GLOBAL – Fundraising by closed-ended private property funds has fallen to its lowest level in almost a decade according to new figures from Preqin.
The record-low $5.2bn raised in the first three months of 2013 is in contrast to Preqin's equivalent data for unlisted infrastructure funds, which suggested one of the strongest quarters in recent times.
Andrew Moylan, head of real assets products at Preqin, said Q1 marked a "slow period" for private equity real estate fundraising, highlighting the current difficulties managers were experiencing in achieving final closes. More than 40 funds reported interim closes during the period.
"The 20 firms that did reach a final close in Q1 spent, on average, more than 18 months marketing their funds," he added. "Although investor appetite for private real estate funds has increased in recent months, competition for limited-partner commitments remains intense and fundraising for most managers is a long, difficult process."
The Rockpoint Real Estate Fund IV claimed $1.9bn of all capital raised, representing 37% of the total volume, with North America the most attractive region, attracting $3.7bn.
Despite a comparatively healthier capital raise of $6.7bn, unlisted infrastructure funds were similarly dominated by individual players. EQT claimed the largest single close, securing well over one-third of capital with €1.9bn.
AXA's Infrastructure Generation III ranked second, raising €1.4bn, while DIF Infrastructure II and a mezzanine opportunities fund by Energy Capital Partners raised €800m and $805m, respectively.
The $6.7bn raised overall represented one of the most successful quarters for infrastructure managers. Only Q4 2012 and Q4 2011 saw larger volumes of capital, and the former's $13.5bn can be mainly attributed to the $8.25bn final close of Global Infrastructure Partners II.
Elliot Bradbrook, Preqin's manager of infrastructure data noted that the momentum within the infrastructure market remained strong.
"With 144 infrastructure funds in market looking to raise aggregate capital commitments of $93bn, fundraising is likely to remain competitive going forward," he said, adding that established fund managers would be more likely to attract commitments this year.
No comments yet