Fundraising looked like it was bouncing back. Then Jon Gray said this.
Analyst question:
Fundraising for the broader industry seemed to turn a corner in Q1 before the recent macro volatility. You’ve highlighted why real estate could perform well but how is that message resonating with LPs?
Jon Gray:
Conversations have improved. The tone is more open. But it’s still an underperforming sector, and when that happens, allocations shrink.
My gut is this period could slow some movement into real estate. But when the recovery takes hold, capital will return — like in the 1990s after the financial crisis.
Investors will be more hesitant in open-end funds, more biased toward drawdown vehicles and fresh capital. But with lower cost of capital and limited new supply, performance will improve — and real estate will get traction again. We're still early in that process.
Why this matters:
Blackstone is the 800-lb gorilla.
Jon Gray is measured, rarely alarmist.
So when he calls this a “speed bump,” you have to wonder...
Speed bump for Blackstone. Earthquake for everyone else?
PS — This is another reminder why it’s critical to be able to “follow the dollars” in real estate. Capital is not evenly distributed.
Open-end vs. drawdown funds.
Redemption dynamics.
Fresh capital vs. stuck capital.
If you want to build fluency in real estate capital markets, DM us to learn more about our upcoming FastTrack Boot Camp.
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