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Laxman Pai, Opalesque Asia: The number of private real estate funds reaching a final close has plummeted so far this year. Just 58 private real estate funds reached a final close in Q2 2020, down 28% from 81 funds closed in Q1 2020 and 47% from Q2 2019 (110), said a report by Preqin.
That said, these 58 funds raised $41bn, which exceeds that of Q1 2020 and Q2 2019, and matches the 2019 quarterly average ($43bn).
"Fundraising in H1 2020 saw heavy capital concentration, but new funds are coming to market as investors prepare fresh commitments," it stated.
According to the report, despite the healthy total, the capital was far from evenly shared. Eleven mega-funds - funds raising $1bn or more - closed in Q2 2020, collectively securing 75% of aggregate capital raised in Q2 2020 and 45% of the H1 2020 total.
For comparison, nine mega-funds closed in Q2 2019, representing 59% of the quarterly total. Among funds closed in Q2 2020 was Blackstone Real Estate Partners Europe V, which secured $10.6bn to become the largest-ever dedicated Europe-focused real estate fund.
Amid the uncertainty of the pandemic's long-term influence on property trends, more investors are turning to the perceived safety of brand-name managers, in what was already a highly competitive fundraising market.
With 928 private real estate funds in the market as of mid-July, including 72 targeting $1bn or more, competition is likely to intensify further still. To put this figure into ...................... To view our full article Click here
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