Florida SBA backs Carlyle's debut open-ended core-plus property fund

Florida State Board of Administration is investing $200m (€168m) in two real estate funds, including The Carlyle Group’s debut open-ended, core-plus vehicle.

The pension fund told IPE Real Estate that it approved a $100m commitment to Carlyle Property Investors, which was launched as part of the opportunistic fund manager’s plans to branch out into core-plus investments.

Florida SBA said it “felt the investment was a good fit for the asset class, providing additional access and expertise for the portfolio”.

According to industry sources, Florida SBA is only one of a few major US public pension funds to commit to this fund.

Carlyle would not comment, but during the company’s first-quarter earnings conference call, David Rubenstein, co-founder and co-CEO of Carlyle, said: “We see an increasing appetite for core-plus and that’s why our fundraising there has gone reasonably well, and we expect to increase that in the future.

“We see more allocations to core-plus real estate from some of the sovereign wealth funds and the public pension funds.”

The net-asset value of Carlyle Property Investors had reached $1bn by the end of 2016, according to sources that track the capital raising in the US.

The fund aims to deliver a net internal rate of return of between 9% and 11% by investing in US commercial real estate, including traditional and alternative sectors, such as medical offices, self-storage and senior housing.

Florida SBA has also committed $100m to Carlyle Realty Partners VIII, the latest in Carlyle’s series of opportunistic funds.

The pension fund valued its real estate portfolio at $13.5bn at the end of May, comprising $8.4bn in directly owned assets and $5.1bn in externally managed investments.

The portfolio makes up 8.8% of its total assets, below the target allocation of 10%.

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