Chart of the Week: Total Capital Raised by Strategy – Q3 2013 to Q3 2014

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Data from PERE Research & Analytics has revealed that, between Q3 2013 through Q3 2014, a total of $149.9 billion had been raised between 162 funds. In Q3 2014, $28.5 billion had been raised between 55 funds, a growth of 13 percent from the prior quarter where $25.1 billion was raised. While Q3 2014 is an improvement in fundraising from the prior quarter, it fails to meet the same fundraising levels from a year ago where $30.1 billion was raised, a decrease of roughly six percent.

Debt funds continue to lead all other strategies in 2014, where in Q3 2014 a total of $7.9 billion was raised. While the quarter doesn’t quite meet the fundraising levels of Q1 2014, where $10.5 billion had been raised, it does surpass the prior quarter by three percent, where $7.7 billion was raised. The largest debt fund to close for the quarter, as well as the largest fund to close so far in 2014, was the Lone Star Fund IX, managed by Lone Star Funds, which raised $7.4 billion in August. Value-add funds came in second for the quarter, raising a total of $6.8 billion. With the end of Q3 2014, value-add funds edged out opportunity funds as second highest aggregate fundraise so far in 2014 with a total of $19.3 billion. The most notable value-add fund to come from Q3 2014 was the Carmel Partners Investment Fund V, managed by Carmel Partners, which raised just over $1 billion in July. Secondary fundraising, which comprises “Other” funds alongside Fund-of-funds/co-investments, grew considerably in Q3 2014. One fund in particular accounts for a significant portion of secondary fundraising for the quarter. That fund was the Partners Group Real Estate Secondary 2013, managed by the Partners Group, which raised just under $2 billion. 

While most strategies surpassed its fundraising levels in Q3 2014 compared to a year ago, one strategy had faced a significant drop in capital raised throughout the time period. In Q3 2014, a total of $2.9 billion had been raised for opportunity funds. This represents a decrease of 62 percent from the prior quarter, where $4.7 billion was raised, and a decrease of 78 percent from a year ago where $13.2 billion had been raised. The largest fund to close this quarter for the strategy was the GreenOak US II, managed by GreenOak Real Estate, which raised $756 million in September. Despite the dip in fundraising, opportunistic fundraising looks strong going into the future. As at Q3 2014, the top five funds in market are all opportunity funds, with an aggregate target size of $19 billion. The largest opportunity fund in market is the Starwood Distressed Opportunity Fund X, managed by Starwood Capital Group, which is targeting $5 billion to invest globally.