Real estate-focused private equity funds raised $11.2 billion from investors during April-June, 26 per cent more than in January-March quarter.
According to a study by research firm Preqin, 18 private equity funds dedicated to real estate raised an aggregate $11.2 billion in the second quarter of 2011 compared with $8.9 billion in the previous quarter.
The June quarter mop-up was much higher than the $7.1 billion raised in the fourth quarter of 2010.
“As deal levels increase and as a result more distributions occur, investors will have more capital available to make new commitments, which is likely to further improve fund raising.
“This will be a gradual improvement, and with the market remaining extremely overcrowded, many firms will still be facing long periods in market and others will be forced to abandon their fund-raising efforts,” Preqin Manager (Real Estate Data), Mr Andrew Moylan, said.
In terms of geography, five private equity firms in Asia raked in $1.4 billion, while three Europe-focused funds garnered $1.2 billion.
Funds with a primary focus on North America mopped up the most capital, with 10 such funds receiving an aggregate commitment of $8.6 billion.
The most successful private equity fund during the quarter in terms of fund-raising activities was Lone Star Real Estate Fund, which mopped up $5.5 billion, followed by Och-Ziff Real Estate, which raised $840 million, and Pramerica Real Estate Capital I, which attracted $786 million.
“Several funds that closed in the quarter did so above target, again indicating that fund-raising success is possible in the current environment,” Mr Moylan added.
There are currently 435 private equity real estate funds in the market, targeting an aggregate commitment of $138 billion in the third quarter of 2011. This is a small decline in comparison to the quarter ended March 31, 2011, when 439 funds were targeting $160 billion.