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Management, and others are active in the private equity real estate look, global professional services firm, EY, notes that many markets
sector across many different strategies. My own firm, Rastegar Eq- globally face the prospect of a slowdown in the real estate market.
uity Partners, for example specializes in income producing, reces- But today’s market has been preceded by low economic growth and
sion-resilient commercial real estate investments, including therefore lower levels of development in many markets, it adds, than
self-storage and discount retail investments. at the height of the last property cycle in 2006.
According to figures from specialist data provider Preqin, as last “Should the market turn, we expect a rather softer landing this
year played out, closed-ended funds had record amounts of dry time around,” writes the professional services firm EY. “So, while
powder (capital committed, but not yet invested) at their disposal. there are clearly good reasons for concern — from high pricing and
Managers worldwide had some US$239 billion to deploy (at De- political uncertainty to the future direction of trade winds — the
cember 2016), up from US$210 billion in 2015. A decade previously, fact that real estate funds now hold record amounts of dry powder
the figure was just US$132 billion. is highly positive.” Any turning of the cycle will present many new
In its 2017 outlook for the sector, Preqin calculates that private investment opportunities and with capital to deploy, the global real
equity real estate firms have increased their investment activity rap- estate fund market is in a very strong position to capitalize on these.
idly in recent years. Deal flow slowed in 2016, however, impacted As high net-worth investors continue to seek alternative invest-
by financial market volatility, the Brexit vote for the UK to leave the ments for diversification as well as improvement of their overall in-
European Union, concerns over the Chinese economy, and uncer- vestment return profile, my colleagues and I will work to serve and
tainty in the run up to the US presidential election. Preqin notes educate them and foster new opportunities for
that while fund managers are also finding it harder to find attractive growth.
opportunities in a crowded market, they still invested more capital
in 2016 than they did in 2014. Ari Rastegar is the founder and CEO of Rastegar Equity
In the conclusion to its own 2017 private equity real estate out- Partners, a Dallas-based private equity real estate firm.

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