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GPs close on $4bn of capital H1 – despite chasing $109bn

Around 116 opportunistic funds were seeking to raise $109bn in capital as of August, according to Clerestory Capital Partners. By Q2, 47 funds targeting $35.5bn failed to come to market or were put on hold, particularly emerging market strategies.

Opportunistic real estate managers are targeting $109 billion in capital commitments in a bid to take advantage of distressed property prices – however only a dozen have managed to close their vehicles raising a total of just $4 billion.

Only 13 funds closed by the end of the second quarter, according to New York-based funds of funds firm Clerestory Capital Partners – however 116 opportunistic vehicles were in market during July and August.

Not many [GPs] appear to have been successful in either raising capital or making investments.

Clerestory identified 91 small cap opportunity funds targeting $46 billion in capital commitments during July and August, and another 25 large cap funds seeking to raise $63 billion. Small cap funds are those targeting less than $1 billion, and large cap those seeking to raise more than $1 billion.

One key trend has been the move away from emerging market strategies.

Around 47 funds, targeting $35.5 billion, were expected to come to market in the second quarter of 2009 that failed to do so or were postponed. More than two-thirds of those were emerging market funds.

Joanne Douvas, co-founder and managing principal, said in a statement that fund managers were “seeking to take advantage of the apparent distress in mature markets where they believe they can achieve better returns with less risk”.

Fellow co-founder Tommy Brown added: “We’ve seen a large number of funds emerge to target distressed opportunities stemming from the dislocation in the real estate markets during the credit crisis, but not many of them appear to have been successful in either raising capital or making investments.”