"How many golf balls can you fit in a 747?" An important lesson for anyone wanting to start a real estate fund.
Blackstone, Brookfield, Carlyle, Starwood, and Greystar are fundraising juggernauts. They collectively raised $65 billion in their latest closed-end equity funds.
It's easy to lose sight of how much money this is, so let's cram that cash into 747s.
At one golf ball per dollar, they could fill every 747 that Boeing ever built. Nearly 1,500 jumbo jets worth of golf balls.
Here's the lesson...
Have these managers always been able to raise endless amounts of cash or did they start small?
Blackstone's latest real estate fund pulled in $30 billion, but Blackstone's first iteration raised $380 million.
Brookfield recently raised nearly $15 billion, but its first fund raised only $200 million (13 years ago).
Starwood's latest fund raised $10 billion, after starting with only $52 million in the early 1990s.
Carlyle just raised $7.5 billion after starting with an initial fund of less than $500 million.
And Greystar, the only operator on our list, just raised nearly $2 billion after starting with just $31 million in its first fund in the early 2000s.
Most of these funds are on their 10th iteration or so. i.e., the platforms have been around for 20+ years.
But they all started small.
These ubiquitous managers recently pulled in $65 billion, but they started with less than 2% of their current fundraises. Those first iterations raised only $1.1 billion.
PS - has anyone actually ever been asked the 747 question in an interview?
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