for real estate.”