PERE Forum: Forethoughts on fundraising

Four leading GPs give their thoughts on the fundraising climate today and look to 2012 at last month's PERE Forum in New York.

Capital raising for the private equity real estate sector looks to be a muted affair over the coming 12 months, although there are pockets of appetite emerging, particularly from Asia and the Middle East. That was a view common to leading GPs attending last month’s PERE Forum in New York.

Matt Khourie, global chief executive officer at CBRE Global Investors, described today’s fundraising environment as “dicey,” but he added that sovereign wealth funds in particular were “aggressively putting out dollars”. Today offers a good window for higher risk strategies, he added, warning that those insisting on staying on the market sidelines would be disappointed if they maintained that stance.

Raymond Milkulich, head of real estate for North America at Apollo Global Real Estate, echoed Khourie’s observation of sovereign wealth dollars becoming more active, adding that they’re “tiring of answering the phone”, presumably to the growing number of investment firms marketing their investment vehicles. Nonetheless, he said there is a general acceptance by institutions to take on more risk in their real estate allocations, which should prove positive for those with fundraising aspirations, even if they are being more “selective”.

Christopher Papachristophorou, chief executive officer for global opportunistic investments at RREEF, seconded the view that investors are moving up the risk curve, but he added that the beneficiaries of that movement would be those GPs considered “best in class”. 

Meanwhile, Alok Guar, managing director at The Carlyle Group, predicted private equity real estate funds would benefit from a 20 percent to 30 percent increase in committed capital in 2012, pointing to Asian investors as especially active, both domestically in Asia and globally.