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Metropolitan to target real estate secondaries

The Carlyle-owned real estate specialist is preparing to launch its largest fund of funds vehicle to date with a dedicated secondaries and co-investment side-car.

Metropolitan Real Estate Equity Management is preparing to launch a US fund of funds with a $500 million sidecar for secondaries and co-investments, according to two sources familiar with the firm’s plans.

The main fund is expected to be larger than the firm’s $359 million Metropolitan Real Estate Fund V, a 2007 vintage fund that beat its $250 million target and is now fully invested. Investors in that fund included a number of US limited partners, such as the Altman Foundation, the El Paso Fireman & Police Pension Fund and the University of Vermont, according to PEI data.

Metropolitan’s been busy on the fundraising front: last month, it disclosed in a US regulatory filing it had raised $11.25 million for its Metropolitan Real Estate Partners International V fund.

Metropolitan declined to comment on fundraising.

The firm was purchased by The Carlyle Group last November, at which time it had a $2.6 billion portfolio and investments in 180 real estate funds worldwide.

Secondaries Investor recently reported that Carlyle hired ex-Partners Group executives Sarah Schwarzchild and David Lei to focus on its real estate secondaries at Metropolitan.

Real estate secondaries accounted for roughly 2 percent of the $26 billion of secondaries deal volume last year, according to a report from secondaries advisory firm Evercore.