Ties between the Carlyle Group and the pension funds operated by both New York City and New York State are being scrutinized once more amid the fever pitch of opposition to institutional players in the real estate market.
In recent years, pension funds from the two governments invested $578 million in Carlyle Group funds, New York Focus reported. A vast majority of that came in August 2024, when New York’s Common Retirement Fund invested $400 million in Carlyle Realty Partners X; only California’s state pension fund contributed more to that particular vehicle.
The same year, three of New York City’s five pension funds invested a combined $178 million in the Carlyle fund. The city comptroller at the time was Brad Lander, who was recently replaced by Mark Levine in the position.
The Carlyle commercial real estate playbook has come into greater focus in the last few years. Since 2021, the firm bought more than 200 properties in New York City at a value above $800 million.
The investments have coincided with a greater push from various levels of government to battle private equity’s real estate influence, though those efforts have largely been focused on limiting their scope of power in the single-family housing sector. Carlyle’s activities have been focused more in the multifamily sector.
There’s a conflict of interest pulling between the pension funds’ legal requirements and the present-day needs of its participants. Carlyle’s spree through Brooklyn and Queens has involved buying small walk-ups and reportedly jacking up rents or rattling tenants by other means. That may be antithetical to the needs of the same employees who want to see their pensions grow, but need to be able to afford rent in the present moment.
A spokesperson for state comptroller Thomas DiNapoli said it was his legal obligation to make decisions based on the interests of the 1.2 million people who are members or beneficiaries of the state retirement fund. The state pension fund controls approximately $300 billion, including $28 billion in private equity real estate funds.
Carlyle declined to comment to the publication.
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