© PERE Research & Analytics, 2015
© PERE Research & Analytics, 2015
Agenda
1. How buoyant is private real estate fundraising
market at the end of 2015?
2. What is driving the market?
3. What have LPs told PERE about their plans for real
estate in 2016?
4. How does this impact the fundraising climate next
year?
© PERE Research & Analytics, 2015
© PERE Research & Analytics, 2015
Current fundraising trends
© PERE Research & Analytics, 2015
Fundraising remains strong
$163.3 $66.6 $59.7 $80.1 $99.9 $119.4 $126.5 $107.7
297
190181
259
300 295
259
146
0
50
100
150
200
250
300
350
$-
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
$180.0
2008 2009 2010 2011 2012 2013 2014 2015Q3
Nu
mb
er
of
Fu
nd
Clo
sed
Tota
l Ca
pit
al R
ais
ed
($
bn
)
Capital raised No. of fund closed
© PERE Research & Analytics, 2015
Q3 2015 was the strongest on record
post-crisis
$20.9 $30.3 $31.3 $37.0 $32.6 $28.8 $33.7 $31.4 $25.3 $30.7 $51.7
8076
67
72 73
56
74
56 56
48
42
0
10
20
30
40
50
60
70
80
90
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2013Q1 Q2 Q3 Q4 2014Q1 Q2 Q3 Q4 2015Q1 Q2 Q3
Nu
mb
er
of
Fu
nd
Clo
sed
Tota
l Ca
pit
al R
ais
ed
($
bn
)
Capital raised No. of fund closed
© PERE Research & Analytics, 2015
Top 10 2015 fund closings as of end Q3
Fund Name Fund Manager Current Size ($bn) Region Focus Sector Focus
Blackstone Real Estate Partners VIII The Blackstone Group $ 15.8 Global Diversified
Lone Star Real Estate Fund IV Lone Star Funds $ 5.9 Global Diversified
Starwood Distressed Opportunity Fund X Starwood Capital Group $ 5.6 Global Diversified
Cityhold Office Partnership - Joint Venture TIAA-CREF $ 4.7 Pan-Europe Diversified
Carlyle Realty Partners VII The Carlyle Group $ 4.2 North America Diversified
China Logistics Fund II (CLF II)Global Logistic Properties (GLP) $ 3.7 Asia-Pacific Industrial
CRE Senior 9AXA Investment Managers - Real Assets $ 3.2 Western Europe Diversified
GLP US Income Partners IGlobal Logistic Properties (GLP) $ 3.2 North America Industrial
KSL Capital Partners IV KSL Capital Partners $ 2.7 North America Hospitality
CIM Fund VIII CIM Group $ 2.4 North America Diversified
© PERE Research & Analytics, 2015
2015 PERE 50 Top 10 Global
RankLast Year's Ranking
Name Headquarters Capital Raised ($m)
1 1 The Blackstone Group New York $ 46,300.0
2 3 Starwood Capital Group Greenwich $ 14,604.1
3 2 Lone Star Funds Dallas $ 12,500.0
4 10 Global Logistic Properties Singapore $ 9,072.5
5 5 Brookfield Asset Management Toronto $ 8,512.8
6 6 Tishman Speyer New York $ 8,359.6
7 4 Colony Capital Santa Monica $ 6,468.9
8 14 The Carlyle Group Washington, DC $ 5,882.9
9 15 Fortress Investment Group New York $ 4,688.2
10 9 Oaktree Capital Management Los Angeles $ 4,325.0
Full ranking was published in May 2015 Issue of PERE Magazine.
© PERE Research & Analytics, 2015
2015 PERE 50 Top 10 APAC
RankLast Year's Ranking
Name Headquarters Capital Raised ($m)
4 10 Global Logistic Properties Singapore $ 9,072.5
40 44 Mapletree Investments Singapore $ 1,919.2
44 28 PAG/Secured Capital Hong Kong $ 1,880.4
50 37 Gaw Capital Hong Kong $ 1,785.4
56 36 Alpha Investment Partners Singapore $ 1,652.5
57 17 CapitaLand Singapore $ 1,615.0
59 40 Phoenix Property Investors Limited Hong Kong $ 1,561.8
62 69 Fosun Capital Group Shanghai $ 1,444.1
64 new SC Capital Singapore $ 1,380.0
89 56 CLSA Capital Partners Hong Kong $ 823.0
Full ranking was published in May 2015 Issue of PERE Magazine.
© PERE Research & Analytics, 2015
Developed markets dominate
28%22% 22% 24% 25% 25%
17%
32%
19%24%
12%16% 16%
20% 34%
24%
33% 34%53% 41% 41%
39%35%
34%
2% 2%
3%6% 5% 2%
2% 3%17% 17%
10% 11% 12% 14% 10% 10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012 2013 2014 2015Q3
Tota
l Ca
pit
al R
ais
ed
Global Europe North America Latin America Middle East/Africa Asia-Pacific
© PERE Research & Analytics, 2015
Asian real estate fundraising
$9.3 $6.7 $4.4 $6.3 $8.8 $12.7 $5.9 $9.3
$19.2
$4.5
$1.6
$2.3
$3.4
$4.0
$7.3 $1.3
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
2008 2009 2010 2011 2012 2013 2014 2015Q3
Tota
l Ca
pit
al R
ais
ed
($
bn
)
APAC GPs Non-APAC GPs
© PERE Research & Analytics, 2015
GPs better at hitting targets
45%53%
47%38%
31%26%
19% 18%
41%34%
35%45%
46%50%
60%
48%
13% 13%18% 17%
23% 23% 21%
35%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012 2013 2014 2015Q3
Nu
mb
er
of
Fu
nd
s C
lose
d
Under Target At Target Above Target
© PERE Research & Analytics, 2015
Time on the Road
12
1716
21
1816
1516
0
5
10
15
20
25
2008 2009 2010 2011 2012 2013 2014 2015Q3
Av
era
ge
tim
e t
ake
to
clo
se f
un
ds
(mo
nth
s)
© PERE Research & Analytics, 2015
Crowded market for fundraising
$92.6 $84.0 $37.1 $36.9 $7.0 $5.5 178 360 133 36 31 230
50
100
150
200
250
300
350
400
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
$100.0
Europe North
America
Asia-Pacific Global Latin America Middle
East/Africa
Nu
mb
er
of
Fu
nd
s in
Ma
rke
t
Tota
l Ta
rge
t Siz
e (
$b
n)
Total target size No. of funds in market
© PERE Research & Analytics, 2015
Future of the Asset Class:
LP perspectives
© PERE Research & Analytics, 2015
82 percent of respondents will make
new investments in real estate
• Investors’ target asset classes over the next 12 months
Full report was published in June 2015 Issue of PERE Magazine.
82%73%
48%
24%
8%21%
31%
54%
10% 6%
21% 22%
Real Estate Private Equity Infrastructure Hedge funds
Will make new investments Will not invest Not sure
© PERE Research & Analytics, 2015
50% investors say their investments
performed better than expected
• Investors’ investment performance over the past 12 months
Full report was published in June 2015 Issue of PERE Magazine.
50%
39%
12%
Better than expected
As expected
Short of expectation
© PERE Research & Analytics, 2015
39 percent of investors feel under-
allocated to private real estate
• Investors’ current position
Full report was published in June 2015 Issue of PERE Magazine.
39%
31%
21%
7% 2%
Under-allocated to private real
estate
At my target allocation
No target allocation and invest
opportunistically
As a dedicated real estate
manager
Over-allocated to private real
estate
© PERE Research & Analytics, 2015
20% of LPs will increase their target
allocation
• Investors’ target position over the next 12 months
Full report was published in June 2015 Issue of PERE Magazine.
50%
26%
20%
4%
Leave target allocation to private
real estate unchanged
Have no target allocation and
invest opportunistically
Increase target allocation to
private real estate
Decrease target allocation to
private real estate
Remove my real estate allocation
© PERE Research & Analytics, 2015
30% of LPs think the number of
managers is not relevant
• Investors’ number of real estate managers
Full report was published in June 2015 Issue of PERE Magazine.
32%
30%
23%
16% Optimal. I will not shift the number
over the next 12 months.
The number of managers is not
relevant.
Too many. I plan to reduce the
number of relationships we have
over the next 12 months.
Too few. I plan to invest with new
managers over the next 12
months.
© PERE Research & Analytics, 2015
Track record and strategy matter
most to LPs
• Investors’ criteria of selecting a private real estate fund manager
Full report was published in June 2015 Issue of PERE Magazine.
2
4
6
9
18
40
3
4
13
10
18
12
19
5
2
7
14
17
16
9
8
Preferential fundraising terms
Level of co-investment
Quality and quantity of manager communication
Adherence to ESG principles
Fees
Team stability/retention strategy
Alignment of interests
Proven operational expertise
Clarity of strategy
Manager's track record
1st
2nd
3rd
© PERE Research & Analytics, 2015
USA and UK remain most attractive
• Developed markets that investors expect to find the most attractive
opportunities
Full report was published in June 2015 Issue of PERE Magazine.
3%
9%
10%
17%
18%
18%
25%
25%
27%
27%
28%
37%
43%
51%
82%
Switzerland
Korea
Hong Kong
Canada
Netherlands
Singapore
Nordics
Italy
France
Japan
Australia
Germany
Spain
UK
USA
© PERE Research & Analytics, 2015
More investors prefer Western Europe
to North America
• Investors’ target regions over the next 12 months
Full report was published in June 2015 Issue of PERE Magazine.
0%
5%
8%
12%
13%
18%
30%
32%
53%
59%
Middle East only funds
Africa only funds
Central and Eastern Europe only funds
Latin America only funds
Emerging Asia-Pacific only funds
Undecided
Developed Asia-Pacific only funds
Multi-region/global funds
North America only funds
Western Europe only funds
© PERE Research & Analytics, 2015
India leads emerging markets
• Emerging markets that Investors expect to find the most attractive
opportunities
Full report was published in June 2015 Issue of PERE Magazine.
3%
10%
10%
13%
15%
18%
27%
33%
36%
39%
46%
46%
48%
60%
Morocco
Peru
Middle East
Sub-Saharan Africa
Russia
Thailand
Colombia
Indonesia
Turkey
Poland
Brazil
China
Mexico
India
© PERE Research & Analytics, 2015
Office is still dominant strategy
• Investors’ target sectors over the next 12 months
Full report was published in June 2015 Issue of PERE Magazine.
8%
21%
26%
32%
34%
54%
55%
56%
61%
Other
Hotels
Student Housing
Senior Housing
Healthcare
Industrial
Retail
Multifamily/Residential
Office
© PERE Research & Analytics, 2015
LPs welcome new real estate lenders,
but split on PE firms coming into PE
• Investors’ views on the current trends
Full report was published in June 2015 Issue of PERE Magazine.
25%
5%
8%
10%
24%
46%
29%
56%
59%
67%
55%
42%
46%
40%
33%
25%
19%
11%
Traditional PE firms coming into real estate
Dominance of a few major players
Fund managers outsourcing internal or
operational functions
Fewer managers exclusively committed to
closed-ended funds models
Pricing disparities between top international
markets and all others
Emergence of private debt managers in real
estate lending
Positive
Neutral
Negative
© PERE Research & Analytics, 2015
Conclusions
1. Private real estate continue its strong fundraising record as LPs are
attracted to its characteristics
2. Allocations will increase over the long-term but LPs continue to be
selective over fund offerings
3. Largest GPs continue to dominate but LPs suggest this is not always
for the best
© PERE Research & Analytics, 2015
Presented by
Dan Gunner
Director, Research
PERE
www.perenews.com