How AEW raised nearly $2B in a brutal environment following performance challenges. Fundraising masterclass:
---- Track record ----
Fund IV (2000): $360M → 25% IRR
Fund V (2004): $686M → 2% IRR
Fund VI (2010): $424M → 16% IRR
Fund VII (2014): $565M → 12% IRR
Fund VIII (2018): $615M → 19% IRR
Fund IX (2021): $1.2B → 6% IRR
Fund X (2025): $1.8B → TBD
---- Fund X ----
The $1.8B raised for Fund X falls short of AEW's $2B target, but is still the largest closed-end fund AEW has ever raised, is 50% more than the last fund in the series, and was raised in the worst fundraising market in 20 years.
---- How they pulled it off ----
They controlled the narrative:
Instead of hiding from Fund IX, they framed the lack of losses as a lesson in resiliency, emphasizing their 20+ year track record of navigating cycles. According to one pension LP's notes: "AEW is invested in resilience."
They leveraged relationships:
Many of Fund X's investors were investors in the last few funds. Fund IX wasn't great, but Fund VIII was incredible. When you've made people money for decades, they'll often forgive a challenging vintage.
They showed instead of told:
Rather than promising future returns, they demonstrated live deal flow and current portfolio performance during the fundraise. They also focused on the future: demographic growth in senior housing.
---- The brutal truth ----
Most GPs think fundraising is about IRR spreadsheets.
But LPs say it’s actually more about trust, timing, and storytelling.
AEW convinced LPs that Fund IX was an outlier caused by unprecedented market conditions, not poor judgment.
The result?
LPs gave them 50% MORE capital than their last fund.
The lesson?
Your worst performance doesn't define you. Your response to it does.
Read the full AEW Partners Real Estate Fund report here.
PS -- Want to master the art of fundraising? Our next FastTrack cohort dives deep into what separates successful sponsors from the rest. DM for details.
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