$4B PAG Vehicle Ranked Second Among Q1 Real Estate Fund Closings Globally

Despite funds targeting Asia Pacific markets accounting for just 20 of the 111 real estate investment vehicles closed in the first quarter of 2025, a strategy by Hong Kong- and Tokyo-based PAG ranked second globally in terms of capital wrapped up during the period.

Having rounded up $4 billion in commitments to exceed its $3.5 billion target by the time it reached a final close in February, PAG’s Secured Capital Real Estate Partners VIII ranked behind only Blackstone Real Estate Debt Strategies V among real estate fundraising conclusions in the first quarter of this year, according to data provider Realfin.

PAG’s fundraising for its SCREP VIII opportunistic vehicle outstripped the $2.75 billion that the company had raised for SCREP VII in 2020, despite Realfin reporting that the January-March period marked the third-lowest quarter for fundraising since 2015.

With much of the deployment for PAG’s SCREP series focused on the Japan market, the fund manager’s achievement for its SCREP VIII vehicle was already surpassed last month by North American fund manager BGO raising more than $5.1 billion for the final closing of its BGO Fund IV and related vehicles, with that strategy also targeting Japan, along with South Korea, Australia and Singapore.

Blackstone Leads, SC Capital Jumps to Top 10

Despite PAG’s feat, North American strategies dominated fundraising during the quarter, bringing in $12.76 billion in capital for 139 vehicles closed, London-based Realfin said in its State of the Market Report.

Europe ranked second with $4.35 billion raised for 12 funds, while Asia Pacific strategies garnered $1.29 billion across 20 vehicles. During the first three months of the year, global private real estate fundraising climbed 12.4 percent compared with the October-December period to reach $36.1 billion.

Among the first quarter’s top 10 final closings, Blackstone led the table by hitting the $8 billion target for BREDS V. The Manhattan-based player’s latest real estate debt fund makes loans and buys existing loans in North America, Europe and Australia, according to the Manhattan-based giant.

Also cracking the top 10, SC Capital Partners held a $900 million closing for its Japan-centric Real Estate Capital Asia Partners VI. The Singapore-based firm, which is 40 percent owned by Temasek-controlled CapitaLand Investment, launched RECAP VI in 2022 with a $1 billion target size, but the final amount was still enough for the ninth spot globally during the quarter.

Launches Ebb

With limited partners becoming more cautious, the number of fund launches during the period sank to 111, the lowest in a single quarter since 2016 and well below the 2021 peak, Realfin said. In line with the contraction in new ventures, the number of investment vehicles reaching a final close fell 26 percent to 180, the report said.

As the number of fund closings dwindled, the general partners who succeeded in reaching a final closing during the quarter were better rewarded for their efforts as the average fund size rose to $237 million from $160 million in the fourth quarter. Among those closings, opportunistic vehicles added $18 billion in commitments while value-add strategies drew $13.3 billion.

Limited partners poured $27.6 billion into diversified funds while industrial and retail vehicles saw a contraction compared with previous quarters, Realfin said. In terms of targeted capital, core fund launches jumped to $10.6 billion, the highest level since the second quarter of 2022.

“Diversified strategies attracted the highest share of capital in five years,” said Realfin co-founder and CEO Riz Malik.

Steady Deal Volume

Global GPs and LPs closed 1,304 real estate transactions in the first quarter, a slight increase compared with each individual quarter in 2024, when they saw an average of 1,117 deals per three-month period, according to the report.

“The growth corroborates anecdotal evidence of repricing taking place in the real estate market,” Realfin said. “However, deal volume is still lower compared to pre-pandemic levels, when the industry used to regularly close 2,000 transactions per month.”

While 75 percent of transactions in the quarter targeted North American assets, the distribution by sector was more balanced as office, residential, industrial and retail attracted similar levels of interest, the data provider said.