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Fund raising by realty-focused PEs slows, slumps 72% in Q2

Fund raising by realty-focused PEs slows, slumps 72% in Q2
PTI
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First Published: Wed, Aug 05 2009. 05 04 PM IST
Updated: Wed, Aug 05 2009. 05 04 PM IST
New Delhi: Money by realty-focused private equity funds declined to over a four-year-low level of $10.3 billion in April-June 2009 as institutional investors remained hesitant in committing capital.
According to a report by global research firm Preqin, private equity real estate funds are still struggling to raise capital in the current economic environment.
In the April-June quarter, 21 real estate funds made aggregate commitments of $10.3 billion, down 72.16% from $37 billion in the year-ago period.
“This represents the lowest fund raising quarter for PE real estate funds since Q4 2004, when the funds raised an aggregate $10 billion,” Preqin said.
The report said that investors have turned cautious and are now looking at more established markets.
“During this time of economic instability, investors are especially cautious when making new commitments, and are therefore in many cases looking towards more established markets, rather than emerging markets, which are perceived as being higher risk,” Preqin said.
Although money raising by the private equity real estate industry has declined sharply, the fall is particularly noticeable for funds targeting Asia.
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First Published: Wed, Aug 05 2009. 05 04 PM IST
More Topics: Private Equity | Funds | Preqin | Realty | Investors |