A newly created senior position is often telling of the direction in which a firm wants to go. In the case of The Carlyle Group, such a recent hire is indicative of its international investment drive.
This month, Adam Metz, a former senior advisor at rival private equity firm TPG Capital, begins work at Carlyle as head of international real estate. He will serve as one of the top executives in the firm’s property business and report to chairman Daniel D’Aniello, who oversees Carlyle’s real assets team worldwide.
Aside from D’Aniello, Metz will be the only other globally-focused – as opposed to regionally-focused – real estate professional at the alternative asset manager and will oversee its real estate teams in Europe and Asia. The European team, led by Christopher Finn, includes 30 professionals in London, Paris, Luxembourg, Milan, Stockholm and Munich, while the Asian group, headed by Jason Lee, comprises 16 staff in Hong Kong, Shanghai and Tokyo. Carlyle currently manages $12.3 billion in real estate, including $5 billion outside of the US.
“The first job is to get in, meet the people, understand the portfolio that we have and make sure that we’re doing everything we can to maximize the returns on the existing investments,” Metz said in an interview with PERE. “As we get into it, we’re going to look at what kind of opportunities are out there to provide excellent returns to investors.”
Metz anticipates that opportunities, at least initially, will be sourced in markets where Carlyle already has an existing real estate presence. “A lot of people feel that Europe is on the verge of a turnaround like the US has experienced over the last few years,” he said. Meanwhile, emerging markets in Asia “have a very strong growth story.”
Metz is joining Carlyle at a time when the Washington, DC-based firm is said to be raising its third Asia-focused real estate fund, Carlyle Asia Real Estate Partners (CAREP) III. However, its track record to date in overseas real estate has been spotty. For example, Carlyle Europe Real Estate Partners (CEREP) III, a vintage 2007 vehicle, was generating a net internal rate of return of -4 percent as of June 30, while the first fund in the European series had a 7 percent return, according to the firm’s second quarter earnings results.
Indeed, Carlyle saw an investment loss of $6.1 million during the first half of 2013 primarily because of unrealized losses on investments in some of its European real estate funds, according to a filing with the US Securities and Exchange Commission. The quarterly results did not disclose specific performance information for the firm’s Asian funds.
As a 30-year industry veteran, Metz could help to boost Carlyle’s standing as an overseas real estate player. During his two-year stint at TPG, for example, he helped to build the firm’s growing property business, working on investments, fundraising, portfolio management and strategy in both the US and Europe. Prior to TPG, Metz also served as chief executive officer of General Growth Properties, leading the troubled mall REIT through a high-profile restructuring over a two-year period.
Those roles and others have helped to prepare Metz for his latest post. “Like everything in life, your whole resume builds upon itself,” he said. “With experience comes perspective.”
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