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Carlyle targets $1bn for Asia

The private equity real estate firm will invest in value-added and development opportunities in the region through its second Asia-focused real estate vehicle, according to US pension documents. Carlyle raised $410m for its first Asia-focused fund three years ago.

The Carlyle Group is looking to raise $1 billion for its latest Asia-focused real estate vehicle, Carlyle Asia Real Estate Partners II.

According to fund documents from Pennsylvania Public School Employees’ Retirement System (PSERS), the fund will invest in real estate and real estate-related opportunities, including value-add investments as well as development opportunities in growth markets in the region.

The fund could also make investments in property developers and companies. The continuing credit crunch is creating “ample opportunities” to invest in distressed and under-managed properties as well as assets controlled by corporations and governments, the documents said. Carlyle declined to comment on the fund.

In 2005, Carlyle raised $410 million for its first Asia-focused real estate fund, Carlyle Asia Real Estate Partners I. The vehicle focused on investments in China, Japan and Korea. The second fund will target investments ranging from $20 million to $100 million.

As of March this year, Carlyle’s real estate investments in Asia had a gross IRR of 47 percent, according to PSERS, with a 2.4x multiple on equity.

The Pennsylvania fund has committed up to $150 million to the latest Asia vehicle. It has also invested in Carlyle’s €2.2bn Europe-focused real estate vehicle, Carlyle Europe Real Estate Partners III, which the Washington DC-based firm is currently raising, according to proprietary data from PERE magazine.

Asia has been a particular focus for private equity real estate GPs and investors this year, with Merrill Lynch closing its first Asia-focused real estate fund, the Merrill Lynch Asia Real Estate Opportunity Fund, on $2.7 billion in October. MGPA and LaSalle Investment Management have also both closed large funds recently, with MGPA closing its MGPA Asia Fund III on $3.9 billion – the largest Asia-dedicated real estate fund ever – and LaSalle closing its LaSalle Asia Opportunity Fund III on $3.2 billion.