Capital raised by the world’s leading private equity real estate firms has grown from $176.5 billion in 2014 to $224 billion in 2015, a 27% increase according to the 2015 Private Equity Real Estate (PERE) 50. The report ranks the top 50 private equity real estate firms by the amount of capital raised over a five year qualifying period.
To make the 2015 Pere 50, the minimum capital a group needed to raise through the five-year qualifying period was $1.785 billion, up 37% from $1.3 billion in 2014.
The star performer in the Pere 50 continues to be The Blackstone Group which raised $46.3 billion, $14.2 billion more than in 2014 and more capital than the second, third and fourth placed firms which raised a combined capital of just over $36.1 billion over the same period. Blackstone raised more equity for real estate investing than the GDP of 77 different countries and has been top of the Pere 50 since 2008.
Returning to the top 50 are Invesco Real Estate and AEW Global, both were absent for two years and three year absentee USAA Real Estate. New entrants Greystar Real Estate Partners and Almanac Realty Investors, shoot their way into 18th and 32nd place respectively, with a combined capital raising of $5.5 billion over the qualifying period.
The Pere top 50 includes just six non-US private equity real estate firms. European real estate investments have lately been regarded as a priority for institutional investors yet the recent popularity of US investment strategies has resulted in a dearth of European private equity firms in this year’s ranking. In 2014, 13 non-US strategies were in the top 50, four of these were European based; now just Kildare Partners, based in London and ECE Real Estate Partners from Hamburg make the top 50.
There has been no return to the Pere 50 for the principal real estate businesses of the major US banking groups which traditionally used to rank highly, such as Goldman Sachs and Morgan Stanley. However, failure to perform consistently coupled with a heavy regulatory environment post-global financial crisis has seen these businesses disappear from the report over the years.
Jonathan Brasse, senior editor, Pere, said: “The US markets have dominated the private equity real estate space, as increasing numbers of institutional investors have accepted higher risks in order to continue deploying their capital stateside. To what extent this trend continues will be interesting to see in next year’s ranking as other regions begin to look increasingly attractive.”
“The polarization of investor backing for the firms with the strongest track records is as stark as ever, with Blackstone continuing to stand out from the crowd on the back of good performance which has been driving the growth of its capital under management year on year.”
Source: Property Magazine