Year in review: Fundraising slows in 2020
Closed-end real estate funds raised at least $96 billion in 2020, according to Institutional Real Estate, Inc.’s FundTracker database, down from the $121 billion raised in 2019. Reviewing preliminary data from fourth quarter 2020, at least 85 funds closed in 2020 with an aggregate total of more than $96 billion. (This figure is likely to increase slightly as final results trickle in.) The data demonstrate COVID-19 curtailed most fund managers’ capital-raising results for 2020 and significantly slowed cross-border capital flows.
And it remains clear that the fundraising environment for real estate managers has been and will continue to be extremely competitive. According to the FundTracker database, of the 85 funds that closed in 2020, only 12 were first-time funds. In addition, the average length of time required from launch to close, for funds closed in 2020 was 17 months. Only 35 percent of funds that closed in 2020 raised more than they targeted, and 22 percent raised