Top 50 Real Estate PE Firms
Top 50 Real Estate PE Firms
Top 50 Real Estate PE Firms
Methodology
The PERE 50 measures equity raised between 1 January
2008 and mid-April 2013 for direct real estate investment
through closed-ended, commingled real estate funds and
co-investment vehicles that sit alongside those funds. The
vehicles must give the GP discretion over the capital, meaning
club funds, separate accounts and joint ventures are excluded
from the ranking. Also excluded are funds with strategies other
than value-added and opportunistic, such as core and core-plus, as
well as those not focused on direct real estate, like fund of funds and
debt funds, and funds where the primary strategy is not real estatefocused, such as general private equity.
A post-crisis shake-up
The elimination of funds closed in 2007 from this years ranking
has caused the biggest reshuffling of top firms in recent memory
Changes abound in this years ranking of the largest private equity real estate in the
world in terms of fundraising activity. First and most obvious is that the ranking
has expanded from 30 firms to 50 this year. This is partly the result of the increased
capabilities of PEREs Research & Analytics team, which did much of the grunt work
for this years ranking, as well as the desire to offer our readers a wider, more comprehensive look at fundraising activity across the market.
Secondly, the PERE 50 has experienced the biggest reshuffling of firms at the top of
the ranking in recent memory. Much of this is due to the elimination of large funds
that closed in 2007 and now fall outside the rankings five-year fundraising window.
Among the casualties are the real estate investment arms of investment banks Morgan Stanley and Goldman Sachs, which declined nine and five spots respectively,
as well as private real estate firms such as Beacon Capital Partners and Rockpoint
Group. Indeed, Beacon fell 20 places as some $4 billion was shaved from its five-year
tally, while Rockpoint dropped 16 spots and now is relying solely on the fund it just
closed earlier this year.
The problem for these firms is that much of the capital that has fallen outside the
PERE 50s five-year fundraising window has not been replaced with new equity or it
has been replaced at a slower rate and with a lesser amount. Meanwhile, a number of
firms have shifted their focus to strategies that are not included in the PERE 50 ranking, such as real estate debt, or have stopped raising their capital through traditional
closed-ended commingled funds in favor of other structures sought by LPs.
That said, some firms did find success with new vehicles over the past five quarters. Indeed, three of the biggest fundraisers over the past five quarters also happen
to be the biggest climbers in the PERE 50. Starwood Capital Group closed its latest
opportunity fund on $4.2 billion, which propelled the firm some 10 spots in the
ranking. Brookfield Asset Management, which is in the middle of marketing its first
global opportunity fund, moved up 14 spots on the strength of $2.63 billion in equity
raised so far. Last but not least, Fortress Investment Group also jumped 14 spots in
the ranking due largely to the success of its second Japan-focused fund, which closed
on $1.65 billion late last year.
In the face of all those changes, one thing did not change. The Blackstone Group
cemented its place as far and away the biggest capital-raiser in the PERE 50 ranking,
thanks to the $13.3 billion collected for its most-recent global offering, which is the
largest commingled real estate fund ever raised. Indeed, so big is that fund that, had
Blackstone not raised another penny over the past five years, the firm still would be
atop the ranking. As it is, it raised a total of nearly $32 billion, which is more than the
next four firm combined.
Looking at the PERE 50 as a whole, the cutoff for capital raised in order to make
this years ranking was $1.37 billion over the past five years. Obviously, that is much
less than the $2.21 billion cut-off of last year, when just 30 firms were ranked. However, if you look at just the top 30 firms this year, you will see that the cut-off for that
sub-group rose to $2.42 billion.
Meanwhile, the expansion of the ranking, as well as the aforementioned reshuffling
of firms, has opened the door for several new players to emerge. First-time members
of the PERE 50 include notable firms like CapitaLand, Oaktree Capital Management,
Niam, GTIS Partners and Crow Holdings, among others. In addition, there were five
firms $60 million or less from making the PERE 50, including Europa Capital Management and Iron Point Real Estate Partners. With the disappearance of 2008 funds
in next years ranking, it is a good bet that these firms will make the cut in 2014.
2013
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
Capital
Raised ($bn)
Legend:
$31.947
$7.868
$7.864
$7.709
$7.395
$7.340
$7.337
$5.626
$5.250
$5.200
$4.767
$4.181
$4.088
$4.055
$3.798
$3.531
$3.295
$3.295
$3.159
$3.068
$3.021
$2.992
$2.887
$2.809
$2.710
$2.604
$2.561
$2.541
$2.491
$2.420
$2,250
$2.211
$2.074
$1.952
$1.910
$1.899
$1.884
$1.864
$1.830
$1.791
$1.662
$1.649
$1.632
$1.629
$1.619
$1.518
$1.514
$1.411
$1.400
$1.370
2012
Rank
1
12
7
5
10
4
6
3
23
11
2
13
9
14
17
15
19
33
16
20
30
28
24
21
8
38
29
31
34
18
22
37
41
27
$192.876
PERE 50 debut
PERE 50 return
The Blackstone
Group
$31.947 billion
36
Even though it hasnt raised any new dedicated capital for real estate since 2011, Lone Star Funds still
makes it to the top three of the PERE 50 since it has managed
to raise roughly $7.86 billion in equity over the past five-plus
years. In fact, the John Grayken-led firm raised $5.5 billion
on behalf of Lone Star Real Estate Fund II alone, which along
with The Blackstone Groups Blackstone Real Estate Partners
VII fund helped keep the mega-fund alive following the global
Grayken: busy
financial crisis.
investing
Currently, Lone Star is busy buying up assets on behalf of
Fund II. For example, the Dallas-based investment firm bought
a distressed loan book valued at 900 million (1.1 billion; $1.4 billion) from Lloyds
Banking Group in late 2011 and agreed to buy the A and B notes of Excalibur,
Lehman Brothers 1.8 billion legacy securitized real estate debt portfolio, from
Deutsche Bundesbank last year. Most recently, in December, Lone Star agreed to
buy TLG Immobilien for 1.1 billion in what was one of the largest commercial
property transactions in Germany last year, as well as the first privatization in the
country since the onset of the global financial crisis.
At its current rate of investment, it appears as though it wont be long before
Lone Stars latest opportunistic fund will be fully invested. In fact, there are rumors that the firm could be back on the fundraising trail with its third real estate
fund within the coming year.
Last year, Colony Capital closed on $1.4 billion in base and co-investment capital for its latest debt fund, Colony Distressed Credit Fund
(CDCF) II. Despite being one of the largest fundraises of 2012, that capital did
not help the Los Angeles-based firm in the PERE 50 ranking, which does not
count debt vehicles towards its fundraising totals. Luckily, Colony was active
on the equity side of its business as well.
Helping to solidify Colonys position within the top five
of the PERE 50 ranking is Colony Realty Partners IV, which
held a first close on $225 million in equity at the end of last
year. More significantly, the firm raised a total of $2.24 billion in investor capital for Colony American Homes, its vehicle for purchasing portfolios of distressed single-family
homes across the US. The strategy there is to fix up those
properties and rent them out rather than sell them, and
Barrack: focusing
Colony anticipates amassing 10,000 to 15,000 homes by the
more on debt
middle of this year.
PERE understands that Colony, led by Tom Barrack, currently is focused on investing in debt rather than equity because of the greater
number of compelling deals in the debt space. In fact, so robust is the opportunity in debt that the firm is planning to launch a successor fund to CDCF II
sometime this year.
Over the past year or so, LaSalle Investment Management has focused its investment activity primarily on the US and the markets of Asia.
Consequently, the Chicago-based real estate investment managers recent fundraising activity has focused on those markets as well, with the firm raising
$50 million towards its $750 million target for LaSalle Asia Opportunity Fund
IV and $305 million against its $600 million goal for LaSalle Income & Growth
Fund VI.
In addition, LaSalle formed a $205 million separate account last year to provide liquidity to real estate ownership structures. The opportunistic vehicle,
named Salt River Investors after the river in Arizona, will focus on asset and
fund-level recapitalizations throughout the US, as well as secondary purchases
of joint venture or fund interests. The capital is flexible in structure and can
take the form of structured debt, preferred equity or common equity.
In terms of the firms recent activity in the Japanese market, it was revealed
earlier this year that LaSalle had put a portfolio of eight logistics properties
in the Tokyo and Osaka areas up for sale. The firm is looking to sell the assets
from its second logistics fund, LaSalle Japan Logistics Fund II, for approximately 95 billion (763.3 billion; $1.01 billion). Meanwhile, the firm is busy
raising equity for the latest fund in that series.
LaSalle established its Asia platform in 2000 and, as of April 2012, had approximately 180 staff and nearly $9 billion in assets under management in the
region. Last spring, the firms plans to focus on country-specific funds in Asia led
it to agree to relinquish its responsibility for the Asia Property Fund, the regions
first open-ended core fund. LaSalle launched the vehicle in 2007 with an initial
$600 million in assets alongside PRUPIM, which has agreed to assume sole
responsibility for managing the fund.
Tishman Speyer
$7.34 billion
HQ: New York
Founded: 1978
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10
How much does it cost to buy one of the biggest private equity real estate firms in terms of capital raised?
The answer might soon be known as MGPA, led by executive
chairman James Quille, is up for sale, with a deal imminent as
of press time.
One strong contender said to be in talks
to buy the platform is BlackRock, the New
York-based global asset manager that is
conspicuously absence from the PERE 50.
Indeed, PERE currently has the firm pegged
as the 95th largest in terms of opportunistic
real estate fundraising. Still, the big question is whether MGPA, under any new ownership, will be able to raise another fund of
Quille: under the
hammer
significant size.
For now, MGPA remains in the top 10 of
the PERE 50 thanks to two funds that closed in 2008 - MGPA Asia
Fund III and MGPA Europe Fund III, which raised $3.89 billion
and $1.309 billion, respectively. Since then, the firm has not
closed on a large opportunistic fund, although it has been in
the market with MGPA Europe Fund IV and MGPA Asien Spezialfonds, the latter of which collects capital from German and
Austrian investors for deployment in various Asian markets.
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12
14
13
Westbrook Partners
$4.088 billion
15
39
16
17
Shorenstein Properties
$3.295 billion
18
40
19
Fortress Investment
Group
$3.159 billion
20
TA Associates Realty
$3.068 billion
HQ: Boston / Founded: 1982
21
22
24
Northwood Investors
$2.809 billion
then you invest it. ROF V was largely invested with each closing.
With ROF V now fully invested, Oaktree is now focused on investing and raising ROF VI. The firm held a first close on
$255 million in equity during the third
quarter of 2012, followed by a second
close in January, which brought the funMarks: unusual
draising total to $426 million. The fund,
pace
which began investing in September, had
amassed $746 million in commitments at
press time and is expected to exceed its $1.5 billion target by
the time fundraising concludes this year.
23
25
41
26
Lubert-Adler Partners
$2.604 billion
27
29
42
28
Beacon Capital
Partners
$2.541 billion
30
Alpha Investment
Partners
$2.42 billion
31
DRA Advisors
$2.25 billion
It has been 18 years since New Yorkbased DRA Advisors raised $189 million for its first private equity real estate fund. The 70-strong firm evidently
has been doing the right things since then as today it is
a $1 billion-plus fund manager. Its latest vehicle, DRA
Growth and Income Fund VII, brought aboard $1 billion
in equity commitments in 2011. For that money, investors can expect DRA to target existing properties with
good cash flows and, predictably, an emphasis on coastal
markets. Nevertheless, the strategy marks a continuation for the firm, proving predictability is one thing its
investors do not mind.
33
ARA Asset
Management
$2.074 billion
34
Rockpoint Group
$1.952 billion
32
The lions share of KSL Capital Partners qualifying equity for the PERE 50 ranking comes from KSL Capital
Partners Fund III, which it closed
on $2 billion in 2011. The Denverbased firm focuses on acquisitions
of complex, operationally-intensive
businesses and strives to unlock
hidden value through re-envisioning and repositioning. Indeed, KSL
Grove Park Inn Resort
has been busy putting its strategy to
& Spa: KSL sees value
the test with recent investments in
markets such as North Carolina, where it purchased the historic
Grove Park Inn Resort & Spa for more than $100 million in April
2012. Its capital has a global appetite as well. Earlier this year, KSL
was linked to bids for UK fitness chain David Lloyd Leisure, having already snapped up boutique hotel companies Malmaison and
Hotel du Vin.
35
43
36
37
39
Cerberus Capital
Management $1.83 billion
44
38
GI Partners
$1.864 billion
40
GTIS Partners
$1.791 billion
41
42
Crow Holdings
$1.649 billion
44
Rockwood Capital
$1.629 billion
Rockwood Capital has raised just north of $1.6 billion over the last five years for its value-added real
estate strategy. In 2008, the White Plains, New
York-based firm collected $964 million for Rockwood Capital Real Estate Partners Fund VIII and,
more recently, followed up that effort with commitments of around $458 million so far for Fund IX. As
PERE reported, Rockwood is seeking $750 million
for its latest vehicle to invest in hotels, offices, residential and retail properties throughout the US that
are underperforming or suitable for redevelopment
or expansion. The firm launched the fund around
February of last year.
Williams Tower,
Boston: a landmark
investment
43
45
Berkshire Property
Advisors $1.619 billion
HQ: Boston / Founded: 1969
45
46
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vestors. Perhaps this is why the Chicagobased firm was able to raise nearly a half
billion dollars in just three months.
It also should be noted that Fund IV,
Merrill: niche
which is targeting between $600 million
player
and $700 million in equity, was launched
just a little more than 18 months after
Harrison Street closed its last commingled vehicle. In June
2011, Harrison Street Real Estate Partners III received more
than $595 million in commitments, exceeding its original
$500 million target.
Due to its prior investment funds, most of which closed in 2008 and 2011, GE Capital Real Estate makes its debut
on the PERE 50 list. Unfortunately, that honor may be short-lived as the Norwalk, Connecticut-based firm is in
the process of winding down its real estate equity investment management business. Witness the sale of the management contract
for its 240 million Polish Retail Fund to Valad Europe at the end of December and the departure of Jonathan Kern, its president of
global investment management, earlier this year. While GE Capital Real Estate plans to manage out a number of its current equity
holdings, the strategy going forward is to concentrate on the debt space.
48
46
49
50
Equity raised
(US$m)
Year of final
or interim
close
Firm
Fund name
$13,376.20
2012
$4,200.00
2013
$2,630.00
2012
Rockpoint Group
$1,951.80
2013
$1,650.00
2012
Westbrook Partners
$1,588.00
2012
TA Associates Realty
$1,575.00
2013
$1,265.00
2012
Patron Capital
Patron Capital IV
$1,155.36
2012
10
$1,100.00
2012
A buyers market
$14.8
$5.6
Blackstone
$5.3
$3.9
$5.3
Lone Star
Starwood Invesco Real LaSalle
Estate
Investment
Capital
Management
Group
$8
$7
$6
$5
$4
$3
$2
$1
$0
$7.4
$5.7
Blackstone
$5.1
Prudential
LaSalle
Investment Real Estate
Management Investors
$5.0
$4.8
Goldman
Sachs
Morgan
Stanley
Net results
With just a few exceptions, the firms of the PERE 50 engaged in both the buying and selling of real estate assets over the five
quarters since the start of 2012. Among net buyers, look no further than The Blackstone Group, with more than $7.4 billion in net
purchases. For net sellers, GE Capital led all firms with $3.7 billion in net sales.
$7.4
$3.8
$2.8
Blackstone
$2.1
$1.6
Lone Star
Starwood Invesco Real LaSalle
Estate
Investment
Capital
Management
Group
$4.0
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0
$3.7
$2.0
GE Capital
Real Estate
Goldman
Sachs
$2.0
$1.9
$1.6
AEW Capital
LaSalle
Prudential
Real Estate Investment Management
Investors Management
Data provider Real Capital Analytics has tracked the volume and value of property transactions for the PERE 50 firms from January 2012 to the end of March 2013.
The data is believed to be accurate but is not guaranteed. It includes direct property transactions only and covers activity by the parent companies as well as by a
firms dedicated real estate funds. Full deal credit is allocated to both joint venture partners. Real Capital Analytics, Inc. 2013. http://rcanalytics.com
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