Private Equity Fundraising for CRE Continues to Fall

By Allen Kenney
Fundraising by private equity firms for real estate investment worldwide topped out at $4.9 billion in 2009's third quarter, the lowest total in six years, according to an analysis from alternative-assets research firm Preqin.
It marked the fourth quarter in a row in which fundraising had fallen. In the year-earlier period, private equity funds raised more than $40 billion.
Overall, fundraising has "almost ground to a halt," said Andrew Moylan, Preqin's manager of real estate data.
"Despite the fall in the number of funds in market, there is still a good stock of funds on the road, and it is clearly investor sentiment rather than lack of supply which is contributing to the slow fundraising environment. Investors are very cautious, with many having seen significant declines in their real estate portfolios and are reluctant to commit to new vehicles," Moylan said.
Preqin also noted that activity among 46 private equity real estate funds has been suspended through three quarters in 2009. In 2008, a total of 27 funds were put on hold for the entire year.