Metropolitan launches sophomore secondaries fund – exclusive

Carlyle's real estate fund of funds unit is seeking more than double the target of its debut vehicle focusing on the strategy, Secondaries Investor has learned.

Metropolitan Real Estate Equity Management is back in market with its second dedicated real estate secondaries fund and is targeting more than twice its predecessor, Secondaries Investor has learned.

The Carlyle unit has begun pre-marketing for Metropolitan Real Estate Partners Secondaries & Co-Investments Fund II, according to two sources familiar with the fundraise. It is understood Metropolitan will seek as much as $1 billion for the fund.

Metropolitan‘s debut fund, Metropolitan Real Estate Partners Secondaries & Co-Investments Fund, closed above its $400 million target on $550 million in February after 17 months of fundraising, according to sister publication PERE data. It is understood this first fund was at least 75 percent invested by November.

Limited partners who committed to the firm’s debut secondaries fund include Arkansas Teacher Retirement System and Nebraska Investment Council, which made $20 million and $10 million commitments respectively.

The firm held a first close in September 2015 on $38.3 million on an undisclosed target for Metropolitan Real Estate Partners Global VII, its latest global fund of funds, according to filings with the US Securities and Exchange Commission.

In January Metropolitan promoted its head of real estate secondaries, Sarah Schwarzschild, to managing director.

Metropolitan declined to comment on the fundraise.

There were four dedicated real estate secondaries funds in market as of January, including Landmark Partners’ Real Estate Partners VIII which has a $2 billion target, and Partners Group’s Real Estate Secondary 2017, which was registered in the US in October with an undefined target

In September, Strategic Partners announced it had held the final close on its Real Estate Fund VI, amassing $1.3 billion for the vehicle.

Metropolitan was acquired by Carlyle in 2013, has $1.9 billion in assets under management and employs 13 investment professionals in New York, San Francisco, London and Hong Kong.