Executive summary
Real estate fund managers struggle to wrap up fundraising
Despite an uptick in capital raised from global investors, private real estate funds are still struggling to recover to historic averages. At $77.1 billion, H1 2025 was the second-lowest half-year for global real estate fundraising in the past 10 years, according to Realfin.
The number of investment vehicles to hold a final close declined significantly, confirming a trend in asset concentration that was recorded in previous quarters. Compared to H2 2024, when 428 funds held a final close, only 226 funds wrapped up capital raising, with Blackstone leading the pack with two mega-funds.
Moreover, the top ten final closes attracted $42.2 billion, more than half of total investor commitments raised in the first six months of the year.
Opportunistic and value-add investment strategies attracted the lion’s share of investor commitments, continuing a trend that has been underway for a few years at the expense of core and core-plus vehicles. Overall, opportunistic, value-add, and funds raised accounted for 64.5% of total fundraising in H1 2025, followed by debt funds.
The sector breakdown was similarly skewed, with diversified funds attracting the highest share of capital (80%) in the last 10 years, at the expense of dedicated funds. Residential real estate suffered the most notable contraction, dropping from $22.2 billion to $7 billion in the last 12 months.
Fewer fund debuts despite mega launches
Several established fund managers launched multi-billion-dollar funds in H12025, but that only widened the gap between the haves and have-nots.
While the industry saw, for example, the launches of Related Digital, which is targeting $8 billion, Blue Owl’s latest value-add strategy, targeting $6.5 billion, and Nordic Real Estate Partners’ sixth value-add fund, targeting $3.6 billion, global fund managers launched 243 funds in the first half of the year while targeting $74 billion in investor commitments.
That is the lowest number of real estate fund launches and the lowest amount of targeted capital since H2 2017, continuing a negative trend started in the wake of the recent pandemic.
Meanwhile, the distribution of fund launches in H1 by strategy and sector was in line with H2 2024. Value-add and opportunistic debuts targeting a diversified range of sectors represented the overwhelming majority of launches in the first six months of the year.
Core extinction
Core funds are the obvious losers in H1 2025, as they attracted $2.7 billion of capital commitments from investors, the lowest number in the last 10 years.
80 core funds reached a final close, reflecting a negative picture, but not the lowest amount seen in the same time frame.
The average final close size for this type of strategy was only $35 million, another negative record.
Expectedly, opportunistic and value-add funds were the winners. Opportunistic fundraising recorded its highest levels since H1 2023, as fund managers attracted $43.9 billion in allocator commitments.
The uptick was possible despite a historical drop in terms of funds reaching final close, with only 57 investment vehicles of this strategy wrapping up capital raising in the first six months of the year.
The average final close size for opportunistic funds was $844 million, the highest number recorded in the past 10 years.
While performing negatively compared to the previous half-year periods, value-add funds still raised $24.6 billion in capital commitments from international investors.
Finally, debt funds performed positively in H1 2025, with $26 billion of capital raised by 21 funds.
Debt funds continued the fundraising growth seen since H1 2023, with the average final close size ballooning to $1.6 billion, by far the biggest increase in private real estate capital raising.
