Carlyle closes $500m secondaries fund

The private equity firm exceeded its $450 million target for the secondaries vehicle.

The Carlyle Group has closed its real estate secondaries fund, the private equity firm said on its Wednesday conference call announcing fourth-quarter results.

The Washington, DC-based private equity firm hauled in $500 million for Metropolitan Real Estate Partners Secondaries and Co-Investments Fund (MREP SCIF), exceeding its $450 million target.

Metropolitan, a subsidiary of The Carlyle Group, is charging a 1 percent management fee and a general partner carried interest of 10 percent, according to documents from a May presentation about real estate by consultant Summit Strategies Group to the city of Jacksonville Police and Fire Pension Fund. Such terms are more or less in line with those of other real estate funds that make secondaries investments. Investors include the Nebraska Investment Council, which allocated $10 million to the vehicle, according to pension meeting materials.

The firm held a closing for the fund in November 2014, picking up $70 million in allocations. The vehicle is split equally between co-investments and secondaries investments, with secondaries deals focused on acquisitions of limited partner fund stakes.

Metropolitan is said to have identified a pipeline of $800 million in secondaries transactions alone. Although LPs can invest directly in SCIF, they also can invest through its global multi-manager fund, Metropolitan Real Estate Partners Global VII. The vehicle is a feeder fund that offers allocations to both the domestic and international sleeves of the multi-manager fund, as well as SCIF.

Carlyle acquired Metropolitan in 2013 and made it part of its Solutions Group, which also includes AlpInvest Partners and hedge fund platform Diversified Global Asset Management.

Carlyle reported economic net income (ENI) for its real assets business – which includes real estate, natural resources and legacy – of $39 million for the fourth quarter and $33 million for the last 12 months. Meanwhile, the firm posted an overall ENI of $73 million for the quarter, compared with $181 million a year ago.

The firm had total assets under management (AUM) for real assets of $38 billion as of December 31, down 10 percent over the last 12 months. Across all of its businesses, Carlyle’s total AUM was $182.6 million during the fourth quarter, down 6 percent from the same year-ago period.