Latest fundraising data: volumes fall but less time is spent on the road

[Music] Hello and welcome to the Parry Podcast. I'm Lucy Scott and in today's episode we're taking a deep dive into global real estate fundraising in the first quarter of 2026 using preliminary data from our latest fundraising report, which will be published in the coming days. Now as I record this, the final numbers are being cronest, but the headline takeaways are in place, so we can talk about some of the trends that we're seeing. This is a market in a better place relative to a few years ago, but it's not exactly rebounding sharply either. In the first quarter of 2026, managers raised just under $44 billion, which is down from $81.4 billion in the same period last year. That decline partly reflects the absence of the mega fundraisers we saw in early 2025, and it also highlights a market that's becoming more selective, more targeted, and more cautious about risk. Among other key points, a value-adstrategies accounting for more than half of all the capital raised this quarter. Opportunistic capital, which dominated fundraising in recent years, has taken a bit of a step back in the first three months of this year. Meanwhile, debt remains an important part of the mix. We're also seeing clear sector preferences emerging. And despite the slow pace of fundraising overall in recent years, funds are closing faster and more, at this point, are hitting or exceeding their target sizes. So what does all these tell us about investor confidence, risk appetite, and where capital is really heading next? And what lessons should managers take from these numbers as they look to raise capital in a still uncertain environment? To unpack the data and the trends behind it, I'm joined today by Christina Shevchenkova, research manager at PEI, who has been working on the data behind this report. Alongside Kristi Owl and Daniel Cunningham from our editorial team, who are here to talk me through the trends driving the numbers. Hello and welcome. Before we talk about the trends driving the data, I think it would be interesting to kick off with you, Christina, talking about what this data actually captures. So before we get into those conclusions, can you quickly explain what the data set covers and what listeners should their reminders they interpret the figures? Absolutely. So the data essentially covers market updates as of Q1, 2026. Essentially report could be broken down into two parts. First being funds and market where we specifically look into top 10 funds currently in market, based on target size and regional fundraising also based on target size. And the second portion are essentially updates on capital raised by close ended funds, breaking data down by strategy, time on route, proportions of funds meeting their target, capital raised by region, sector specific fundraising, proportion of capital raised by strategy, and lastly year on year fundraising and of course top 10 funds. Perfect. Thank you. So I had a look at the data yesterday and from what I can see from the latest numbers, the headline trends for this quarter, we've got value add strategies accounting for more than half of all capital raised, that's far above any other strategy, opportunistic strategies which dominated in 2023 making up a much smaller share so far this year. And debt remains obviously present in fundraising strategies, but it's not the headline story this quarter. Can you take us through these numbers and explain what's been happening around those stats? Absolutely. That is absolutely correct. In Q1, 2026, value add funds raised about one billion compared to the second most popular strategy which is opportunistic and the funds they are raised about 800 million. That is a pretty significant development, although value add funds were always sort of significant compared to Q1 2025 for the funds raised 17% of total capital and in the year 2025, the strategy raised overall 24% of total capital, the shift of 53% in Q1 is pretty interesting to see and this essentially ties down pretty well with the opportunistic strategy. This strategy was a dominant one essentially ever since 2022 with the short break in 2024 where value add and debt strategies essentially took over and became the more dominant ones. However, it's worth noting that this year's shift is very interesting. In Q1, 2026 opportunistic strategy raised 15% of total capital compared to 33% raised in 2025. In Q1, 2023, the all time height 38%, which is still pretty significant compared to 53% before mentioned with value add funds. What is interesting here is specifically where we look into not only sort of year on year fundraising friends but also historically speaking as mentioning ever since 2022 opportunistic strategy being the dominant ones. What is interesting when it comes to that is that not only sort of decreased, we've seen 26% as of Q1 2025 or if we consider the full year of 2025, 28%, specifically going to that funds, we do see a slight decrease to 18% in Q1, 2026. Even considering 2024 where that strategy was at all time high at 31% raised of total capital, there is still a level of decrease. What is however more interesting I think on that allocation specifically is that the current percentage is more in alignment with 2021 to 2023 trends where a Dutch strategy accounted for about 22 to 18% of total capital raised. Thank you so much and we'll get into some of the driving factors that say behind that in a bit. Can you talk us through the trends in terms of sectors? So very strong fundraising for industrial focus strategies and data centers, also very popular and then I can see that office and retail strategies register barely anything in those early figures. Can you talk us through what this represents? Absolutely. I'd say there is a significant shift to industrial fundraising, specifically looking at a comparison with previous years where multifamily residential, the top spot with industrial as being responsible for essentially a bit over a half of multifamily and residential fundraising. As of 2021, not only industrial sector is the dominant one percentage wise, the sector jumped from 21% in 2025 to 40% as of 2021, 2026. And as you mentioned in regards to data centers, which is widely discussed topic as of last year, as of now we do see a slight decrease in data. So essentially going from 24% in 2025 to current 21% in key 1226. However, I do want to point out that the year 2025 was very significant for data centers. We went from 3% in 2024 to 24% in 2025. So specifically in this regard, I would say very still early in the year, but it is something to keep an eye out for. And as you mentioned fully correct when it comes to office and retail, they've been even in the past few years, sort of on the lower end of fundraising, specifically what we see in the offices is a steady decrease in 2024. Officers accounted for about 6% of total fundraising, decreasing to 2% in 2025 and now going to 1% as of key 1226. When it comes to retail, it is a little different. Even considering 2023 to 2024, retail accounted for about 1% of total fundraising, with sleigh increase in 2025 to 4% and now going back to 1% in key 1226. But you're absolutely right, they are on the lower end of the fundraising. Thank you so much for that, Chris, you know, that's a super summary of the day that you've got together. I mean, if listeners remember just one data point from the figures you've collected for this course, what do you think it should be and why? I mean, something that hasn't been covered yet, but although I do think the point on Valiet, shift and opportunistic is really important, especially considering sort of the risk profile. One thing to keep in mind is the recent data on the proportion of close-ended funds that might target size at final close. What we see now is a level of positive development compared to 2024 in 2025 and as of key 1226, more funds are either closing on or above target. In 2024, about 64% of funds close below target compared to 48% in 2025 and 29% as of key 1226, so I want it to kind of end it on a positive note here. That is very positive and time on the road as well. It looks like that's very much improving, which we can come onto, but did you have any thoughts on that statistic? Yes, so we did see an increase, essentially, from 2021, right, it won 15, 19, 20, 24, 25 and then back to 19. So, yes, there is absolutely positive development when it comes to data on time on the road. That's great. Thank you so much, Christina. So, bringing Christine and Dan in here, I mean, the data sort of tells us that capital is definitely moving into funds just a little bit more carefully. Christine, when you look at this data set, what is this key story for you? I think the biggest and the most obvious takeaway is the notable drop in total from raising figure. We saw 43.96 billion raised in the first quarter of 2026, which is really a steep decline from the 88 billion we saw in Q1 last year. And if you look under the hook, this is because Q1 2025 saw significant capital raised from profile and blast. which contributed for about 34 billion of capital. So that makes a difference there. And apart from the drop that we are seeing in overall fundraising figure, the funds that occur in the market in Kewan 2026 are targeting much smaller sizes. The largest fund out there right now in the market is Star With Opportunity Fund, which is targeting 10 billion. And that is the only double digit billion fund available. After Star With, it drops immediately to Blue House fund targeting around 6 billion, and then the rest are mostly aiming for 3 to 4 billion. Compared that to I think Kewan last year where we had something like 15 billion targeted up from Brookfield, 10 billion from Star With and other massive megafonds, that is the Star Contrast Day. So going forward, you do want to keep an eye out on whether there will be a softening in fundraising going forward. So just to be clear, Kristy, the figure this quarter has that what is Brookfield and Blackstone's contribution to that, if any. With felt Brookfield and Blackstone, I think we have around 40 billion. But with Brookfield and Blackstone, if they have any contribution right now is standing at around 43. So very small difference. Yeah, so it is still down despite that. So that's super interesting about those smaller fund sizes. Can you unpack what's going on there and why managers are targeting those smaller amounts? I think the smaller sizes in the market right now can be largely attributed to the fact that a lot of the big funds were close at the end of last year 2025. For example, Brookfield raised 16 billion last year, 11 billion by Blackstone, 9 billion by Carlaw. So right now most of the funds are in the market that are still fundraising, are targeting at a size around 3 to 4 billion. Except that of Star With, who is targeting 10 billion. And like I said, it immediately drops to Booh up Blue Al, who has around 6 billion in target. But contrast to the last year when at the beginning of the year you have all the, you know, over 10 billion mega funds. Yeah, yeah. And as there are differences in terms of strategies with the, those funds that were raising the big numbers to compare to now. Are the ones in the market now much more targeted at specific sectors or geographies? Interestingly, in terms of the strategy, you actually see a pretty even split within the funds in the market. You have four value at funds, three opportunistic and three debt funds in, you know, the top 10. But then last year I think it was really dominated by opportunistic funds. So as you say value ad is, you know, doing a lot of the heavy lifting according to the figures. Strategically, what do you think is going on there? And what does this tell us about where we are in the market? Okay. So if you look at the data right now, when you say value at fund are doing the heavy lifting, I think you're referring to how much value at funds have, you know, obviously capture in the first quarter of 2026. Yes, value at fund has capture a massive amount of 53% of the total capital raised in Q1. Because six of the top 10 largest fund closest quarter was, you know, value at like the digital reality DC partner funds. But like I said, if you look back at 2025 opportunistic fund dominated the landscape. We saw all the mega funds targeting hat, you know, had an opportunistic strategy. So a lot of that opportunistic capital, I think was already, you know, they already found its home last year. And looking ahead in the funds in the market right now, it's a mix back. You see a mix of value at an opportunistic and some debt fund. So I wouldn't say value at it's dominating the landscape. It's more about what we are just seeing in Q1 for now. Yeah. Dana, I want to, thanks for that, Christie. I want to bring you in now. The figures for debt, Christina correct me from wrong, but we have 18% of the total real estate fundraising in quarter one 2026 was for debt compared to 26% in quarter one 2025. So that is quarter on quarter, but if you look at annual figures, it is showing trending down to so in 2025 debt took a 27% share down from 31% the previous year. So Dan, are you surprised by those numbers? What do you read into this if anything? I wouldn't say I'm hugely surprised. I think with the debt side of the industry, there are fewer managers than on the equity side. And a lot of the fundraising activity depends on where those managers are in their fundraising cycle. So, you know, you've got a leading cohort who would tend to raise bigger funds and if they've raised in a previous quarter and in the deployment phase, obviously that's going to have an impact. So there's a lot of reasons why there may be that, you know, that sort of fluctuation or that drop in fund raising. And I think also there are plenty of managers on the debt side who have raised, you know, everybody I speak to in the market says there's a lot of liquidity. And they're talking about the bank side as well, but, you know, on the debt front side, people consistently tell me for our lenders out there trying to do deals and competing hard for deals. So maybe an element of this is that people have raised money, but it's difficult to deploy. And they're trying to find the right deals to suit the risk appetites or what they've promised to their investors. So there may be an element of the market, the lending market being a bit slower because there are fewer acquisitions to finance. And that may be having an impact on the timeline of people deploying, which obviously feeds into when they go back out to market to raise. So there are probably a lot of reasons why there's that drop off in debt. And a little cautious to draw the conclusion that there's been a shift into debt in the last few years and now people are sort of coming out of it. I'm sure there's an element of that going on, especially, you know, these investors who are chasing higher yielding investments. In the last few years, debts look like a safer and on a relative basis, more rewarding thing to be in, but equity in a lot of cases. I'm sure there was an element of the fundraising market impacted by that. And yes, some will have moved on and thought equities now back on the up. So let's reallocate and look at more equity with debt. You know, I am sure that will play some role, but underlying that on the debt side, there's actually quite a consistent investor base. And there's a lot of investors who aren't really looking at should have switched equity to debt. It's more looking at real estate debt as almost like a fixed income alternative. And the uplifting that you can earn on real estate debt, you know, it's compared to corporates, for instance. And that sort of investor won't be pivoting year by year between equity and debt. So there is that consistent base of investors. I mean, I think there's a lot of factors at play, but I see debt as a relatively stable part of a picture. The slice of a pie, which is, you know, it's always going to be there. It's grown. It's been a growth story over certainly a decade or, you know, 15 years. And it's a relatively consistent part of a fundraising market. I was interested to hear what you said, Christine, or about the percentage shifting almost back to, I think you said, pre-22. That was really interesting. Yes, it's essentially from 2021 to 2023. So I guess I will kind of echo what you just mentioned with dad being kind of a stable portion. It does seem like so because there was a significant jump in 2024, right, to 31%. And then steady decrease considering 2025 to what we usually saw or what we saw before, right, in key 1226. Yeah, yeah. So that does indicate there was a bit of a movement into debt as interest rates were high and equity values were low. So I'm sure that did play a part and maybe, you know, the lower percentage now reflects some capital coming out. But I do think it's all relative and beneath that there is this more consistent investor base and demand for real estate debt. So I want to see a question Lucy. I'm not hugely surprised. I think there are these ebbs and flows in the market. But it's a relatively stable part of a picture in general terms. Thanks to that and interesting what you say about the number of managers I want to sort of come on to what the current data tells us about where capital is concentrating, whether you know it's concentrating with fewer managers than before. And what that means with people who are left behind. Kristi, do you have some thoughts on that? I think interestingly the Q1 data pushes back against that narrative. We are actually seeing a pretty even distribution right now. So for the funds that close in Q1 only aries had two funds on the list. And the closing sizes range from around 1 billion to slightly over 3 billion. So you don't really see any, you know, 10 billion funds over there. This scene goes for funds currently that are in the market. market. Apart from TPG, which has two funds raising capital among the top 10 funds that are in the market, the rest are really managed by a diverse group of firms. And apart from back 10 billion looking for by Starboard and the 6 billion by Blue Owl, the rest of the funds are ranging between 3 to 4 billion. Again, it's quite even. So I think the error of giants, Megafund, dominated dominating the market like it was in 2025. It's not really applicable or it's not what we are seeing right now in 2026. You have any thoughts, Christy, on what is going on with investors there, why they might be looking at these smaller funds? Or is it just simply that there were a lot of close last year, as you said, and now there are those smaller ones in the market? I think that was definitely one of the reason. And I think the other reason could be the fact that investors now are perhaps looking for, you know, a more niche strategy. And with those strategy, you probably are not able to raise a template and fund. That's just my guess on that. So perhaps setting a smaller, more realistic target with a niche strategy, that's what a lot of managers are trying to do right now. If you look at the funds that were closed in Q1, 2026, a lot of it, they are sector specific. You have three industrial funds and then you have the biggest funds closed in Q1 is the data center funds that was raised by digital reality. And then you have also two multifamily funds. So that seems like it's the equation for Q1. But of course, it's really too early to tell at this point. Fantastic. Thanks, Kristi. So if you're a manager's trying to raise capital right now, is there any lessons from this data that they should be taking note of? I think right now it's too early to call it a recovery or call it a drop because we only have one quarter of data right now. And I think one thing that we all have to bear in mind is that the ongoing events in the Middle East that really started in late February. It will likely impact the long term fundraising sentiment for the rest of 2026. So right now the data is giving you kind of mixed signal. Yes, you see a drop in that total volume. But at the same time, the average time it takes for a fund to close has improved significantly, you know, from 25 months last year to only 19 months. So yes, just keep in mind that many of the funds that close in Q1 finalize their commitment before what happened in February. GP just probably want to stay flexible and see how the macroeconomics unfolding. Yeah, so not perhaps we can't draw too many conclusions from that time on the road data point. Dan, did you have any thoughts on any insights from the data that I did manage of these days might be interested in? Well, ad echo what Christy says. It is very early to tell what the overall fundraising for the year will look like. There's a lot going on with the around situation. Like Christy says, you know, the timing of that would probably yet to see the effects on fundraising. I think generally last year it seemed for us momentum building overall for fundraising. I'm not just talking debt here across the whole picture. That momentum may have been lost to a degree. So I mean on the debt side, the investor base is still out there. The market is very competitive to lend. And I think for a lot of managers feeling, you know, frustrated almost, that they want to be doing more. They feel real estate debts in a good place at the moment. So I think managers will still be very keen to be raising, but we'll be investor demand for all the different strategies that debt brings. But people are waiting for that underlying lending market to really sort of generate more activity. They'll come down to the acquisition's market improving. So I mean, it's hard to see that from the figures, but just as a general statement, I think just demand for private real estate debt side of things. Maybe it's a challenge to deploy the capital, you know, and probably will be for rest of the year. Yeah, absolutely. Christy, I don't know if you wanted to chip in there on how the current events in the Middle East might impact some of the data that you're collecting. Generally, do you have thoughts on that? I mean, this is a really tough question because usually we don't necessarily use our data to argue political events, but absolutely, I would agree with Dan and Christy, we will see events of Middle East developing all throughout the year. And the trends that we see in Q1 might potentially change quite significantly, so moving forward. It's really tough to guess what's going to happen all throughout this year. Yes, I was in everyone else, I think. So thank you so much, everyone. Kristina, Kristy and Dan, thank you for joining me and for your insights. Thank you. Thanks Lucy. Thanks, Lucy. So to leave you with three data points that really sum up where the market is right now, number one, funds are closing faster and a growing proportion are now meeting or exceeding their targets. This is a quiet but meaningful sign that fundraising conditions are stabilising. Number two, let's address scale. Around $44 billion was raised globally in the first quarter of 2026, down year on year, but still evidence that capital is moving, even if it's doing so more selectively and without the mega fund distortions of last year. And number three, strategy. Value I had accounted for more than half of all capital raised, marking a clear shift at the quarter one stage away from the opportunistic dominance we saw in recent years. Taken together, the picture isn't one of full recovery, but it is a market that's finding its footing. That's all for today. Thanks to Kristina, Kristy and Dan for joining me, and thank you for listening to the Parry Podcast. We'll be back soon with more insight into the capital-shaking global real estate. We'll see you next time.