Capital raising difficulties abound: Q2 2012 NAREIM/FPL Pulse Survey Report
It’s no secret that today’s capital raising environment is challenging. Aggregate high-yield fundraising by U.S. managers has averaged $34 billion annually over the past three years, down signifi cantly from the high of $101 billion in 2008. Though the number of active managers has also declined, the ratio of managers to capital raised has increased substantially making this one of the most competitive markets for capital in recent history.
It is against this backdrop that this quarter’s NAREIM/FPL Associates Pulse Survey asked participants what strategies they are implementing to stay competitive in today’s challenging environment ‒ and the answers were fascinating.
Simply put, managers are being forced to alter their approach from what has traditionally worked. Many are doing the exact things one would think: upgrading marketing staff (quality or numbers), expanding their client base to include a broader set of investors, expanding product expertise to new asset classes, increasing co-investment capital to align the interests of the firm with those of investors, or deceasing overhead to maintain profitability despite lower levels of capital being put to work. Survey responses also uncovered several unique competitive tactics that some managers have implemented to better position themselves for success in this market.← Demographics, New Assumptions Drive Commercial Real Estate Increased Urbanization Affects CRE Investment Strategies →