Emerging real estate managers are facing “tough times”, according to Preqin, with the lowest proportion ever attracting capital.

Investors favour experience, according to research by the firm.

Emerging managers account for just 16% of real estate capital this year, with investors showing a limited appetite for less-seasoned managers.

Only 29% said they would invest or consider investing in first-time funds.

Andy Moylan, head of real assets products at Preqin, said: “The fundraising environment for emerging managers seems especially daunting in recent times.

“There is an extremely competitive fundraising market for those seeking to raise capital for real estate funds, and a limited track record may make it difficult for an emerging manager to gain traction and secure institutional investor commitments.”

As institutions decide to invest more capital across fewer relationships, some emerging fund managers may, Moylan said, instead look to build up a track record through separate accounts, or by investing on a deal-by-deal basis, as opposed to bringing multi-investor funds to market.

Despite raising $24bn (€22bn) last year, the proportion of total real estate capital raised by emerging managers has fallen from a record 37% in 2011 to 22% in 2014.

So far this year, only 16% has been raised by emerging managers – the lowest proportion recorded.

Preqin said overall investor appetite for funds from emerging managers was relatively low, finding that 17% of real estate investors said they would commit to an emerging fund.

Another 12% said they would consider it.

The preference changes, however, according to investor size.

Only 9% of LPs with less than $1bn in assets under management (AUM) plan to invest in emerging funds, compared with 41% of LPs with AUM of $50bn or more.