Q2 fundraising total pales in comparison to record-setting Q1

After a first quarter that registered 27 fund closings and a record volume of $63.0 billion, it’s not a surprise that second-quarter fundraising experienced a significant drop-off. A total of 23 funds reported final closings during the April–June period, raising an aggregate of $19.1 billion. The total marked the lowest second quarter production since 2013, when fundraising totaled $18.2 billion.

In fact, the second quarter dollar total was just slightly above Blackstone’s first-quarter headline-grabbing record-setting total of $17.3 billion for its Blackstone Real Estate Partners IX. The second quarter volume was also below the average quarterly volume of $27.2 billion recorded during the eight quarters in 2017–2018.

However, despite the second-quarter slowdown, all indications are that real estate remains high on investors’ lists across the globe, as it continues to provide portfolio diversification, solid income and an attractive risk-return profile.

The first-half 2019 fundraising total of $82.1 billion is slightly behind the first-half total of $82.2 billion posted during 2008, which holds the record for 12-month fundraising volume at $134.9 billion. In the first six months of 2018, by comparison, fund sponsors accumulated a total of $57.9 billion in 73 fund closings. In addition, a total of 15 mega-funds closed during the first half of 2019, which means the 12-month figure could top last year’s record total of 30 mega-funds.

Four mega-funds held closings during the second quarter, raising a collective $9.9 billion and representing 53.7 percent of the quarterly total volume.

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