European private equity real estate fundraising is gaining on the US in 2025, driven by a global investor shift toward stability. According to Zubaer Mahboob, senior vice president in Heitman’s investment research group, investors have started taking a “more balanced view about risks and rewards”.
Looking back over the past decade, European fundraising activity represented about three quarters of the US in the five years prior to the pandemic but dropped sharply after the healthcare crisis, when global investors flocked to North America, attracted by the lure of faster growth and higher returns.
Between 2021 and 2024, European fundraising was just over half the US, reaching rock bottom in 2024. In the first half of this year, however, the ratio of Europe/North America fundraising rose sharply to the highest level of the past decade, drawing a “pretty clear trendline”, Zubaer said.
“Compared to the post-COVID years, the Europe/North America disparity is a lot narrower in 2025. What we are seeing is that while the US remains attractive, there is a rebalancing of capital underway favouring Europe which we expect to continue in the future as it has become clear to investors that policy volatility may persist in the US, at least in the short term. Europe does not need to reach parity, but even a modest shift in allocations could translate into significant deployment opportunities into a region that is wealthy, densely populated, and starved of supply.”
A capital shift towards Europe is further supported by the limited number of investment destinations; for instance, Russia is no longer a part of the global investment community, he adds.
“The number of countries where investors can deploy their money at major scale has paradoxically declined in the past decade, and choices are limited,” Zubaer said.
“Things like certainty of policymaking and adherence to the rule of law and to institutional norms matter to investors, and from that perspective I believe Europe will continue to stand out in the coming years.”
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