Institutional capital continues to favor large real estate funds sponsored by proven investment managers. Funds that closed during the first half of 2014 totaled $39.4 billion, according to the Institutional Real Estate FundTracker database. Of that first-half total, 12 mega-funds ($1 billion plus) accounted for 67 percent — $26.6 billion — of the equity raised.

The largest fund to close during the first half of the year was The Blackstone Group’s Blackstone Real Estate Partners Europe IV, which topped $7 billion. Runners-up included PIMCO’s Bank Recapitalization and Value Opportunities Fund II ($5.5 billion), GI Partners’ GI Partners Fund IV ($2 billion) and Kildare Partners Kildare European Partners I ($2 billion).

The good news for investment managers sponsoring smaller and medium-sized funds is that nearly 40 funds of less than $1 billion in size closed during the first six months of the year. In addition, investors are