The largest private equity real estate firms continue to claim an increasingly greater share of the industry’s total fundraising volume, according to new research from PERE.
The industry’s top 50 firms amassed a total $271.1 billion over the past five years, according to the PERE H1 Fundraising Report 2016. Of that amount, the top 10 private equity real estate firms represented 55 percent, or $149.9 billion, the report said. In its 2016 PERE 50 list, PERE ranked the top 50 firms by total capital raised from January 1, 2011 through April 1, 2016 for value added or opportunistic equity strategies.
Blackstone was once again the industry leader on the capital raising front, representing 36 percent of the aggregated capital raised year to date among the top 10 firms, and 20 percent of the capital raised among the PERE 50.
The percentage of fundraising volume claimed by the top 10 firms has been ticking upward over the past three years, the report said. The total capital raised by the top 10 firms was 53.89 percent of the total raised by the PERE 50 in 2015, 51.81 percent in 2014 and 48.49 percent in 2013.
Since 2013, an ongoing trend in real estate fundraising has been fewer funds closing each year while annual fundraising volumes have steadily increased. During the first half of 2016, 104 funds reached a final close, down 8 percent from 2015 and 21 percent from 2014. However, the average capital raised per fund was $570 million during the first half of the year, compared with $503 million during the same period a year ago.
Indeed, the top 10 largest private real estate funds that closed during the first half of the year collected a total of $28.8 billion, or 48 percent of all funds collectively raised during that period. The fundraising volume was up 20 percent from the first half of 2015, when the top 10 funds amassed a total of $24 billion, or 44 percent of all private real estate capital raised during that period. Meanwhile, the top 10 funds collected a total of $80.5 billion, or 30 percent of overall fundraising by the PERE 50 firms during the five-year period.
The top 10 fund managers in the 2016 PERE 50 ranking were Blackstone, Lone Star Funds, Global Logistic Properties, Brookfield Asset Management, Starwood Capital Group, Tishman Speyer, The Carlyle Group, Oaktree Capital Management, Westbrook Partners and Rockpoint Group.
The top 10 private real estate fund closings during the first half of 2016 included Brookfield Asset Management’s $9 billion Brookfield Strategic Partners 2; Lone Star Funds’ $5.9 billion Lone Star Real Estate Fund V; Rockpoint Group’s $3.3 billion Rockpoint Real Estate Fund V; Westbrook Partners’ $2.85 billion Westbrook Real Estate Fund X and PW Real Assets’ (now Aermont Capital) $1.67 billion PW Real Estate Fund III; AllianceBernstein’s $1.55 billion Alliance Bernstein Commercial Real Estate Debt Fund II; PAG’s $1.3 billion PAG Real Estate Partners; Brockton Capital’s $1.21 billion Brockton Capital Fund III; AgFe’s $1.13 billion AgFe Floating Rate Senior Debt Fund; and Niam’s $890 million Niam Nordic VI.