Over the course of the past year, many private equity real estate firms and platforms have found themselves undergoing a transformation. For some, it was about acquiring competitors to achieve greater scale or gain access to a region. For others, it was about scaling back operations or exiting the business completely in the wake of the recent downturn and expected reforms.
Indeed, both motivations are in evidence in PERE’s fourth annual PERE 30. The ranking, which tracks the 30 largest private equity real estate firms in the world by equity raised over the most recent five-year period, saw some of these changes already affect the standings, while others will take another year or two to have a noticeable impact.
Many familiar firms are back again this year, including last year’s top three in their same positions, although fundraising totals for some have declined by sizeable amounts. Much of this can be attributed to mega funds from the 2005 vintage falling off under the ranking’s five-year fundraising window, combined with the fact that little to no fundraising activity occurred in the two years following the collapse of Lehman Brothers and the onset of the global financial crisis. Also hurting fundraising totals is the fact that a number of investment banks have been getting out of the private equity real estate business.
Despite the tough environment, some firms did find success in the fundraising arena. Indeed, two of the biggest fundraisers over the past five quarters – Lone Star Funds and Shorenstein Properties – also happen to be the two biggest climbers in the PERE 30. Our complete coverage begins on p. 35.
Given the current fundraising environment, perhaps it is not surprising that both new and established players are turning to placement agents for help. Beginning on p. 28, Zoe Hughes examines how the industry is adapting to the changing nature of fundraising and what they are looking are looking for in the GPs they potentially will take on as clients.
For those looking to avoid the fundraising arena for the time being, perhaps secondaries are an option. Jonathan Brasse takes a look at how secondary sales are beginning to heat up, so much so that a few transactions have traded at a premium to net asset value. Check it out, starting on p. 31.
Beyond those features, the PERE team also brings you news about Gerald Ronson starting a club fund and PCCP on the verge of taking over Capmark’s debt fund. In total, a tidy package of capital raising goodness.
Enjoy the issue,
Senior Editor, Real Estate
PERE and PERENews.com