Private Equity Real Estate Hits Bottom

2010 was not a kind year when it came to raising money for private equity real estate players.

According to researcher Preqin, private equity real estate fundraising sank to a seven-year low, with an aggregate $35.8 billion raised in 2010, a 28% decline from 2009 levels.

Last year also saw only 89 private equity real estate funds reach a final close, raising $35.8 billion, a 28% decline from the $49.8 billion raised in 2009 and the lowest annual total since $14.1 billion was raised in 2003.

Here are a few highlights from Preqin’s recent findings:

Fundraising by Region - Funds with a primary focus on North America raised the most capital in 2010, with 45 funds raising an aggregate $22.5bn. 24 Asia and Rest of World-focused funds raised $10bn, while 19 Europe-focused funds raised $3.4 billion.

Time Taken to Close Funds - Funds that closed in 2010 spent an average of 17.6 months in market. In contrast, funds that closed in 2007 spent an average of 10 months in market, demonstrating how much harder it has been recently for fund managers to secure commitments.

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