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Debt fund market share falls
The number of debt funds, as well as the amount of capital they are raising, is decreasing in 2017, according to Institutional Real Estate, Inc.’s FundTracker database.
Debt-focused real estate funds raised $2.9 billion through June 1, 2017. In 2016, debt-focused funds raised $20.7 billion. In addition, hybrid funds, which include equity and debt investment, raised $3.6 billion in the first five months of the year, compared with $12.8 billion in 2016.
But that is no surprise — the entire fundraising market is slowing down, so it makes sense debt fundraising also would slow. Real estate funds raised $109.2 billion in 2015, $99.0 billion in 2016 and $24.3 billion in the first five months of 2017.
Moreover, debt vehicles have seen a decline in their share of the market. According to the FundTracker database, 459 real estate funds have held a final closing since Jan. 1, 2014. Of those, 71 funds (15 percent) were focused exclusively on debt. An additional 54 fund