Fundraising - APRIL 2, 2014

European fundraising takes off in 2014

by Reg Clodfelter

European funds completed a massive quarter for fundraising, with funds that had a final close in first quarter 2014 raising $10.7 billion, after funds that had a final close only raised $950.5 million in first quarter 2013, and $11.2 billion throughout all of 2013, according to data from the IREI FundTracker database.

The haul was spearheaded by Blackstone Real Estate Partners Europe IV, managed by the The Blackstone Group, which closed last month after raising €5.1 billion ($7 billion) in less than a year of marketing. The success of the opportunistic fund, which targets high-quality distressed properties throughout Europe to stabilize and turn over as core, signals investors are once again ready to invest heavily in the continent. 

But BREP IV was not the only European fund to raise more than $1 billion. M&G Investment’s Real Estate Debt Fund II and Real Estate Debt Fund III each closed during the quarter after raising $1.0 billion and $1.3 billion, respectively. While both funds will invest in U.K. debt, Real Estate Debt Fund II will focus on mezzanine debt, while Real Estate Debt Fund III will focus on senior loans. LaSalle Investment Management also had a major haul for a debt strategy fund, raising $998.5 million for its Lasalle Real Estate Debt Strategies II in just one year of marketing.

Europe-focused funds that closed in 2012 raised a total of $8.6 billion, with well over half of funds not reaching their fundraising goals, sometimes by significant margins. All but one fund that closed in first quarter 2014 met its fundraising goal, and half were oversubscribed. Furthermore, half of the funds that closed in the first quarter were open for a year or less.

With fundraising in 2014 having almost matched the entire haul for 2013 in just one quarter, 2014 could prove to be the biggest year of fundraising for Europe-focused funds on record.

All data in this article from the IREI FundTracker database.

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