PERE has launched its first-ever ranking of the top 50 capital raisers for real estate debt, the RED 50. That comes at a heady time for fundraising for the strategy.
In 2010, 20 managers collectively raised $12 billion for debt-focused funds. Fast-forward to 2017 and 55 funds closed on a record-breaking capital raise of $40 billion. But there is a sting in the tail – just $20 billion was raised from 35 funds last year, after four consecutive years of increased fundraising.
So is investor appetite for property debt strategies waning? Not necessarily.
The 2018 decline may indicate simply that the current crop of investors active in the space has reached portfolio allocation targets for debt and managers have switched from capital raising to capital deployment. Certainly, many commentators in this report are confident that debt is here to stay and, in the long term, will continue to grow in private real estate as a valuable diversification tool in addition to traditional equity strategies and as an important defensive play against future market volatility.
Click here to download a PDF of the report.