Q3 2018 fundraising first look: Rolling up and down

Third quarter 2018 saw real estate investment funds continue the rollercoaster trend of recent fundraising, which has been up and down over the past few years.

Although numbers have been up and down, early results show a quarter of fundraising well ahead of third quarter 2017. Funds reaching a final close in third quarter 2018 raised a total of $28.6 billion compared with $18.3 billion raised during third quarter 2017.

Not only is the fundraising total ahead of third quarter 2017’s total, the combined total for the first three quarters of 2018, $85.3 billion, is the highest it has been since the first three quarters of 2015, $92.1 billion.

Third quarter 2018 funds closed a bit slower than third quarter 2017 funds, with those closing in third quarter 2017 taking an average of 17.2 months to reach a final close compared with this year’s average of 18.8 months.

Fund size is also trending back upward. Looking at the size of funds closed in the first three quarters, we see the 2016 and 2017 trimmed means coming in at $640.4 million and $615.8 million, respectively, while the of 2018 mean has climbed to $826 million.

The third quarter 2018 total will likely change as additional fund closings are announced, but it is safe to say that fewer funds are closing compared with the previous year, but more capital is being raised. It will be interesting to watch how fourth quarter 2018 completes the picture.

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