The Carlyle Group LP (NASDAQ:CG) posted strong fourth-quarter results aided by its three-fold increase in its economic net income before taxes.
Enthused by the strong performance, the private equity firm also announced a quarterly distribution.
Carlyle Group outpaced analysts’ expectations
The Carlyle Group LP (NASDAQ:CG) unveiled its strong fourth-quarter results on Wednesday. It revealed its economic net income before taxes, a pro forma measure used by the private equity industry that includes unrealized investment gains, tripled to $576 million in the quarter, from $182 million in the quarter a year earlier. The economic net income after taxes jumped to $1.64 per common unit, thereby outpacing the consensus analyst expectation of 91 cents as compiled by Thomson Reuters.
Last month, David Rubenstein, CEO of The Carlyle Group LP (NASDAQ:CG) told Bloomberg TV he sees plenty of opportunity for private equity, having only “touched the surface in the emerging markets”. He further added:
“Well, remember, right now, private equity is roughly a $3 trillion business, about $2 trillion in the ground, $1 trillion in dry powder, but the public markets are roughly $70 trillion. So we’re still a small business, relatively speaking. There’s still plenty of opportunities out there, and we’ve only touched the surface in the emerging markets. About 85 percent of all the money invested in private equity is still developed — invested in the developed markets, so we still have a long way to go before the emerging markets are saturated with private equity investing.”
Carlyle Group firing on all cylinders
During the fourth-quarter, the alternative asset manager’s corporate buyout funds cashed out of deals and notched big gains in the value of assets still on the books. The Carlyle Group LP (NASDAQ:CG) continued to shed assets at a faster pace than it made new investments in 2013, reaping deal proceeds of $17.4 billion on the year against $8.2 billion invested. That is down from 2012 deal proceeds of $18.8 billion, which were fattened by a flurry of debt-fueled dividends paid by companies it owns.
Ryan Dezember of The Wall Street Journal notes eight Carlyle-backed companies held initial public offerings in the fourth quarter, pushing to about $18.6 billion the amount of listed shares Carlyle can sell. Carlyle Group’s assets under management too rose to $188.8 billion, up 11% from the same time last year.
The Carlyle Group LP (NASDAQ:CG)’s corporate private-equity funds too climbed 9% in the period and 30% on the year. Seven of Carlyle’s funds reached a level of profitability during the fourth quarter that will allow the firm to share in future gains.