Continuing its push into property markets around the world, The Carlyle Group is establishing a private equity real estate presence in Latin America, according to sources.
Though Carlyle has yet to make any announcements and details are limited, sources close to the firm said it may have a team up and running by the end of the year. The firm will invest primarily in Brazil, though other countries may also be targeted. According to private equity sources in Brazil, David Rubenstein, Carlyle’s founder, and other senior members of the firm have recently made several trips to the country.
The Brazilian magazine Exame recently speculated that Carlyle may tap Eduardo Machado, head of the real estate department of Banco Fibra, or Rossano Nonino, a director of real estate investment firm Brazilian Capital, to head the Latin American property team.
Carlyle’s push into Latin America would complement its existing private equity real estate operations, which span the US, Europe and Asia. Last year, the firm raised more than $2 billion (€1.6 billion) for three separate real estate vehicles: $950 million for the US-focused Carlyle Realty Partners IV; $930 million for Carlyle Europe Real Estate Partners II and $410 million for Carlyle Asia Real Estate Partners. It is unclear if the firm would raise a separate vehicle for Latin America. Carlyle is also on the fundraising trail for its fifth US real estate fund, which is reportedly targeting $1.5 billion.
By moving into Brazil, Carlyle joins a growing chorus of real estate investors drawn to the country’s stable economy and large population, as well as its lack of residential housing. Last year, Equity International, the private equity real estate firm affiliated with Sam Zell, acquired a $50 million stake in Sao Paolo-based developer Gafisa. Another private equity real estate firm, Prosperitas Capital Partners, is trying to raise more than $300 million for a Brazilian-focused vehicle—the Washington State Investment Board recently committed $50 million. In September, Brookfield Asset Management closed on $700 million for a Brazilian retail fund. And that same month, Paladin Realty Partners raised $200 million for its second Latin America opportunity fund, a significant portion of which will be invested in Brazil.
Other investors active in the region include Hines, Tishman Speyer and GIC.