PERE: European fundraising surges back in Q2

After a quiet Q1, Europe-focused, closed-ended private real estate fundraising surged to account for more than a third (39 percent) of the $47.99 billion total capital raised, new statistics from PERE Research & Analytics have revealed.

European strategies accounted for only 9 percent of the $19.57 billion raised during the first quarter. But after multiple $1 billion-plus fundraises, the region has now garnered investor support to the tune of $18.71 billion.

Making up the bulk of the capital collected was Blackstone Real Estate Partners Europe V, the New York private equity giant’s latest record-breaking European opportunistic offering, which closed on $8.87 billion last month.

Kildare Partners and Orion Capital Managers also held $1 billion-plus closes on European opportunistic strategies, while PGIM Real Estate gathered $1.3 billion for its sixth mezzanine real estate debt fund.

However, North America-focused funds continued to be the most popular strategy taking a 49 percent share of the total. The largest fund to close in H1 was Cerberus Capital Management’s latest vehicle – Cerberus Institutional Real Estate Partners IV – which has so far garnered support of $1.8 billion towards a $2 billion target.

Global and APAC strategies each accounted for 8 percent of the capital raised.
Last year’s first half fundraising results saw a more even split between the strategies with global funds taking a 33 percent share, North America 32 percent, Europe 21 percent and Asia-Pacific 13 percent.

The total of 84 funds closed in H1 2017, is significantly down on the 127 closed in the same period in 2016. However, the average fund size trended upwards from $504.21 million in H1 2016, to $545.32 million in the first half of this year.

Despite the uptick in average fund size the results showed a continuation of the trend which has seen overall global real estate fundraising dive last year.

In 2016, a total of $120.97 billion was raised for 214 funds, down considerably from the 2015 tally of $143.85 billion for 253 funds. The total number of funds closed in 2016 was the lowest in eight years, while the total capital raised was the lowest in five years.