Property pvt equity fundraising slows in 2009-data

* Funds raised down 27.5 percent to $110 bln in 2009

* Pick-up seen in Q4, with 84 new launches

LONDON, Feb 16 (Reuters) - The number of real estate private equity fund launches slumped by more than a quarter last year on 2008 levels after plunging values forced managers to put fund raising and dealmaking plans on ice, data showed on Tuesday.

Property private equity advisor Swisslake Capital AG said 285 new funds raised a total $110 billion in 2009, some 53 percent less than the $234 billion raised in 2008.

Swisslake said the decline was partly due to a drop in support from risk-averse pension funds, which also found their investment plans frustrated by the "denominator" effect, which occurs when falling asset values force portfolio adjustments.

"Fund managers reported negative performance figures quarter after quarter, making it difficult for investors to regain confidence and feel comfortable that the market was finally bottoming out," the report said.

"Many investors have also become much more demanding in terms of the due diligence process, delaying the initial commitments which can be a decisive factor for other investors to step into a fund," Swisslake said.

The report showed a significant pick-up in fundraising activity in the final quarter, with 84 new funds targeting $32.3 billion of equity.

However, in the new age of conservative investment, managers are resisting temptation to raise more capital than they can safely invest, the data showed.

The average fund target equity raising fell 35 percent to $387 million in 2009, on 2008 levels, and the number of $1 billion-plus fund launches fell by 64 percent to 12.

This trend towards smaller funds reflects stricter demands from investors as well as a tightening of capital available for investment in the wake of the financial crisis, Swisslake said.

Turbulent capital and real estate market conditions seen in 2009 magnified the flaws inherent in the open-ended fund structure and hundreds of managers were forced to bar investor exits to prevent fund collapses.

Nevertheless, the market share of open-ended funds increased to 11.2 percent from 7.6 percent last year as investors prized long-term liquidity over sporadic short-term closures.

North America remains a fruitful hunting ground for real estate private equity funds, despite an overall tightening in the capital markets.

The number of newly launched vehicles declined only slightly last year to 137, from 148 in 2008. By contrast, the number of Asia-focused vehicles dropped by 67.5 percent year-on-year and the number of European funds fell by 22.1 percent. (Reporting by Sinead Cruise; Editing by Andrew Macdonald) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)