The success of Blackstone Real Estate Partners VIII significantly attributed to the positive results of 28 close-end real estate funds in the fourth quarter of 2012.
Blackstone (BX) contributed $13.3 billion to the final close of $22.6 billion for the quarter, compared to $10.7 billion raised from the previous quarter, according to data source and intelligence provider Preqin, which monitors private equity and real estate markets.
The New York investment firm had a noteworthy year including the purchase of more than 500 properties, or up to 40 homes per week.
Other significant fund closes took place as well including Westbrook Partners raising $1.6 billion for Westbrook Real Estate Fund IX and CBRE Global Investors (CBG), which raised $1.1 billion for CBRE Strategic Partners US Value 6.
Funds with a primary focus on the United States raised the most capital for the quarter, with 12 funds targeting the region, raising an aggregate $17.9 billion in capital commitments.
"While the number and aggregate target of funds in market fell during Q4 2012, the fundraising market remains crowded and very competitive," Andrew Moylan of Prequin noted in a company blog.
There are 451 funds in the market, targeting an aggregate $148 billion. As a result, 2012 was a challenging year for private real estate fundraising, with $54.4 billion raised by funds that closed during the year.
Thus, it remained difficult to raise capital despite the notable fundraising successes, including the final close of the largest ever close-end real estate fund.
Click on the chart to view the largest close-end private real estate funds of funds closed.
Nonetheless, 2013 is forecasting encouraging signs for fundraising, with 53% of investors planning to make new commitments in the coming year, up from 36% last year.
"Despite this increase in investor appetite, it is likely that there will not be enough capital available for all 451 funds on the road to raise their target amounts of capital successfully, and it will remain extremely difficult for those managers seeking to raise real estate funds in 2013 to stand out from the crowd," Moylan stated.