Opportunity funds raise EUR 12b globally in H2 2009: survey

Equity-raising by opportunistic real estate funds jumped to $17 bn (EUR 12.4 bn) globally in the second half of 2009, but the final capital closes for 26 nonlisted vehicles came only after very extended marketing periods, according to the latest research from Clerestory Capital published on Tuesday. There was also a clear
trend towards more small-cap funds, the New York-based real estate investment manager said.

Joanne Douvas, Co-Founder and Managing Principal at Clerestory said: 'The fund closings in the latter half of last year represented a substantial volume of capital, which was 115% higher than we recorded in the middle of 2009, but our research indicates that this was more a clearing of the gridlock than a real surge in new money from investors.'
She added: 'There is also a clear trend towards more small-cap vehicles as the equity targets for larger funds are proving too daunting in this investment environment.'

Clerestory carried out its research in January and February and found that 20 of the 26 opportunistic real estate funds that closed in the second half of 2009 were small-cap (SC) and six were large-cap (LC), representing $8.1 bn and $9.1 bn of equity respectively. This was 115% higher than in the first half of last year, although due to variations in the dataset and timing of the data collection, this is indicative of the broad trend rather than being strictly statistically comparable.

Clerestory defines SC-Opportunistic funds as those raising less than $1 bn of equity and LC-Opportunistic™ funds as those raising more than $1 bn. The investment manager conducts a survey twice a year on opportunistic real estate funds that are in the market; soon to be in the market; on hold; or closed and investing.
A further 14 new SC-Opportunistic funds seeking to raise $5.3 bn in equity and one new LC-Opportunistic fund looking for $1.0 bn entered the market during the second half of last year. These new funds included nine focused on investment in markets in the Americas, four on Asia and two on Europe.