US investor Carlyle has closed its CEREP III fund at €2.2bn.
With leverage, Carlyle will invest up to €9bn, mainly in offices. Logistics, residential, retail and hotel assets across the Continent will account for around 20% of investment. The fund, Carlyle’s third in Europe, had an initial target size of €1.5bn.
Carlyle may also look at investment in Turkey, particularly in the capital, Ankara, and Istanbul.
“We have a buyout team there and it would make sense,” said Eric Sasson, Carlyle’s Europe head.
The CEREP fund, which is backed mainly by institutional investors, has committed to 10 assets, totalling €715m, and has also bought office and mixed-use assets in Denmark, Finland, France, Germany, Sweden and Spain. Around 80% of investment will come in countries in which Carlyle already has a presence.
Sasson is confident of double-digit returns from the fund. The origin of investors in the fund is split equally between Europe and the US.
“Some of the investors in our previous fund have returned, and Europe is still clearly of interest in the US,” added Sasson. “We did not raise the fund by saying that it’s now a distressed market, but by committing to what we do normally.” The fund is geared to Carlyle’s usual level of around 70%.
“We’ve never been that highly geared and have remained quite prudent,” says Sasson.
Carlyle’s first two European funds, CEREP I and CEREP II, have invested €1.8bn since 2001.
The company has around €3.4bn of assets under management in Europe.
