Return to search

Carlyle collects $4.2bn for seventh RE fund

The vehicle is the Washington, DC-based firm’s largest in the asset class to date.

Washington, DC-based alternative asset manager The Carlyle Group held a final close for its seventh US real estate fund, Carlyle Realty Partners VII (CRP VII). The firm raised a total of $4.2 billion, going above the fund’s hard cap.

Carlyle launched CRP VII in 2013 and gathered $1.36 billion during the fund’s first close in March 2014, according to a filing with the US Securities and Exchange Commission. During an earnings call last month, co-chief executive David Rubenstein said the firm was nearing a final close of CRP VII at its $4 billion hard cap.

Limited partners included numerous US public pension plans such as the Teacher Retirement System of Texas, the Teachers’ Retirement System of the City of New York, Pennsylvania Public School Employees’ Retirement System, Pennsylvania State Employees’ Retirement System (PSERS) and the Teachers Retirement System of Illinois, according to PERE Research & Analytics.

“We appreciate the strong support of our investors,” Robert Stuckey, managing director and head of Carlyle’s US real estate head, said in a statement. “We believe the robust interest in CRP VII is acknowledgement of our successful focus on opportunistic investments in US real estate, and we look forward to continuing to create value in our portfolio.”

Similar to its predecessor funds in the CRP series, CRP VII will focus on acquisitions, value enhancements and dispositions of mispriced and undervalued real estate assets in the US, primarily single-asset transactions involving office, residential, senior living, hotel and retail properties. The fund is targeting gross returns of at least 20 percent and net returns of at least 16 percent, according to a PSERS document.

Carlyle in particular has been focusing on multifamily properties in recent years, having invested a total of approximately $1.4 billion in equity through CRP VI and CRP VII. The capital outlay went to 92 investments encompassing approximately 29,000 units in 27 US markets on behalf of the two funds.

CRP VII is the alternative asset manager’s largest property fund to date. Its predecessor, the $2.34 billion CRP VI, was generating a realized gross internal rate of return of 40 percent and a 2x multiple on invested capital as of June 30, according to Carlyle’s second-quarter earnings report.

In the US, Carlyle has completed more than 500 property transactions across its seven CRP funds, and has invested across 11 sectors and 30 markets in the country.