Carlyle offloads RE secondaries unit Metropolitan

Carlyle Group has agreed to sell its real estate secondaries unit Metropolitan Real Estate Equity to global asset manager BentallGreenOak.

The transaction, which is expected to close in the first half of this year, will add $2.4 billion of primary, secondaries and co-investment to BentallGreenOak’s $53 billion of assets under management, according to a statement.

BentallGreenOak was formed in 2019 from a merger between GreenOak Real Estate and Sun Life Financial subsidiary Bentall Kennedy, sister title PERE reported at the time. The New York-headquartered firm manages a variety of real estate fund strategies, including US value-add, European core-plus logistics and European secured debt, according to its website.

Carlyle acquired Metropolitan in 2013 and formed part of the company’s investment solutions platform along with AlpInvest Partners. The unit closed its second real estate secondaries fund on $1.2 billion in 2019, Secondaries Investor reported at the time. As of 31 December, MRE Secondaries Fund II had deployed $315 million, according to Carlyle’s latest 10K filing.

“BentallGreenOak’s acquisition of Metropolitan was motivated by our relentless efforts to put our clients and investors first by providing them with access to an enhanced array of global investment strategies and opportunities,” Sonny Kalsi, chief executive of BentallGreenOak, said in the statement.

“Our shared, positive outlook on the growth potential for secondary and co-investment opportunities in the commercial real estate market further cements our commitment to integrating this business into our platform and growing it into a global leader for the long term. We are confident that the cultural alignment and history of strong relationships we share with Metropolitan’s senior management team makes this deal a seamless fit for both firms.”

BentallGreenOak, which employees about 1,300 staff across 24 countries, is known within the real estate market for an unconventional diversity, equity and inclusion policy, requiring 66.7 percent of all fresh recruits to be minorities or women, PERE reported last year.

“Two out of every three job opportunities, at a minimum, are going to be filled by highly skilled women or professionals from under-represented groups,” Kalsi said at the time. “And, if we don’t meet our objectives, we’re going to ‘penalise’ ourselves.”

Deal volume for real estate secondaries hit a record high last year with $8.5 billion trading – an 18 percent jump on the prior year, according to research by Landmark Partners. Fund and portfolio recapitalisations drove volume, accounting for 66 percent of all activity.