NEW YORK - Global investment firm Carlyle (NASDAQ: CG) has entered into a strategic partnership with North Bridge ESG LLC, allocating up to $1 billion to fund the origination of commercial property assessed clean energy (C-PACE) loans. This move positions Carlyle as a significant player in the growing market for environmentally focused real estate finance.
C-PACE financing, which North Bridge provides to institutional clients across major U.S. markets, is a fixed-rate, long-term funding option secured by local property assessments. This financing mechanism is increasingly popular among commercial real estate developers for its potential to enhance property values and provide flexible terms for construction, renovation, and recapitalization projects.
Laura Rapaport, CEO of North Bridge, highlighted the significance of Carlyle's commitment as the largest in the industry, enhancing North Bridge’s ability to lead the transformation of the market to better serve institutional sponsors and lenders. Akhil Bansal, Head of Credit Strategic Solutions at Carlyle, emphasized the alignment with Carlyle's expertise in asset-backed finance and real estate credit, aiming to fulfill commercial real estate owners' financing needs.
Rachel King, a principal at Carlyle focused on opportunistic real estate credit, noted the opportunity presented by banks' retreat from commercial real estate lending, which has created attractive prospects for well-capitalized C-PACE lenders.
The partnership leverages Carlyle's Credit Strategic Solutions (CSS) and Private Credit teams' capabilities. CSS, a division within Carlyle's Global Credit business, specializes in private fixed income and asset-backed investments and manages roughly $7 billion in assets as of June 30, 2024.
Carlyle, with $435 billion in assets under management as of the same date, has a broad investment platform spanning private equity, credit, and investment solutions. North Bridge is recognized for its innovative C-PACE financing solutions, which aim to optimize capital structures for real estate projects.
Legal advisement for the transaction was provided by Paul Hastings LLP for Carlyle, and Latham & Watkins LLP and Chapman and Cutler LLP for North Bridge. The information in this article is based on a press release statement.
In other recent news, The Carlyle Group (NASDAQ:CG) has been making significant strides. Redburn-Atlantic has initiated coverage of The Carlyle Group with a Buy rating, citing the company's robust growth in its Credit business, strategic changes in its compensation structure, and the proactive approach of the new CEO. On the other hand, TD Cowen maintained its Hold rating on The Carlyle Group, albeit with a slightly raised price target from $41.00 to $42.00, following the company's second-quarter performance.
In a recent earnings call, The Carlyle Group reported a record $435 billion in assets under management (AUM), strong fee-related earnings, and successful fundraising efforts. The company remains optimistic about the second half of the year, anticipating increased exit activity with several large transactions on the horizon.
In other developments, investment bank Houlihan Lokey (NYSE:HLI) announced it will acquire Waller Helms Advisors, a firm specializing in investment banking services for the insurance and wealth management sectors. This strategic acquisition is expected to enhance Houlihan Lokey's financial services platform, especially in the insurance and wealth management sectors. The agreement is subject to completion of the customary closing conditions and regulatory approvals.
InvestingPro Insights
Carlyle's strategic partnership with North Bridge ESG LLC in the C-PACE loans market comes at a time when the company's financial metrics are drawing attention. According to InvestingPro data, Carlyle (NASDAQ: CG) has a market capitalization of $14.27 billion, reflecting its significant presence in the investment sector. Despite a challenging P/E ratio currently standing at -36.16, the company's gross profit margin for the last twelve months as of Q2 2024 is robust at 58.16%, indicating a solid underlying profitability in its operations.
Investors considering Carlyle's stock will note the company's revenue growth of 3.25% for the same period, with a remarkable quarterly revenue growth of 169.42% in Q2 2024, showcasing a potential for scalability in its business model. Additionally, Carlyle's dividend yield as of late 2024 stands at 3.5%, which could be appealing to income-focused investors, especially in the context of its recent price total return of 23.7% over the past year.
Two key InvestingPro Tips for those tracking Carlyle's performance include the importance of monitoring the company's next earnings date scheduled for November 5, 2024, as this could provide further insights into its financial trajectory and strategic initiatives. Moreover, with the InvestingPro Fair Value estimated at $38.55, compared to analyst targets of $45, investors may find additional value in the comprehensive analysis available on InvestingPro, which lists several more tips to guide investment decisions.
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