The spring cleaning mantra of ‘Out with the old, in with the new’ very much describes this year’s PERE 30ranking. A number of legacy platforms that were hurt by the global financial crisis and subsequently acquired or wound down – including Lehman Brothers, Citi Property Investors and KK daVinci Advisors –are no longer present, thanks to the elimination of large 2006 vintage funds that now fall outside the ranking’s five-year fundraising window. The only remnant of such firms still in the PERE 30 ranking is Bank of America Merrill Lynch, which is hanging in on the strength of its $2.65 billion Asian Real Estate Opportunities Fund that closed in 2008.
The exit of these legacy platforms from the PERE 30 has opened the door for several new players to emerge in this year’s ranking and a few other firms to make a reappearance following an absence of a couple of years. The first-time members of the PERE 30 are Brookfield Asset Management, CIM Group and Northwood Investors, while returning firmsinclude AEW Global, JER Partners and DRA Advisors.
The positions of a few firms also were affected by decisions to return uninvested capital to investors. For example, Morgan Stanley Real Estate Investing returned $700 million from its $4.7 billion Morgan Stanley Real Estate Fund VII Global in exchange for a 12-month extension of its investment period. Meanwhile, LaSalle Investment Management returned $600 million in uninvested capital rather than seek an extension for its $2.4 billion Asia Opportunity Fund III.
Despite the tough environment for fundraising, particularly in the second half of the year, some firms did find success with new funds over the past five quarters. Two of the biggest fundraisers over the past five quarters also happen to be the two biggest climbers in the PERE 30. Angelo Gordon & Co closed its latest opportunity fund on $1.265 billion, which propelled the firm some 11 spots in the ranking. Starwood Capital Group, which is in the middle of marketing its latest fund, moved up nine spots on the strength of $1.4 billion in equity raised so far. Lone Star Funds and The Carlyle Group also experienced incremental bumps in the ranking, thanks to successful final closings last year.
The PERE 30
1. The Blackstone Group
2. Morgan Stanley Real Estate Investing
3. Goldman Sachs Real Estate Principal Investment Area
4. Tishman Speyer
5. Colony Capital
6. The Carlyle Group
7. Lone Star Funds
8. Beacon Capital Partners
9. Westbrook Partners
10. LaSalle Investment Management
12. Starwood Capital Group
13. CBRE Global Investors
14. AREA Property Partners
15. Prudential Real Estate Investors
16. TA Associates Realty
17. Angelo, Gordon & Co
18. Rockpoint Group
19. Shorenstein Properties
20. Bank of America Merrill Lynch Global Principal Investments
21. AEW Global
23. Brookfield Asset Management
24. Lubert-Adler Partners
25. JER Partners
26. Grove International Partners
27. CIM Group
28. Northwood Investors
29. DRA Advisors
30. Walton Street Capital
The PERE 30 measures equity raised between 1 January 2007 and mid-April 2012 for direct real estate investment through closed-ended, commingled real estate funds and co-investment vehicles that sit alongside those funds. The vehicles must give the GP discretion over the capital, meaning club funds, separate accounts and joint ventures are excluded from the ranking. Also excluded are funds with strategies other than value-added and opportunistic, such as core and core-plus, as well as those not focused on direct real estate, like fund of funds and debt funds, and funds where the primary strategy is not real estatefocused such as general private equity.