Capital raising for non-listed funds halved in 2008

Capital raising in the second half of 2008 slowed dramatically as activity in the non-listed property markets came to a halt due to the financial downturn. In total, fund managers raised EUR 10.2 bn in 2008, compared to EUR 19 bn in 2008, a drop of 46%. Of the total for 2008, 61% was raised in the first half of the year.

'This year's survey clearly shows the focus in 2008 switched away from capital raising as fund managers and investors sought to resolve issues in existing investments,' said Georg Allendorf, managing director of Rreef Spezial Invest and vice-Chairman of Inrev.

The results for 2008 show that the capital called in represented 73% of capital raised in the same year. This compares to 47% in 2007 with the results showing that while investment saw only a moderate decrease on 2007 levels, capital raising has become much more challenging in 2008.

The results are based on data supplied by 54 fund managers who detailed capital raised and called in over the period 2005 - 2008. In the four-year period, the sample raised EUR 54.2 bn and called in EUR 26.6 bn, resulting in EUR 27.6 bn of uninvested capital. This represents 51% of the capital raised from investors from 2005 - 2008.

Asked about their capital raising intentions for 2009, fund managers indicated that the downward trend will continue. In total, they expect to raise EUR 6.1 bn in 2009, a decrease of 59% on 2008. However, the results show that the ratio of capital called in to capital raised will likely reach 80% in 2009, indicating that they foresee investment opportunities in the market. In addition, the fund managers estimated that they would aim to launch 31 new funds.