Capital raised for European real estate debt funds in the first quarter of the year has already beaten the total raised in 2013, according to Preqin.
With a record amount (53) of debt funds in the market, Preqin said $13.2bn has already been raised in the first three months of this year for the strategy. Overall, last year saw $12.2bn raised for debt funds, when north American investors accounted for 68% of total capital raised.
鈥淔undraising for debt fund appears to be gaining momentum as investor confidence in the strategy increases,鈥� Preqin said.
For Europe-focused closed-ended funds, the quarter was the most successful since mid-2007, with a record 鈧�8.8bn raised.
Blackstone Real Estate Partners made a significant contribution to the quarterly total, with its Europe IV raising 鈧�5.1bn and accounting for 58% of the total. In all, nine funds closed in Q1, including Tristan Capital Partners with 鈧�950m for its Special Opportunities III fund and M&G Investments鈥� Debt Fund III at 拢750m.
North American investors are set to further increase their exposure to Europe this year, with over a third predicted to commit to funds targeting Europe in the next 12 months, up from 17% in Q3 2013. Commitments from Asia-based investors will also rise, up from 39% six months ago to 60%.
鈥淭hese investors look to take advantage of the wide range of distressed opportunities in the region, and the growing prominence of Europe-focused debt funds,鈥� Preqin said, adding that there are 鈥渟trong indications鈥� that European funds will continue to attract commitments this year.
Preqin said the last 12 months have seen considerable appetite for Europe-focused funds, with 鈧�16.4bn raised, more than double the 鈧�6.7bn recorded鈥╥n the previous 12 months.
Opportunistic or value-added strategies were most popular in Q1, with both recording 11 closings, followed by debt.
The number of Europe-focused funds has fallen, however. Preqin identified 98 Europe-focused closed-end private real estate funds as of April, a fall from the 107 recorded at the end of 2013. More capital, Preqin said, is being targeted by fewer funds.
