Welcome to the inaugural edition of Real Estate Capital USA’s ranking of the leading commercial real estate private equity managers active in the US.

The Real Estate Capital USA Debt Fund 40, compiled by PEI Media’s research and analytics team, ranks managers by the level of capital raised from external investors in the preceding five years with the express purpose of providing credit to US property owners.

The ranking complements similar research from our affiliate titles, PERE and Real Estate Capital Europe, which respectively look at the 50 largest global managers and the 30 largest European firms. We are starting this year’s ranking with 40 managers but expect this will grow as more capital is allocated into commercial real estate debt strategies.

Because this is the first year of a US-specific ranking, our analysis of the industry will be more limited this year than in future editions of this research. Our best point of comparison is data from Real Estate Capital Europe, which tracked $45 billion of capital raised by the 10 largest managers and a 23 percent year-on-year increase in this cohort over the same period in 2020. In all, European debt managers raised $71.3 billion in 2021.

The consensus in the US debt markets is that debt strategies are gaining traction with investors for a variety of reasons, including strong risk-adjusted returns, yields that are higher than similar government and corporate bonds, and the ability to be at a more protected place in the capital stack.

As the world emerges from the covid-19 pandemic and real estate private equity managers are able to travel to meet with clients and prospects, expectations are that this trend toward capital raising will accelerate. Read on to find out which firms bolstered their financial firepower over the past year – and get an idea of what will come next.

How we compiled the REC USA Debt Fund 40

Our research and analytics team counted the total volume of capital raised by managers from third-party investors between January 1, 2017 and December 31, 2021 for the purpose of issuing real estate debt in the US.

This ranking includes funds and mandates designed to lend, or participate in syndicated loan deals – it does not include funds raised for the purpose of buying defaulted debt.

Our research process

Our researchers gave the highest priority to information received from managers themselves. When managers confirmed deals, we sought to ‘trust but verify’. To encourage cooperation, we did
not disclose which companies aided us on background and which did not.

Where we lacked information from organizations, we sought to corroborate information using sources including company websites, announcements and limited partner disclosures.

Focus on the US

This ranking concerns real estate debt funds and mandates targeted toward the US. Where we can identify the allocation to the US within a multi-regional fund, the volume of that allocation is counted towards a manager’s total. However, we do not count multi-regional funds that can be deployed in the US, but for which the US allocation is not identified.

What counts

We count capital raised for dedicated programs of issuing debt against real estate, including through participation in syndicated loans. Capital is raised primarily in blind-pool limited partnerships, but also through separate account mandates. We count capital definitively committed by December 31, 2021. Funds must have had an interim or final close after January 1, 2017 – we counted the full amount of a fund if it had a close after that date.

We counted capital raised in limited partnership or co-investment/side-car structures. We also counted seed capital or manager commitments.

What does not count

The data excludes capital raised from affiliated entities, capital raised on a deal-by-deal basis, expected capital commitments, open-end funds, public funds, funds of funds, non-discretionary vehicles, secondaries vehicles, infrastructure debt funds, hedge funds and credit funds in which buying defaulted or distressed loans is the focus of the strategy.