What's changed for real estate debt? There's a shakeup at the top of - - PowerPoint PPT Presentation

RE DEBT IN 8 SLIDES

What's changed for real estate debt?

There's a shakeup at the top of the RED 50

Source: PERE

2020 2019 AXA IM – Real Assets Blackstone PGIM Real Estate Cerberus Capital Management Intermediate Capital Group AllianceBernstein M&G Investments Goldman Sachs Merchant Banking Division Bridge Investment Group ACORE Capital PCCP Mack Real Estate Credit Strategies Oaktree Capital Management 2 4 6 8 10 12 14 16 18 20

Capital raised ($bn)

Our second annual real estate debt fund manager ranking shows a new real estate debt fundraising champion. While Blackstone took the crown in our first list, number one this time is Europe’s AXA Investment Managers – Real Assets, with almost $20 billion raised. The RED 50 is based on the capital raised for debt issuance funds between 2015 and 2019.

With a record $157bn raised by the RED 50, the share accounted for by North American firms – particularly those headquartered in New York – is sizable

But North America (and New York) still dominate

All real estate debt fundraising, by manager HQ, 2015-19 RED 50: New York-based firms raised 32% of the ranking's capital

for the full RED 50 ranking and profiles of top managers

CLICK HERE

Source: PERE Source: PERE

Europe North America Asia- Pacific Latin America

100 90 80 70 60 50 40 30 20 10 32% 15% 14% 10% 29%

$156.9bn

Total capital raised for the RED 50

$3.1bn

Average capital raised

62.4%

Total capital raised by North American firms

The decline in real estate debt capital raised has continued since a record-breaking 2017, although average fund sizes are holding up well

The 2017 fundraising peak hasn't been matched

Real estate debt fundraising 2015-19 Average size of real estate debt funds that reached final close

to see how fundraising in Europe and Asia-Pacific is catching up to North America

CLICK HERE

Source: PERE Source: PERE

5 10 15 20 25 30 35 40 45 10 20 30 40 50 60 70 80 90 2015 2016 2017 2018 2019

Capital raised ($bn) Number of funds closed

Capital raised ($bn) Number of funds closed 600 500 400 300 200 100 2015 2016 2017 2018 2019

Fund size ($m)

No private real estate debt fund since Blackstone Real Estate Debt Strategies II's final close in July 2015 has been bigger

...and Blackstone's 2015 fund remains unsurpassed

Top 10 funds closed January 1, 2015 to December 21, 2019

to read how strong institutional demand for risk plays into the hands of non-bank property lenders

CLICK HERE

Source: PERE

Manager HQ: US France Canada

Investment in real estate debt can benefit as the coronavirus and late-cycle considerations prompt a turn to lower-risk strategies

There are new frontiers on the horizon, though

to learn where capital providers and managers are seeking fresh pockets

• f value

CLICK HERE

US capital is looking to invest in Europe, where investors see better risk- adjusted returns because

• f higher pricing

Todd Sammann, head of credit strategies, CBRE

We have seen a proliferation of new funds in the US – 150 over the last three years and $100 billion-plus of capital allocated to credit

Michael Kavanau, head of debt and structured finance for EMEA, JLL

Higher returns from development: the London Olympia redevelopment is being financed by a loan from Goldman Sachs

Debt vehicles in market are expected to attract almost $55bn, with North American funds accounting for approximately half of that

...and funds in market are aiming high

Source: PERE

Top 10 real estate debt funds in market by target size (January 1, 2020)

55 50 45 40 35 30 25 20 15 10 5 $27.03bn $14.96bn $7.45bn $4.92bn

Capital targeted ($bn)

Region targeted: North America Multi-regional Europe

Capital targeted by region

This report was compiled from data collected for PERE's Debt Report published in May 2020.

James Linacre Special Projects Editor PERE james.l@peimedia.com Design: Miriam Vysna Production: Adam Koppeser