Carlyle Buys $2.6 Billion Property Fund Manager

Carlyle Buys $2.6 Billion Property Fund Manager

Commercial News » North America Commercial News Edition | By Francys Vallecillo | September 25, 2013 12:04 PM ET

The Carlyle Group, announced today the purchase of Metropolitan Real Estate Equity Management, LLC, a global property funds manager with a portfolio worth more than $2.6 billion. 

While purchase price was not disclosed, equity for the deal will come from the company's balance sheet, Carlyle said in a statement. Washington D.C.-based Carlyle is paying cash and will give Metropolitan a share of future profits if certain goals are met, according to The Wall Street Journal.

New York City-based Metropolitan, known as a real estate "fund of funds," is one of the largest managers of indirect investments in global property. Since 2002, the firm has raised more than $2.6 billion across 16 fund managers with investments in more than 80 managers. The company has offices in the U.S., Europe and Asia.

Metropolitan's strategy primarily focuses on "value add/opportunistic real estate investments, and specifically on more than 1,000 highly focused, specialist real estate managers across the globe," according to Carlyle's announcement. 

Metropolitan will join of Carlyle's "solutions" platform, which includes the $48 billion private equity fund manager AlpInvest. Metropolitan's president and co-chief investment officer, David Sherman, will remain with the company, Carlyle stated.  

"This adds an important capability to our growing solutions business, strengthens our intellectual capital in global real estate, and immediately contributes to our corporate bottom line," Jacques Chappuis, Carlyle managing director and head of the solutions group, said in the release."

"Carlyle's global scope and resources will better enable us to deliver the products and services that our investors demand," Mr. Sherman said in the release. "This acquisition is a validation of our model and our growth plans." 

The deal is expected to close in November 2013.


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