Carlyle's third property fund raises record $3.4 billion

03 June 2008

Mumbai: Global private equity firm The Carlyle Group has raised 2.2 billion euros ($3.43 billion) in its Third European Real Estate Fund, the largest-ever private equity fund investing solely in European real estate.

With up to €9 billion of funds available, CEREP III is Europe's largest private equity fund dedicated to real estate investment, Carlyle said in a website release. 

The fund was raised against an initial target of €1.5 billion, underlining ongoing, strong demand for pan-European real estate investment vehicles, and has already committed €715 million to 10 assets. With leverage, the pan-European team of 46 people will have maximum funds of approximately €9 billion to invest, it said.

The Carlyle Group now manages $10.8 billion in ten real estate funds across the world, including €3.4 billion of assets under management in Europe. The total anticipated capitalisation of the global real estate portfolio is €20.3 billion, including committed equity and debt, of which €8.6 billion is in Europe.

Carlyle invests in all real estate asset classes, with a concentration on office, retail, hotel and residential assets across Western and Central Europe. Carlyle's two previous European real estate funds, CEREP I, (which raised €427 million) and CEREP II (which raised €763 million), have invested a total of €1.8 billion (including reinvesting capital and co-investment) in 65 assets since 2001.

Carlyle's strategy is to identify real estate assets which need repositioning, often sourced through public or corporate disposals, where there is strong underlying potential for value creation. Carlyle develops new buildings or transforms existing assets into higher specification properties, which often set benchmarks for quality and sustainability.