The major issues being that investors are less enthusiastic about the commingled fund model citing lack of liquidity and control; and a movement towards direct investments and separate accounts for specific investments.
With just $30.4 billion of capital raised for value-add and opportunistic private equity real estate funds in 2009, it’s fair to say fundraising in the past year was austere.
Compared to the peak of 2007, when global fundraising efforts corralled more than $85 billion, 2009 was down by roughly two-thirds. Even judged against 2005 standards, 2009 fundraising for closed-ended, commingled property vehicles was no bonanza. In 2005, when PERE first started collecting data, GPs raised some $37.4 billion in capital commitments.
No question, the past year was a humbling one for all concerned. And managers are craving fresh funding. According to PERE data, there are currently more than 240 real estate equity funds in the market trying to raise capital.
The market for fund raising for real estate funds remains difficult and it is unclear how the model will develop in 2010
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