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E&Y: CRE Private Equity Challenged By Liquidity Issues

NEW YORK CITY-The real estate fund managers highlighted several key challenges for them to get a new fund to its first close, 52% responded that investors required greater due diligence before committing to the fund.

By Jacqueline Hlavenka | Updated on October 25, 2012

NEW YORK CITY-Private equity fund managers are increasingly facing illiquidity within the capital markets, leaving few able to secure bank financing for commercial real estate projects, according to “Global Market Outlook: Trends In Real Estate Private Equity,” a new report by Ernst & Young. 

The report — based on a survey of 300 global real estate funds — shows that deployment of capital by private equity funds has slowed down largely because of the Eurozone crisis and the uncertainty it has brought to markets around the world, including emerging economies like Brazil and India. However, the one exception is Russia, where domestic banks continue to fund transactions and new development despite their already high exposure to real estate, providing local investors with the means to execute transactions, says E&Y.

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