The Real Deal Miami

Real estate funds receiving record investment post-crash

Blackstone, Starwood and other bigwigs getting lion's share of money

April 22, 2015 02:15PM

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From left: Blackstone's Jonathan Gray and Starwood's Barry Sternlicht

From left: Blackstone’s Jonathan Gray and Starwood’s Barry Sternlicht

From the New York website: Real estate funds are receiving more investment from pension funds, endowments and institutional investors than at any point since the property bust, with a few large firms collecting most of the spoils.

Investors have poured money into real estate in search of better returns than they would see from bonds, according to David Hodes of consultancy Hodes Weill & Associates.

Most of the money is going to private-equity firms with large real estate funds and strong track records, according to the Wall Street Journal. Funds of more than $1 billion accounted for 64 percent of all the capital raised this year – up from 31 percent in 2012, according to data tracker Preqin.

Blackstone Group recently reported annualized returns of 18 percent for its real estate funds launched since 1992, not including the one that just closed. The firm raised $14.5 billion for its most recent fund. Barry Sternlicht’s Starwood Capital Group recently raised $5.6 billion, according to the newspaper.

Overall, 210 global closed-end funds raised a post-bust record $97.7 billion in 2014, more than double the $46.8 billion raised in 2010. Funds pulled in a record $137.5 billion in 2008. [WSJ]Rey Mashayekhi