International private equity real estate funds face a tough year in 2012 due partly to the dearth of credit, investment adviser Swisslake said on Tuesday at the publication of its 2011 annual report for the industry.
International private equity real estate funds face a tough year in 2012 due partly to the dearth of credit, investment adviser Swisslake said on Tuesday at the publication of its 2011 annual report for the industry.
Last year saw private equity real estate funds recover from the aftermath of the financial crisis, thanks to increased investor appetite which in turn led to more funds being raised than in 2010.
Thanks to a strong first half, fund managers were more confident, as evidenced by the target equity volumes of funds launched in 2011. The return of the mega fund was a notable trend, Swisslake said.
A total of 239 funds were launched worldwide with a target equity volume of $120 bn (EUR 91 bn). In terms of the number of funds, this marks an increase of 12.7% on 2010. However, in terms of target equity volumes, the increase was even bigger, marking a jump of 61.7% on levels recorded in the previous year. Nevertheless levels remain far off the peak values from the years 2007 and 2008, when target equity volumes reached $230 bn, almost twice as much as current volumes.
In 2011, 88 funds held a final closing, raising a total of $47.6 bn. While the number of funds declined slightly compared to 2010 (96), the equity raised increased 3% to $47.6 bn from $46.2 bn in 2010. In terms of geographic allocation, North American funds topped the list with $20 bn of equity raised, thus accounting for 42% of the market.
Swisslake has developed a database containing more than 3,196 funds and covering a total of 1,252 fund managers worldwide (as of 31 December 2011).
