Investment managers seeking to raise over USD1.0bn in equity capital for large cap opportunistic real estate fund strategies virtually disappeared off the map in the first half of 2010.

According to the latest research from Clerestory Capital, only one large cap fund was represented among the 31 new non-listed funds aiming to attract USD12.6bn in this period.

Joanne Douvas, co-founder and managing principal at Clerestory, says: “The research confirms the strong trend – identified at the start of the year – that opportunistic real estate funds are scaling down in size. There also appears to be significant churn in managers that come to the market but are not successful. However, managers with proven track records and the ability to execute are raising capital, as evidenced by the funds that have reached a final close during the first half of 2010.”

Overall, the total volume of capital raising targeted in opportunistic strategies has declined sharply this year from the second-half of 2009. Previously, there were a total of 91 funds seeking to raise USD72bn of equity versus 80 funds seeking to raise USD44bn of equity today. This decline was primarily due to a decrease in capital being sought by large-cap funds and a number of funds that were pulled from the market.

Clerestory defines SC-Opportunistic funds as those raising less than USD1.0bn of equity and LC-Opportunistic funds as those raising more than USD1.0bn of equity commitments. Of the 30 new SC-Opportunistic funds seeking USD11.3bn, and the single new LC-Opportunistic fund seeking USD1.5bn, over half (18 funds) are in the Americas. These funds are trying to raise USD7.6bn in equity.