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

0 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

NorthAmerica

Asia-Pacific

LatinAmerica

100

90

80

70

60

50

40

30

20

10

0 32%

15%

14%

10%

29%

$156.9bnTotal capital raised

for the RED 50

$3.1bnAverage 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

0

5

10

15

20

25

30

35

40

45

0

10

20

30

40

50

60

70

80

90

2015 2016 2017 2018 2019

Ca

pit

al r

ais

ed

($

bn

)

Nu

mb

er

of

fun

ds

clo

sed

Capital raised ($bn) Number of funds closed

600

500

400

300

200

100

0

2015 2016 2017 2018 2019F

un

d s

ize

($

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, thoughto learn where capital

providers and managers are seeking fresh pockets

of value

CLICK HERE

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

0 $27.03bn

$14.96bn

$7.45bn

$4.92bn

Ca

pit

al t

arg

ete

d (

$b

n)

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 EditorPEREjames.l@peimedia.com

Design: Miriam Vysna

Production: Adam Koppeser