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Carlyle nears $2bn first close for RE fund

The firm is looking to raise $5bn for its latest US opportunity fund, $800m more than it raised for its predecessor vehicle.

The Carlyle Group is expecting to hold a first close on $2 billion next month for its eighth opportunistic real estate fund, PERE has learned.

The Washington, DC-based alternative asset manager declined to comment. Carlyle started pre-marketing Carlyle Realty Partners VIII in the third quarter, chief executive David Rubenstein said on the firm’s October analyst call, adding that “the reception to that [pre-marketing] has been pretty good” and the “fund is pretty likely to be bigger than the last one.”

Sources familiar with the fundraising process said the firm is seeking to raise $800 million more than the predecessor vehicle. Carlyle launched CRP VII in 2013 and closed it in December 2014 on $4.2 billion, at the fund’s hard-cap, PERE previously reported. CRP VII had $2.2 billion invested and a 1.2x investment multiple as of December 31, according to the fourth-quarter earnings statement. The firm did not disclose gross or net returns for the fund, however.

Investors in CRP VIII include the Pennsylvania Public School Employees’ Retirement System, which earmarked $200 million during its meeting earlier this month, according to PERE data.

Carlyle’s opportunistic fund series focuses 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 firm plans to deploy the majority of CRP VIII’s capital to multifamily and “active adult living,” according to PennPSERS documents.

In addition to its opportunistic fund, the firm is continuing to raise capital for its new core-plus real estate fund, Carlyle Property Investors. The firm raised at least $800 million by the end of the fourth quarter for the vehicle, PERE previously reported.

“In terms of the core-plus real estate fund, it’s going to get bigger,” co-CEO Bill Conway said on the firm’s fourth-quarter earnings call. “Exactly how much bigger and how soon, I don’t know.”

Rob Stuckey leads the firm's US real estate funds.