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Metropolitan nets $70m for RE secondaries

Carlyle's Metropolitan is targeting $450m for its first dedicated secondaries and co-investments fund.

Metropolitan Real Estate Equity Management has held an interim closing for its first dedicated real estate secondaries and co-investment fund, Metropolitan Real Estate Partners Secondaries & Co-Investments Fund (SCIF), according to documents filed with the US Securities and Exchange Commission.

Metropolitan and its parent company The Carlyle Group, both declined to comment. However, Secondaries Investor‘s sister publication PERE understands Metropolitan has raised a total of approximately $70 million towards the vehicle’s $450 million target.

While it had previously invested in secondaries transactions through its multi-manager fund series, Metropolitan launched a dedicated secondaries platform earlier this year, hiring former Partners Group executives Sarah Schwarzchild and David Lei to head it.

The firm held a first close on the fund on 30 July, according to SEC filings. Sources familiar with the matter said Metropolitan is expected to close on additional capital by the end of the year and is eyeing a final close next summer.

SCIF’s investments are anticipated to be evenly split between secondaries and co-investments, with secondaries deals focused on acquisitions of limited partner fund stakes. To date, the fund has made a $40 million secondaries investment, involving the acquisition of four different LP positions within the same fund, as well as a number of smaller secondaries and co-investment transactions, including the distressed purchase of several Class B office buildings in Tokyo, sources said.

Metropolitan is said to have identified a pipeline of $800 million in secondaries transactions alone.

Although LPs can invest directly in SCIF, they also can invest through Metropolitan’s global multi-manager fund, Metropolitan Real Estate Partners Global VII. The vehicle is a feeder fund that offers allocations to both the domestic and international sleeves of the multi-manager fund, as well as SCIF.

Carlyle acquired Metropolitan last year and made it part of its Solutions Group, which also includes AlpInvest Partners and hedge fund platform Diversified Global Asset Management. Metropolitan currently oversees more than $2.6 billion of client capital worldwide.