US Managers Lead for PE Fund Performance

NEW YORK CITY—Private equity real estate may be a global endeavor, but the most consistent performers among fund managers in the sector are based in the US. So says Preqin, headquartered here and in London, which ranked fund managers that have most consistently outperformed their peers, listing 21 US firms among the 26 worldwide that made the cut.

Although by virtue of its scale the Blackstone Group led with the largest number of funds in the first quartile—six of its funds made the top ranking—the most consistent performer among fund managers this year was JBG Cos. of Chevy Chase, MD. Three others achieved a perfect score of 1.00: San Francisco-based Carmel Partners, Belmont, CA-based Embarcadero Capital Partners and Atlanta-based Centennial Holdings.

The ranking of fund managers is based on a quartile ranking for each of their closed-ends, based on the funds' performance of the same geographic focus and vintage year. Funds with vintages of 2012 or newer are not considered, on grounds that they're too new to have generated a meaningful IRR. Nor are managers that have not been active since 2008, and Preqin has ranked only the managers that have raised at least three funds.

Only two of the 20 largest private real estate fund managers by total capital raised in the past 10 years have made the list this year. These are New York City-based Blackstone and Dallas-based Lone Star Funds, with scores of 1.73 and 1.9, respectively.

Other US-based managers and their scores are as follows: Woodbridge Realty Advisors, Redwood-Kairos Real Estate Partners and Bell Partners, all with scores of 1.33; HG Capital, 1.4; Blue Vista Capital Partners, 1.5; Waterton Associates and RockBridge Capital, both at 1.6; HEI Hotels & Resorts, 1.67; Harbert Management Corp., Westbrook Capital Partners, Clarion Partners and Landmark Partners, each with 1.75; Covenant Capital Group at 1.83; DRA Advisors, 1.88; and Equus Capital Partners, 1.89.

The three Asia-based funds include HDFC Property Ventures out of Mumbai and Hong Kong-based Gaw Capital Partners, each with a ranking of 1.33; and CITIC Capital, also based in Hong Kong, at 1.75. Two Europe-based funds, Helsinki-based CapMan Real Estate and Stockholm-based Sveafastigheter, ranked at 1.67.

“Appearing in this list is a reflection of the fact that these firms that have created investment strategies that have frequently outperformed those of their peers,” says Andrew Moylan, head of real assets products at Preqin. The research firm notes that the ranking does not intend to endorse specific fund managers, but rather to illustrate those that have performed the most consistently in the past.

“Past performance is, of course, no guarantee of future success, but institutional investors are now scrutinizing past performance more closely than ever when seeking to identify new firms,” Moylan says. “Fund managers that have maintained a consistent investment strategy across a series of funds, and have outperformed their peers in both strong and weak real estate markets, are likely to be those that are most attractive to investors planning new real estate fund commitments.”