Insights

KAP’s insights on private equity investor relations and fundraising

 

Happy New Year! Welcome back to the weekly Re-KAP where we round up market and LP news from the RE PE marketplace (Jan. 3, 2018)

MARKET NEWS

Private-equity funds that focus on real estate have been raising less money for the past few years. According to Preqin, private-equity real-estate funds raised $110.3 billion in 2017, compared with $126 billion in 2016 and $136 billion in 2015 (see chart below.) Investors, analysts and fund managers attribute this trend to a slowdown in funds deploying the capital they’ve raised, not a change in institutional investors’ appetite for real estate funds.

CAPITAL RAISING UPDATES

Berkshire Group has raised $501.9 million for Berkshire Multifamily Income Realty Fund, a core-plus real estate fund focused on acquiring recently built multifamily assets within prime submarkets across the U.S. Launched in 2015, the fund has received commitments from multiple investors, including $75 million from New Mexico State Investment Council. The real estate investment management company did not comment on its fundraising efforts, but they are concurrently fundraising for Berkshire Multifamily Value Plus Fund IV, a fund that targets multifamily investment opportunities across the U.S. Berkshire manages approximately $7 billion in real estate assets on behalf of its institutional clients worldwide.

LIMITED PARTNER NEWS

  • Texas County and District Retirement System has committed $50 million to Starwood Global Opportunity Fund XI, which targets investments in the U.S. and Europe, splitting the capital equally between the two regions. The $28.6 billion public pension currently allocates 4.83% to the asset class, below its 6% target.
  • Public School Teachers’ Pension & Retirement Fund of Chicago has hired two new real estate fund managers. The $10.8 billion public pension hired Basis Investment Group and Longpoint Realty Partners to run $30 million and $20 million in real estate, respectively. Earlier this summer, the public pension issued an RFP for real estate managers certified as minority, women, or disabled person-owned business enterprises. Chicago Public School Teachers’ currently allocates 6.9% of total assets to real estate, below its 9% target.
  • Ohio Police and Fire Pension Fund has approved its 2018 pacing plans and is looking to invest $485 million to real assets, and $165 million to real estate. The $15.5 billion public pension will be looking to commit between $50 and $75 million per fund. Ohio Police and Fire maintains an 11% allocation to real estate, slightly below its 12% target.