July 4, 2011 – By Andrew Macdonald
LONDON (Reuters) - Private equity real estate funds focused on the North American property market hogged the lion's share of the $11.2 billion raised by those with a final close in the second quarter of 2011, research firm Preqin said.
Total commitments were up on the $8.9 billion raised in the first quarter, and on the $7.1 billion raised in fourth-quarter 2010, Preqin said on Monday.
Lone Star Real Estate Fund II raised $5.5 billion at final close, the Och-Ziff <OZM.N> Real Estate Fund II raised $840 million, and Pramerica <PRU.N> Real Estate Capital I raised 492 million pounds ($786.5 million), Preqin said.
"Several funds to close in the quarter did so above target, again indicating that fundraising success is possible in the current environment," Andrew Moylan, Preqin's manager of real estate data, said.
Ten funds with a primary focus on the North American market raised commitments of $8.6 billion, while three Europe-focused funds garnered $1.2 billion, and five Asia and rest of world-focused funds collected $1.4 billion, Preqin said.
"As deal levels increase and, as a result, more distributions occur, investors will have more capital available to make new commitments, which is likely to further improve fundraising," Moylan said.
"This will be a gradual improvement. With the market remaining extremely overcrowded, many firms will be facing long periods in the market and others will be forced to abandon their fundraising efforts."
Preqin said there are 435 private equity real estate funds in the market seeking to raise $148 billion. In first-half 2011, it had taken an average of 15.5 months to close a fund, against 16.8 months a year earlier.
($1 = 0.626 British Pounds)
(Editing by David Hulmes)