With its worldwide market share rising to 40.8% in Q1 2010 from18.3% in 1Q09, Europe has become the top destination as investorscontinue to avoid the US despite early signs of recovery there. Thenews comes despite negative macroeconomic news from some EUcountries, said Swisslake. Yields in many European centres havereversed and rental prices are stabilising. Banks are alsoincreasingly prepared to provide financing to support fundmanagers' activities.

However, with 55 new REPE funds, there were 17.9% fewerworldwide in 1Q10 than in 1Q09 and 35% fewer than in 4Q09. At$19.9bn, fund volume was 33.3% below 1Q09 and 38.3% below 4Q09,highlighting the current cautious environment. Swisslake reportedthat many funds from 2009 were only partially placed and were inessence blocking the pipeline for new issues.

The average fund size over the last four quarters ranged between$350 million and $400 million, and seemed to document thecautiousness of investors on side and the readiness on the otherside of smaller more specialised fund managers to grow.