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The private real estate market saw the lowest amount of capital raised in five years as the industry grappled with interest rate hikes and inflationary pressure.
According to PERE’s FY 2022 fundraising report, a total of $168.7 billion was raised in 2022. This represents a 24 percent drop from the $223.3 billion raised in 2021. Aside from the macro headwinds, this decrease can also be explained by the strong fundraising volumes in 2021 and the subsequent lack of deployment of that capital. In fact, the total capital raised in 2021 was the highest recorded by PERE in more than a decade.
Although 2022 had a smaller fundraising year and recorded the closings of only three mega-funds, referring to vehicles that net $5 billion or more, at least four funds targeting $5 billion or more are in the market right now. These include Blackstone’s Blackstone Real Estate Partners X, which had amassed $26.5 billion against a $25 billion target as of January 20, and Blackstone Real Estate Partners Asia III, with a $9 billion equity goal.
Meanwhile, investors have also shown stronger interest in real estate debt strategies due to the rising interest rate environment. Debt funds made up 22 percent of total capital raised in 2022, the highest proportion ever since 2017. At the same time, opportunistic funds accounted for the highest percentage of total capital raised last year as investors got ready to take advantage of the market dislocation. The strategy corralled $61.2 billion over 84 funds and represented 36.3 percent of the total capital raised.
Check out our interactive report for a more extensive analysis of 2022’s fundraising figures, including the most popular strategies and the largest funds in market.
Download the data here.
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