Commitments reach record high in 2022
Capital commitments from U.S. public pension funds to privately managed real estate vehicles totaled $64.9 billion in 2022, which is the largest annual fundraising volume since the inception of Ferguson Partners’ proprietary commitment database in 2011. The total commitment volume in 2022 increased 20% year over year, coming in well above the previous high watermark of $54.2 billion in 2021. Driving this uptick was a 16% increase in the number of unique commitments and a 3% increase in average commitment size over 2021. 2022 was a true tale of two cities, as the first half of the year saw unprecedented levels of capital raising. Coming off an extremely strong 2021, investors eagerly flocked to real estate to provide a hedge against inflation and diversify their portfolios with strong, stable returns. As a result, Q1 through Q3 led to some of the largest quarterly fundraising volumes seen in the history of FP’s commitment database.
However, geopolitical concerns, the inflationary environment, and rising cost of debt gave investors pause in a “wait and see” period as 2022 unfolded. In Q4 2022, fundraising was down 11% as compared to Q4 2021, underscoring investor caution as they waited for the typical economic indicators: actions from the Federal Reserve to fight inflation, labor reports, and trends in the stock market and bond yields.
To continue reading, download a PDF of the 2022 Fundraising Year in Review.
For additional information, please contact Scott McIntosh.