The covid-19 pandemic showed its impact in less-than-exuberant capital raising numbers for the 2021 ranking.

That was the most notable takeaway from this year’s ranking, but it was by no means the only one. We detail the five stand-out themes from our listing of private real estate managers by capital raised for higher risk and return strategies.

1. Growth slowdown

The $510.9 billion in total capital captured by this year’s PERE 100 was a modest 3.3 percent increase from last year.

While the ranking’s five-year fundraising total has continued to grow every year, this year’s growth rate was significantly smaller than that of the previous year, when the aggregate equity ticked up 11.8 percent to $494.5 billion from $442.3 billion.

Why the muted change? A notable decrease in fundraising activity at the top of the ranking. Seven of the top 10 managers in this year’s roster saw their five-year equity hauls shrink from the 2020 list. This includes top-ranking Blackstone, whose five-year total dropped 23 percent from $64.9 billion to $49.9 billion.

2. A less mega year

The slower growth in overall equity gathered by the 2021 PERE 100 can be attributed in part to less capital being raised by mega-funds.

The two $5 billion-plus vehicles that closed in 2020 – Blackstone Real Estate Partners Europe VI and Blackstone Real Estate Debt Strategies IV – amassed a total of nearly $20 billion, according to PERE data. In contrast, three mega-funds attracted a total of $43.7 billion in 2019.

However, one capital raiser for a PERE 100 firm says the lower amount of mega-fund capital raised “might just be a circumstance of timing,” noting three mega-funds targeting a total of $30.5 billion are currently in market. “The current environment actually favors the mega-funds,” he says. “It’s easier for investors to commit money to existing managers because they’ve already vetted the managers.”

3. North America continues to prevail

The region became an even more dominant region, representing the headquarters for 75 of the PERE 100 firms, compared with 73 last year.

Meanwhile, Europe rose from 17 to 18 and Asia fell from 10 to seven managers. “There’s two elements to that,” says Doug Weill, managing partner at New York-based real estate advisory firm Hodes Weill. “There are many North America-headquartered firms now investing globally. Also, right now, the US is viewed quite favorably from an investment standpoint, with the economy seeming to rev back up and fundamentals looking good as people go back to work or come out of lockdown.”

4. Rise of the distress player

Specialists in the strategy made a strong showing in this year’s list.

A case in point was Oaktree Capital Management, which climbed 19 spots to 14 on the strength of its $4.7 billion final close for Oaktree Real Estate Opportunities Fund VIII, which accounted for more than half of the $8.3 billion the firm collected over the past five years. Meanwhile, Cerberus Capital Management rose from 12 to eight following the $2.8 billion capital raise for Cerberus Institutional Real Estate Partners V.

Such managers are “classic distressed firms and know how to take advantage of a down cycle,” Weill observes. “Their ability to be creative and access distress sometimes through distressed loans is appealing to the market today.”

5. Private equity giants pass each other

Two private equity giants made notably opposite movements on the PERE 100.

New York-based KKR jumped 15 spots from 26 to 11, thanks to a five-year fundraising total that surged 87 percent from $5.2 billion to $9.7 billion over the past year. That tally was bolstered by recent fundraises such as $750 million for KKR Real Estate Securities Dislocation Opportunity Co-Investment Fund.

Moving in the opposite direction was Washington, DC’s Carlyle, which tumbled 20 places from seven to 27 as its five-year equity haul fell 39 percent from $10.9 billion to $6.7 billion during the same period.

Biggest riser: Bain Capital

Multiple managers made major leaps in this year’s PERE 100, including nine that soared 30 places or more. The biggest riser of the group was Bain Capital Real Estate, which has become one of the top 25 largest managers in its only second year in the ranking. The property arm of the Boston-based private equity firm shot up 63 spots from 87 to 24 as its five-year equity total more than quadrupled from $1.5 billion to $7.1 billion. Bain Capital’s Real Estate Funds I and II raised almost $3 billion, and the rest of the capital was made up of separately managed accounts.

Biggest faller: Spear Street Capital

But while some will rise, others will fall. Indeed, other managers took a plunge down the ranking, with nine firms sliding 20 spots or more. The biggest faller was Spear Street Capital, which plummeted 43 places from 56 to 99 as its five-year tally shrank 43 percent from $2.6 billion to $1.5 billion. One reason for this steep drop was Spear Street’s 2015-vintage fund, the $1.1 billion SSC V, dropping out of the five-year qualification window for the PERE 100. In a stark reversal of fundraising fortunes, the San Francisco-based firm was actually one of the top 10 highest risers in the 2020 ranking.