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Data from PERE Research & Analytics has revealed that total capital raised for funds that solely invest in a particular type of property, i.e. hospitality, industrial, office, etc., had decreased in Q1 2014 when compared to a year prior. Total capital raised in Q1 2014 for sector-specific funds was $5.19 billion, a roughly one-third decrease from Q1 2013 where $7.73 billion was closed amongst these funds. Additionally, Q1 2014 represents the least amount of total capital closed on for sector-specific funds between the Q1 2013 through Q1 2014 period.
However, despite the overall decline in total capital raised, some sector-specific funds had an overall increase in total capital raised in Q1 2014. Capital raised for industrial-specific funds had increased consistently since Q2 2013, closing on a total of $3.32 billion in Q1 2014. One fund in particular contributed significantly to the total capital raised for Industrial-specific funds in Q1 2014. That fund was the $712 million Cabot Industrial Value Fund IV managed by Cabot Properties, a value-added fund that is targeting industrial investments globally. Limited partner interest has increased towards the industrial sector in recent years, with pension funds such as Massachusetts Pension Reserves Investment Management Board and the California Public Employees' Retirement System establishing separate accounts to invest in the sector.
While most sectors showed an increase in total capital raised in Q1 2014 when compared to previous quarters, retail-specific funds had decreased from their peak in Q4 2013. Those funds had raised a total of $155.3 million in Q1 2014, a significant decrease from the previous quarter where such funds closed on $2.35 billion of total capital.