News & Analysis

Terms of Metropolitan’s new secondaries fund disclosed

The terms of Metropolitan Real Estate Equity Partners’s new dedicated real estate secondaries and co-investment fund are in line with other real estate funds that also make secondaries investments.

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Terms of Metropolitan Real Estate Equity Management’s new dedicated real estate secondaries and co-investment fund, which is currently in the midst of fundraising, were made public in a May presentation about real estate by consultant Summit Strategies Group to the city of Jacksonville Police and Fire Pension Fund.

According to the document, the Metropolitan Real Estate Partners Secondaries and Co-Investments Fund, which is targeting $450 million, charges 1 percent in management fee and a GP carried interest of 10 percent.

The Carlyle Group, which acquired Metropolitan Real Estate in late 2013, declined to comment.

Such terms are more or less in line with those of other real estate funds that make secondaries investments. The presentation also disclosed that Partners Group Global Real Estate 2014, which makes primary, secondary and direct investments, charges a 1.05 percent management fee and a carried interest of 10 percent on secondaries investments.

And Crown Small Cap Real Estate Fund II, which is being raised by LGT Capital Partners, charges 1 percent for commitments lower than $25 million and 0.75 percent for commitments greater than $25 million. It also charges a carried interest of 10 percent on secondaries investments, according to the same presentation.

Metropolitan is also raising Metropolitan Real Estate Partners Global VII (MERP Global VII), a feeder fund that will receive contributions from three other fund of funds vehicles including MREP SCIF. The two other funds contributing to MERP Global VII are MREP X US and MREP International VI.

MREP SCIF, which had raised about $70 million as of November, has already made several investments. Most recently, it purchased a stake in Moorfield Real Estate Fund II from The William and Flora Hewlett Foundation, as previously reported by Secondaries Investor.

Metropolitan hired former Partners Group executives Sarah Schwarzschild and David Lei earlier in 2014 to head its new dedicated real estate secondaries platform.