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Far less opportunistic capital was raised by private equity real estate funds in 2020 compared with the previous two years, despite widespread market dislocation triggered by the pandemic.
According to PERE’s Q4 2020 fundraising report, an estimated $35.4 billion was raised via opportunistic funds in the full year, compared with $84.7 billion and $56.7 billion raised in 2019 and 2018, respectively. Opportunistic funds comprised 32 percent of all 2020 global real estate fundraising across strategies, which totaled $110.7 billion. In comparison, half of the $162.9 billion in aggregate fundraising in 2019 focused on the higher returning strategy.
The drop in opportunistic fundraising was in part because several managers were focused on investing the large pools of capital raised in the previous year. In contrast, there was an increase in value-add fundraising, which took up 33 percent of the overall capital-raising total, compared with 23 percent in 2019.
Last year was a relatively muted fundraising period for private real estate funds, given the unprecedented turmoil. Only 176 funds closed during the year, across different strategies, compared with 301 in 2019.
Dive into our interactive report for a fuller analysis of PERE’s Q4 2020 fundraising figures, including the quarter’s most popular strategies, top capital-raising regions, 10 largest fund closes and more.