DALLAS-Investment fundsfocused on distressed assets – so-called “vulture” funds – arehaving a hard time deploying capital since the bulk of distresseddeals are smaller than $5 million.

Al Pontius, senior vice president and managing director ofMarcus & Millichap, made the observation during the2^nd Annual RealShare Distressed Assets conference hereat The Adolphus Hotel. Produced by ALM-Real Estate Media Group, theconference attracted more than 350 executives who were eager tohear about the current state of the distressed market.

Pontius, who gave a special address titled “Three Years into theCapital Markets Meltdown: Where are we now and where are wegoing?”, noted that both international and domestic funds haveraised billions of dollars to take advantage of distressed assetsin the United States. “These funds represent a tremendous amount ofinvestment capital, yet their money is not earmarked for smallerproperties,” he pointed out. “They’re looking for larger deals, andthose are hard to come by.”