GLOBAL - Private real estate funds raised less capital in the second quarter than in each of the previous five quarters - and it took them longer to do it, according to new data from alternatives data firm Preqin.
Funds focused on North American real estate raised most capital, with 17 funds pulling in commitments of $4.7bn (€3.7bn) compared with a total of $7.5bn.
Last quarter saw $10bn raised down from $15.9bn raised in Q4 2011.
However, two of the top three capital-raisers among the 27 funds that closed in Q1 targeted global distress and Nordic assets.
Partners Group Global Real Estate 2011 raised $800m for a global programme aimed at mopping up pockets of distress, while Niam Nordic V raised €719m for investment in large portfolios across the Nordic and Baltic markets.
Only Colony Distressed Credit Fund II targeted North American assets, with US non-performing loans adding to a seat portfolio of discounted notes acquired via a settlement with the Lehman estate.
Overall, funds took on average two months longer to close in the first half of 2012 than in 2011 - 19 months compared with 17 months a year earlier.
Meanwhile, the 453 funds currently on the market are generally targeting less capital, with a $7bn drop in fundraising targets during the second quarter.
Preqin anticipated a slight improvement - no more than 20% - in the Q2 data as more become available and forecast little improvement in the second half.
The firm attributed last quarter's poor showing to "extremely tough" competition for fund managers looking to hold final closes, as institutional investors held back from investing in new private real estate funds.
Andrew Moylan, real estate data manager, said: "With 453 funds now on the road, it is harder than ever for managers seeking capital for real estate funds to stand out."