Carlyle teams up with Canopy on lending venture

The Washington, DC-based private equity giant has launched a new joint venture with investment adviser Canopy Investments, looking to capitalize on small balance commercial real estate loans.

Washington, DC-based alternative assets manager The Carlyle Group has formed a joint venture with New York- and Philadelphia- based investment manager Canopy Investments to establish a commercial real estate lending program. 

The partnership, which expects to begin investing this quarter, will originate loans of $5 million to $15 million against all commercial property types in markets nationwide. It will focus on income-producing assets that are not fully stabilized, and loan terms generally will be from two to five years.

The joint venture marks the first project Carlyle and Canopy have worked on together. Canopy managing principal Meg Blakey told PERE that she and her partner, managing principal Jackie Brady, reached out to Carlyle when searching for a capital partner for the program. “Carlyle understood the opportunity in this undercapitalized sector,” she said.

Neither Canopy nor Carlyle has disclosed how much capital will be committed to the program, but the firms, which finalized their partnership late last week, will begin investing immediately. Though Blakey would not reveal a specific timeline, she said the partnership plans for a capital markets exit when the program “reaches a critical mass.”

“Financing for small balance commercial real estate loans represents an undercapitalized opportunity in the current market, and we are pleased to partner with Canopy to launch a new lending program drawing on their commercial real estate lending and capital markets expertise,” said Robert Stuckey, Carlyle’s managing director and head of US real estate, in a statement.

Blakey and Brady formed Canopy in 2011 following roles as managing directors at Urdang Capital Management (now Center Square Investment Management), a subsidiary of BNY Mellon Asset Management. Previously, the two worked together as investment managers on commercial real estate debt funds at Capmark Financial Group. The pair has originated and structured more than $3.5 billion in commercial real estate debt since 2005.

Meanwhile, Carlyle recently made headlines acquiring real estate fund of funds firm Metropolitan Real Estate Equity Management. It also hired Adam Metz, formerly senior advisor to TPG Capital’s real estate group, as its new head of international real estate.