Early numbers are in for real estate investment funds closing in first quarter 2018, and they look ... interesting. At this time last year, we were looking at only $12.4 billion raised by the 18 funds that closed in the first quarter of 2017. Today, we are seeing $27.4 billion raised by 21 funds closed in first quarter of 2018.
We need to be a bit careful with our hopes and extrapolations because we are looking at very early numbers, but we might be seeing the start of an upswing in fundraising. That $12.4 billion total in first quarter 2017, which was noted in the “Q1/2017 First Look” issue of TrendWatch, eventually grew to $16.6 billion raised by 25 funds, as additional data was captured. It is reasonable to assume that the 2018 first quarter numbers will also increase as data gets added to the database, so we might very well be looking at the beginning of a very good year, despite continuing investor jitters.
During the past four years, about 24 percent of the total capital raised each year was raised in the first quarter. If this ratio holds for 2018, we could be looking at a fundraising year outpacing the recent high recorded in 2015.
Uncertainty in both the economic and political worlds has resulted in investors being very cautious in their commitments during the past couple of years. The world might not be more certain today, but at some point investors have to invest. It’s in their job description. 2018 might be that point.
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