Carlyle Group Could Target Senior Housing with New $5 Billion Fund

The Carlyle Group, a Washington, D.C.-based global private equity firm, is planning to raise $5 billion in a new fund that may include senior housing investment targets, Bloomberg recently reported.

The fund would be the firm’s eighth, and is being put together in the first half of 2017, according to unnamed sources cited by Bloomberg.

The company raised $4.2 billion in 2015 for its seventh real estate fund, Carlyle Partners VII, and has been actively investing in the senior housing space. In August 2016, the Carlyle Group engaged in a joint venture with Capitol Seniors Housing for a four-property portfolio of senior housing communities in Seattle markets.

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As of that time, the firm owned 6,700 senior housing units across 38 senior housing assets.

The firm is particularly focused on investing in real estate assets that include senior living and rental properties, which could benefit from demographic trends, co-founder and Co-CEO Bill Conway said during the firm’s earnings call from the third quarter of 2016. The Carlyle Group manages $169 billion in assets, with $13 billion in assets under management within the firms real estate funds, according to the company’s website.

The firm aims to raise $100 billion—including its latest funds—over the next few years, executives said during the third quarter earnings call.

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The 2007 buy-out of HCR ManorCare for $4.9 billion is arguably the most well-known senior housing and care investment that Carlyle has made. In 2010, the firm sold the real estate of the nursing home giant to senior housing real estate investment trust (REIT) HCP (NYSE: HCP) for $6.1 billion. Carlyle retains ownership of the ManorCare operating company. Last year, HCP spun out the assets—which have become troubled—into a separate, independent REIT, Quality Care Properties (NYSE: QCP).

Several senior housing industry stakeholders, including CEOs of provider companies, have said that 2017 could see increased private equity activity in the sector. Already, the year has begun with a rumor that private equity giant Blackstone Group may be in talks to buy Brookdale Senior Living (NYSE: BKD), the nation’s largest senior living company, in whole or in part.

The Carlyle Group declined to comment on the extent of the new fund’s senior housing aims.

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Written by Amy Baxter

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