Real estate funds accounted for the largest proportion of PE capital raised in the fourth quarter of 2012. And the biggest PE fund of any type raised in 2012 was the Blackstone Group LP's (NYSE: BX) global real estate fund, Blackstone Real Estate Partners VII, which took home $13.3 billion and attracted 250 investors. With the real estate market rather soft at the moment, now is a great time for investors to find deals.
There are strong signals that limited partners (LPs) like private real estate funds, with 49 percent of LPs making new commitments to the sector in 2012, and 53 percent planning to make new commitments to the asset class in 2013, according to Preqin.
Indeed, 156 private equity real estate funds raised a total of $71.5 billion during 2012, which is on target with what was raised the year before, according to Private Equity Real Estate (PERE), a publication that covers the real estate market. More telling, opportunity funds, which specifically look to take advantage of falling real estate prices, raised $35 billion in 2012, a 45 percent increase from 2011. There are a total of 585 real estate funds in the market, targeting a total of $209 billion, according to PERE. For more on dealmaking in the sector, see "Beyond Location" in the April issue of Mergers & Acquisitions.