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Fortress, Colony Said to Seek Property Funds as Fees Shrink

Fortress Investment Group LLC, Colony Capital LLC and Starwood Capital Group LLC are among a record number of private-equity firms raising real estate funds, according to people familiar with the process, driving down fees in a business reeling from earlier losses.

There are 441 private-equity firms raising real estate funds, 63 more than a year ago and almost twice the number in 2008, according to London researcher Preqin Ltd. Companies including Related Cos., the New York developer founded by Stephen Ross, and asset manager AllianceBernstein Holding LP have wooed investors and almost completed fundraising, said two of the people, who asked not to be named because the process is private.