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Carlyle closes new European property fund

The €760 million close completes a trio of 2005 vintage real estate funds for the firm, following August’s closes of US and Asia-focused funds.

The Carlyle Group, the global private equity firm, has raised €760 million ($930 million) for its second European real estate fund, Carlyle Europe Real Estate Partners II.

We’re trying to broaden our scope as much as we can by making investments in countries outside our core markets of France, Germany, Italy and the UK.

Eric Sasson, head of European real estate, The Carlyle Group

The fund, which is managed by European real estate head Eric Sasson, will be invested in a combination of property portfolios, new developments, and single assets in the €20 million to €80 million range.

“The core strategy is definitely the same as our first fund,” Sasson told PEO. “But we’re trying to broaden our scope as much as we can by making investments in countries outside our core markets of France, Germany, Italy and the UK, and by looking at other types of asset.”

The fund will primarily be invested in the office, logistics and retail sectors, reflecting both where the firm sees most opportunities and where its knowledge base lies. Sasson is hoping to source most deals off-market. “We’ve got good links to corporates, either directly through our own team or through the LBO team, so we know when they’re selling,” he says.

The fund has already invested in five transactions worth more than €400 million. These include three residential developments in Copenhagen bought from NCC; and a 26-building portfolio in Italy acquired from Beni Stabili for around €255 million.

The Carlyle Group now manages seven real estate funds including a total of $4 billion of committed capital.

Sasson: Looking to source deals off-market

The firm’s first European real estate fund, Carlyle Europe Real Estate Partners I, closed last year on €430 million. It has since been fully invested in 25 transactions including the €320 million acquisition of the Poseidon portfolio of 230 properties across Italy from San Paolo IMI; and the €175 million buyout of the Montrouge site in France from Schlumberger.

Carlyle has also exited six investments from the fund worth over €250 million.

In August it closed two other regional real estate funds: the $410 million Carlyle Asia Real Estate Partners, and the $950 million US-focused Carlyle Realty Partners IV.