The Carlyle Group LP (NASDAQ:CG) Reported ENI per Unit of $0.47 vs. Consensus $0.69. All in all, while 2012 was a highly productive year for The Carlyle Group LP (NASDAQ:CG), fourth quarter results fell somewhat short of expectations. Shares of the private equity giant are down close to 8% on the earnings results.

Carlyle Group

All in all, while 2012 was a highly productive year for Carlyle, fourth quarter results fell somewhat short. Analysts at Credit Suisse see less impact on  their long term thesis given Carlyle Group LP (NASDAQ:CG)’s strong track record that remains strong, the diversification of the firm’s investment portfolio and monetization discipline and certain nuances of fund mechanics and carry timing that may have dropped less to the bottom line this quarter but will ultimately come to unit holders (i.e. most notably Carlyle Partners V has $800 mil in accrued carry that we believe will begin paying carry in 2013).

Nomura has a list of all the positives and negatives for Carlyle Group LP (NASDAQ:CG)’s Q4 earnings, which we list below:

Positives in the Quarter:

  1. Raised $4.6bn of new capital across the platform (vs. prior quarter$3.4bn) driven by $3bn raised from corporate private equity (including latest vintage U.S. buyout fund and first closing in latest Asia buyout and U.S. mid-market buyout fund);
  2. Strong pace of $4.8bn distributions ($6.8bn realized proceeds generated for fund investors vs. $5.1bn in prior quarter) and equity investments ($3.3bn vs. $1.6bn in prior quarter);
  3. Fee-related earnings rose 20% q/q to $55mn (+29% better than LTM quarterly average);
  4. Fee-earning AUM +7% (to $123.1bn) and total AUM +8% q/q (to $170.2bn);
  5. $43.9bn of dry powder (vs. $39.4bn in prior quarter) of which $17.6bn in corporate private equity;
  6. AUM in-carry ratio of 67% vs. 68% in the prior quarter; remaining fair value of capital from investments from 2008 or earlier down to 48% (vs. 51% in prior quarter);
  7. Net accrued performance fees of $1.2bn (roughly flat q/q)
  8. GMS raised $1.2bn in new carry and hedge fund assets (flat from prior quarter) with fee earning and total AUM +9% and +8% q/q, respectively.

Issues in the Quarter

  1. ENI fell 17 % q/q to $182mn (vs. $184mn LTM quarterly average);
  2. Pretax distributable earnings (“DE”) fell 9% q/q (+9% above LTM quarterly average) to $188mn; DE $0.49/unit post-tax basis;
  3. Segment revenue fell to $505mn, -1% lower than LTM quarterly average;
  4. Corporate private equity fee-earning AUM down 8% q/q (but total AUM +0%) due to the “composition of funds.”
  5. Net performance fees were $132mn (-20% q/q but +1% better than LTM quarterly average) of which $127mn of realized;
  6. Current MOIC of remaining fair value of capital at 1.2x, flat from prior quarter.