According to Reuters, Carlyle Group reported a 43 per cent year-on-year decrease in third-quarter distributable earnings, which was smaller than expected. The decline in earnings was primarily due to a slump in assets, particularly in its private equity portfolio.
Distributable earnings, representing the cash used for shareholder dividends, dropped to USD 367.4 million compared to USD 644.4 million in the previous year. However, after-tax distributable earnings reached 87 cents, surpassing the average analyst estimate of 72 cents.
Carlyle, like other firms in the industry, has faced challenges in cashing out on its assets due to geopolitical tensions, rising inflation and higher interest rates. The company’s realised performance revenues, driven by asset sales from its private equity unit, decreased by 76 per cent to USD 180.4 million.
In a similar trend, Blackstone Inc recently reported a steeper-than-expected 12 per cent decline in distributable earnings due to muted asset sales, while Apollo Global Management experienced a 92 per cent drop in asset sales, although its adjusted net income increased by 23 per cent due in part to its retirement services business.
Carlyle’s corporate private funds appreciated by 1 per cent, real estate funds gained 1 per cent and global credit funds added 2 per cent during the quarter. On the other hand, Blackstone’s private equity portfolio rose by 2.4 per cent, while Apollo’s portfolio gained 2.7 per cent.
Under generally accepted accounting principles (GAAP), Carlyle’s net income decreased by 71 per cent to USD 81.3 million, primarily impacted by an investment loss of USD 17.7 million.
During the quarter, Carlyle raised USD 6.3 billion from investors, allocated USD 4.1 billion towards new acquisitions, retained USD 71 billion of unspent capital, and generated $204.7 million in fee-related earnings. The firm’s total assets under management slightly declined by 1 per cent to USD 382 billion compared to the previous quarter.
Carlyle declared a quarterly dividend of 35 cents.