Saturday, March 15, 2014

Carlyle's Claren Road Rents Top Floor of 51 Astor Place

The Real Deal reported:

Claren Road Asset Management, a credit-focused money manager that is a subsidiary of private equity giant the Carlyle Group, will take the top floor of Edward Minskoff’s 51 Astor Place, The Real Deal has learned. The 25,401-square-foot space was asking a rent of $118 per square foot, a record for Midtown South. Sources familiar with the transaction said that it was likely the priciest per-square-foot deal struck in the neighborhood.
Three years ago Carlyle purchased 55% of Claren Road from its founders:

Claren Road serves as the investment adviser to private pooled investment vehicles, or funds, that are offered to investors on a private placement basis. 

This includes public pension funds.  Claren Road's fee disclosure for public pension funds stated:

As the fund administrator to Claren Road Credit Partners, LP, GlobeOp provides general administrative services that from time to time include assistance with the subscription processes of public pension plans. Because GlobeOp’s compensation for such fund administration services is calculated as a fixed amount based on total assets under management, no compensation is paid specifically with respect to the investment of any particular public pension plans. 

Not until the funds assets under management increase and a new fixed amount is calculated.  At that point compensation is clearly paid.

The cost of Claren Road's new office space will be borne by investors, including public pension funds.  Underfunded pensions need to roll the dice to catch up which helps sell Claren Road and Carlyle's other investment offerings.