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05. Oktober 2011 
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Opportunistic real estate funds capital raising
The number of opportunistic real estate funds globally seeking to raise capital has picked-up markedly this year, hitting a total target of 76 billion US-Dollars, as managers see more chances to profit from distressed deals coming onto the market, particularly in the U.S., the latest research from investment manager Clerestory Capital shows.
Joanne Douvas, Co-Founder and Managing Principal at Clerestory said: “The funds currently in the market are predominately focused on the U.S., which reflects the level of distressed loan resolution activity in this market compared with Europe. Larger funds are also returning to the market as investment periods are expiring and the opportunities are scaling up in size. We also see many new smaller funds, especially ones with more differentiated investment strategies.” The Clerestory research found that, by the end of the first-half of 2011, there were 116 real estate opportunity funds in the market globally seeking to raise just over 76 billion US-Dollars of capital. Of these, 58 were seeking around 32 billion US-Dollars to invest in the U.S., comprised of 11 large cap funds and 47 small cap funds. This compares with a total of 94 funds seeking to raise about 60 billion US-Dollars for opportunistic strategies in the fourth quarter of 2010.
Clerestory defines SC-Opportunistic™ funds as those seeking to raise less than one billion US-Dollar of equity and LC-Opportunistic™ funds as those seeking to raise more than one billion US-Dollars of equity commitments. The increase is primarily due to the rise in new capital being sought by large-cap funds this year. The bigger funds made-up just over half of the capital being sought in 2011 at about 41 billion US-Dollar, with small-caps at around 35 billion US-Dollars. Tommy Brown, Co-Founder and Managing Principal at Clerestory said: “Generally speaking, real estate in mature investment markets globally needs to be recapitalized. Transactional activity in the U.S. has been steadily increasing since the fall of 2009, as has capital formation. The continued volatility in the capital markets along with the economic uncertainty – especially in certain parts of Europe – is expected to further accelerate the transition of broken capital structures back towards a more functioning market place.”
Joanne Douvas, Co-Founder and Managing Principal at Clerestory said: “The funds currently in the market are predominately focused on the U.S., which reflects the level of distressed loan resolution activity in this market compared with Europe. Larger funds are also returning to the market as investment periods are expiring and the opportunities are scaling up in size. We also see many new smaller funds, especially ones with more differentiated investment strategies.” The Clerestory research found that, by the end of the first-half of 2011, there were 116 real estate opportunity funds in the market globally seeking to raise just over 76 billion US-Dollars of capital. Of these, 58 were seeking around 32 billion US-Dollars to invest in the U.S., comprised of 11 large cap funds and 47 small cap funds. This compares with a total of 94 funds seeking to raise about 60 billion US-Dollars for opportunistic strategies in the fourth quarter of 2010.
Clerestory defines SC-Opportunistic™ funds as those seeking to raise less than one billion US-Dollar of equity and LC-Opportunistic™ funds as those seeking to raise more than one billion US-Dollars of equity commitments. The increase is primarily due to the rise in new capital being sought by large-cap funds this year. The bigger funds made-up just over half of the capital being sought in 2011 at about 41 billion US-Dollar, with small-caps at around 35 billion US-Dollars. Tommy Brown, Co-Founder and Managing Principal at Clerestory said: “Generally speaking, real estate in mature investment markets globally needs to be recapitalized. Transactional activity in the U.S. has been steadily increasing since the fall of 2009, as has capital formation. The continued volatility in the capital markets along with the economic uncertainty – especially in certain parts of Europe – is expected to further accelerate the transition of broken capital structures back towards a more functioning market place.”
