22 September 2017
Reporter: Jenna Lomax

Preqin: Capital concentration in real estate has reached unprecedented levels

The top 100 private real estate fund managers accounted for 62 percent of total industry fundraising over the past decade, according to a new Preqin report.

The report, The Real Estate 100, also found that the top 20 private real estate funds closed in the past 10 years have been raised by just five firms, securing close to $150 billion in institutional capital commitments in the process.

Out of the top 100 funds studied in the report, 68 were based in North America, and 26 of those were located in New York, including the number one fund, Blackstone Group, which has raised aggregated capital worth 83.1 billion since 2007.

Oliver Senchal, head of real estate products at Preqin, said: “With private real estate industry seeing increased concentration of capital at the top end of the market, the influence of the top 100 real estate fund managers has never been greater.”

“Collectively, these fund managers account for two thirds of fundraising over the past decade, and consequently are able to influence the fundraising and deal activity of the market to a large degree.”

The report also asked representatives from the 100 fund managers which types of funds they favoured, giving them multiple options in the survey.

The survey found 83 percent of respondents favoured core funds, 82 percent supported the use of value-added vehicles, while only 22 percent advocated funds of funds and just 6 percent championed secondaries.

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