Carlyle Buys Real Estate Fund Of Funds

Sep 25 2013 | 12:18pm ET

The Carlyle Group has struck a deal for a fund of real-estate funds, its first foray into the field.

The private-equity giant will acquire Metropolitan Real Estate Equity Management. Terms of the deal were not disclosed, but according to The Wall Street Journal the payout could reach $75 million for the $2.6 billion firm, if performance targets are met.

David Sherman, Metropolitan's chief investment officer, will become head of real-estate in Carlyle's fund of funds group, under Morgan Stanley veteran Jacques Chappuis. Metropolitan has about 40 employees spread across five offices in the U.S., Europe and Asia.

Carlyle is paying for the deal in cash.

The Metropolitan acquisition is part of Carlyle's effort to expand its fund of funds business. The firm is also considering the addition of a fund of hedge funds business, the Journal reports.

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