Capital raised for European non-listed property funds fell by 60% in 2009 to EUR 5.9 bn, according to INREV's latest study. This compares to EUR 14.8 bn in 2008. For full-year 2010, fund managers are seen raising EUR 10.9 bn.
Capital raised for European non-listed property funds fell by 60% in 2009 to EUR 5.9 bn, according to INREV's latest study. This compares to EUR 14.8 bn in 2008. For full-year 2010, fund managers are seen raising EUR 10.9 bn.
'The figures reflect a challenging year for capital raising but what they do not show is the positive activity of fund managers to regroup and launch funds that are in line with investors’ needs following the downturn. Fund managers and investors have been engaged in due diligence for new funds and we expect to see the fruits of that in 2010,' said Lonneke Löwik, Director of Research and Market Information.
Funds called in EUR 6.2 bn in 2009 compared to EUR 7.5 bn in 2008. This is a drop of 17.5% but it is also the first time that more capital has been called in than raised in a single year. This indicates that there was activity in the underlying markets as capital has been put to work for new investments or been called in to support underperforming funds. The ratio of uncalled capital across the study period of 2004-2009 is 26%.
Core funds raised 87% of the capital in 2009 which supports the trend that investors are seeking funds with lower risk/return strategies. Core funds also called in most capital in 2009 at 91% of the total. This shift to core had an impact on other styles, with opportunity funds attracting only 4% of the capital raised. However, opportunity funds tend to raise more per fund so volumes are likely to be harder hit if fewer funds are raising.
'We expect investors to remain risk averse and this is reflected in the fact that core funds remain the preferred style for 2010. Just over half of the capital raised is expected to be allocated to this style,'said Löwik.