Chart of the week: Private real estate debt funds larger than ever

Average fundraising for closed ended private real estate debt funds showing growth in 2015


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Following the announcement this week that AEW Europe is set to expand its private real estate debt platform with a €750 million fund – Senior European Loan Fund II – PEI’s Research & Analytics team has taken a look at the changing average fund sizes of closed ended private real estate debt vehicles.

In 2015 to date 27 private real estate debt funds have held a final close, raising $24.78 billion collectively. In terms of average fundraising this equates to an average fund size of $920 million for the year so far. Between 2010 and 2012 this figure was closer to half a billion dollars.

Five private real estate debt vehicles have collected over $1 billion each from investors this year, the largest of which is Lone Star Real Estate Fund IV. The $5.9 billion distressed debt vehicle had initially targeted $5 billion to invest globally. Another mega-fund to close in 2015 was Starwood Distressed Opportunity Fund X, gathering $5.6 billion.

There are 113 private real estate debt vehicles currently in market or coming to market targeting an aggregate $44.56 billion. Colony Distressed Credit & Special Situations Fund (CDCF) IV, launched in May 2015, is the largest of these with a target size of $2.5 billion.