Carlyle Group last week finished raising $950 million for its fourth U.S. real estate fund, its largest by far and one of the largest dedicated private equity real estate funds in the country.

With borrowings, Carlyle said it could invest as much as $4 billion in real estate with this one fund.

Robert G. Stuckey, head of Carlyle's real estate group, said last week that the fund could have been larger, but that "once you get up to a billion you don't need more than that to do what you need to do."

What Stuckey does is make investments that Carlyle can get into and out of in less than four years with a hefty profit, with a goal of at least doubling its initial investment. Carlyle's last U.S. realty fund raised $570 million in 2001 and had a net internal rate of return of more than 24 percent. That puts it solidly in the top quarter of all private real estate funds that year.

Carlyle is a privately owned partnership that raises money from wealthy investors and large institutions -- endowments, pension funds, insurance companies and the like -- and invests it mostly in leveraged corporate buyouts, venture capital, real estate and other private transactions. Carlyle, with 500 employees, runs the country's biggest fund for corporate buyouts, which is the D.C. firm's biggest line of business by far. Of its more than 20 private funds, totaling more than $30 billion, four are in real estate. They make up about 10 percent of the total assets Carlyle manages.

Carlyle's real estate business has done some interesting and profitable deals -- more than 106 investments in properties worth a total of more than $8 billion since Carlyle launched its real estate effort in 1997. The first big investment for Fund IV is the pending $1.8 billion purchase of a large tract of land and three apartment buildings on Manhattan's Upper West Side from a consortium of Hong Kong investors and Donald Trump. That deal highlights the firm's strategy of putting money into mixed-use projects with a heavy residential component.

Carlyle's U.S. real estate strategy is focused on major urban markets and in areas with high barriers to entry for a major new development. That just happens to describe much of the Washington area, and Carlyle in the last 18 months has been one of the most active buyers of Washington real estate. Since December 2003, it has bought $1.3 billion worth of local properties: two office buildings, two hotels, a senior living facility and a retail center. But its largest local investments have been in condominium developments. Carlyle has developed or converted from apartments more than 2,900 condominium units in the Washington area. "We like Washington because of the job growth here and because it's our own back yard," Stuckey said.

"There will be 100,000 households created in the Washington area in the next two years, and only 50,000 homes will be put on the market," he said. "We focus on supply and demand, and over the intermediate term we're confident home prices will continue to go up."

Another 'Blank Check'

The resurgence of so-called blank-check companies continues to draw some well-known Washington names.

Ram Mukunda founded Startec Global Communications Corp. in 1990 and took it public in 1997, only to see the telecommunications company, which specialized in providing long-distance service to U.S. immigrant communities, fall to Chapter 11 bankruptcy. The company survived, though most shareholders were wiped out, and it is now controlled by Washington investment firm Allied Capital Corp. Mukunda resigned as chief executive in May 2004.

Earlier this year he founded India Globalization Capital Inc., which last month registered with the SEC to sell up to $120 million of common stock and stock warrants.

India Globalization is what the SEC calls a "blank check," meaning a shell company that sells stock to the public with the promise to use the money raised to buy an operating business. It is the fifth such local company to register for or complete an IPO in the last year.

Mukunda's plan is to buy a business in India. Mukunda, an engineer by training before becoming an entrepreneur, is the company's chief executive. Ferris, Baker, Watts Inc., the Washington investment firm that took Startec public, is also managing this IPO.

Echo Healthcare Acquisition Corp., a Tysons Corner blank check formed by health care executive Gene E. Burleson and private investor Joel Kanter, also last month registered to sell $75 million in stock and warrants to the public. As the name suggests, Echo plans to target the health care industry for acquisitions.

Terence O'Hara's e-mail address is