Hitting the Target

Data from PERE Research & Analytics has revealed that a total of $151.6 billion had been raised between Q2 2013 through Q2 2014 with $25.2 billion raised between 40 funds in Q2 2014. Q2 2014 represented a dip in total capital raised from the prior quarter, where $31.1 billion had been raised. However, despite the decrease in capital raised for Q2 2014, the quarter represents the highest percentage of funds that either reached or surpassed its target in the past year at 85%.

Q2 2014 saw the close of 40 funds, a decrease of a third from the previous quarter where 60 funds closed and a decrease of just below 50% from a year prior. Q2 2014 follows the trend started in Q3 2013 where each quarter saw less and less fund closings. However, while fewer funds had closed since Q3 2014, more funds are either reaching or surpassing their targets. Q3 2014 saw the highest percentage of funds closing below their targets, at 29% of the 63 fund closings for the quarter. The next quarter, on the other hand, saw the highest amount of funds closing above their target at 31% with about $3.9 billion in oversubscribed capital. With fewer funds closed in Q2 2014 than the previous quarter, more oversubscribed capital had been raised. In Q2 2014, approximately $1.6 billion had been collected in oversubscribed capital compared to the $1.4 billion in Q1 2014.

A few of the funds closed in Q2 2014 that were significantly above their target include the opportunistic GI Partners Fund IV, managed by GI Partners, which closed on an extra $500 million above target, the value-add DivcoWest Fund IV, managed by DivcoWest, with $226 million past its target, and the value-add Greystar Equity Partners VIII, managed by Greystar Real Estate Partners, with $200 million above its target of $600 million.