GLOBAL - Uncalled commitments secured by the world's 10 largest private real estate firms make up close to a quarter of the dry powder available to the real estate industry, according to Preqin.

The data analysis firm has reported that the largest private equity-style property fund managers, including Blackstone Group, Morgan Stanley Real Estate and Fortress Investment Group, have a combined US$37bn (€25.3bn) in uncalled capital.

However, there is some evidence that suggests these mega-fund managers have lost some of the investor appeal, with only four out of 12 new funds in the market holding at least one interim close.

Six of the top 10 managers were raising capital for 12 funds in May 2011, targeting an aggregate US$28.3bn, including Carlyle Group, LaSalle Investment Management and Lone Star Funds.

The report said: "In the current climate, many institutions are likely to seek smaller, more specialised vehicles alongside fewer investors, and prefer funds managed by smaller teams with which they can work closely."

It added: "Certain institutions interviewed by Preqin have indicated that they will no longer invest in large firms or mega-funds, as they want their managers to be more investor-orientated, potentially a difficult task for funds that have a large number of limited partners."

The largest private equity-style real estate managers are still most popular with North American institutional investors, representing 76% of investors in their funds.

The proportion is much smaller for continental Europe (13%), Asia-Pacific (6%) and the UK (4%).

US public pension funds are amongst the most prolific investors in funds managed by the top 10 firms, with 41% of these institutions committing to at least one.

Blackstone, Morgan Stanley Real Estate and LaSalle have each secured commitments from over 35 different US public pension funds.

The California State Teachers' Retirement System (CalSTRS) has committed to more individual funds managed by the top 10 managers than any other US public pension fund.

Andrew Moylan, real estate data manager at Preqin, said: "The top 10 firms manage a significant proportion of real estate capital and as such will be hugely influential on the market as a whole.

"These firms demonstrated the ability to consistently collect substantial amounts of capital and raise increasingly large funds while the industry enjoyed a sustained period of growth during the last decade."

Moylan added: "However, the downturn had a major impact on the real estate industry, with the performance of many private real estate funds significantly affected.

"As investors remain cautious, the success with which these firms deploy their large levels of uncalled capital could be crucial in their future fundraising prospects."