The private equity real estate sector may be slowing down as the credit crunch affects investor confidence, but signs for 2008 are encouraging, according to Preqin Real Estate Online, part
The private equity real estate sector may be slowing down as the credit crunch affects investor confidence, but signs for 2008 are encouraging, according to Preqin Real Estate Online, part of Private Equity Intelligence.
In its latest survey of activity in the sector, Preqin Real Estate Online says that last year 126 private equity real estate funds achieved final closes after raising a total of USD79bn. With data still coming in, the fundraising total for 2007 is set to match or exceed the previous year’s tally of USD85bn.
Last year 60 US-focused funds raised an aggregate USD36.5bn and 37 European-focused funds raised USD20.6bn, while 29 funds focused on Asia and rest of the world raised USD21.6bn. This was the first time Asian/rest of the world funds had outpaced Europe, underlining the excellent growth opportunities real estate investors see in these regions.
The first half of last year saw the majority of fundraising, with 73 funds raising a total of USD44.2bn, and by mid-year it appeared that 2007 would easily top the previous year’s figures. However, in the second half 53 funds closed with a total of USD34.5bn.
However, Preqin Real Estate Online says prospects for 2008 look more encouraging and it could prove another strong year for fundraising. Currently 266 funds are on the road looking to raise USD123bn, of which 72 of these funds have reached interim closes and are targeting a total of USD47bn.
The report says investors continue to increase allocations to private equity real estate funds rather than other forms of real estate investment. The Preqin Real Estate Online database provides online access to information on unlisted real estate fund managers, funds, performance, fundraising, investors and placement agents.