The Carlyle Group has invested more than $35 million in its Brazilian real estate portfolio company, Urbplan Desenvolvimento Urbano, over the past six months or so, with plans to inject additional capital into the Brazilian developer in the future, the Washington, DC-based alternative asset manager reported in its third-quarter earnings results today.
During the second and third quarters of 2013, Carlyle, as well as certain senior professionals at the firm, invested a total of $32 million in Urbplan, including $6.4 million by the firm and $25.6 million by its senior executives, the earnings report said. Carlyle also has made an additional capital infusion of $3.6 million subsequent to the end of the third quarter.
Carlyle and the senior professionals will consider additional capital infusions, including potential third-party capital, in Urbplan. However, they currently expect that Carlyle will make follow-up investments not exceeding $50 million of incremental capital, excluding possible funding from the firm’s senior executives or other parties. The private equity firm also indicated that it began consolidating some of the real estate investment funds of Urbplan on September 30.
Urbplan is the new name for Scopel Desenvolvimento Urbano, in which Carlyle reportedly acquired a 60 percent stake for approximately $100 million in 2007. The firm was said to have significantly overpaid for its interest in the company, having based the acquisition price on future revenue projections rather than present-day values. At the time, the Brazilian homebuilder had been in business for 41 years and was one year into a growth and restructuring process backed by UBS-Pactual.
Carlyle reportedly had intended to exit its investment in Scopel by taking the company public, but the global financial crisis stymied its IPO plans. Meanwhile, the homebuilder faced mounting debts after it expanded aggressively to build up its land bank and diversify its holdings across Brazil. Subsequent attempts to sell Scopel were said to be unsuccessful. In May, Carlyle reportedly parted ways with the Scopel family and assumed full ownership of the real estate developer, which it renamed Urbplan.