Carlyle Group Swings To Profit As Assets Recover

The Carlyle GroupBy The Carlyle Group (annual report),User:Fairlyoddparents1234 (uploaded result) [Public domain], via Wikimedia Commons

Yet another private equity firm posted a profit for the third quarter, this time it is the Carlyle Group LP (NASDAQ:CG). The PE firm reported $218.5 million in profit or economic net income (a measure of profitability that takes into account the market valuation of its assets), as the value of its holdings improved, compared with a loss of $191 million in the period a year earlier. Company’s after tax ENI of 66 cents per common unit was in line with the average estimate of analysts in a Reuter’s poll of 64 cents.

Carlyle Group Swings To Profit As Assets Recover

Carlyle’s Group LP (NASDAQ:CG) co-chief executive William Conway, who founded the Washington, D.C.-based firm in 1987, with David Rubenstein and Daniel D’Aniello, said, “Our purpose is to invest wisely and create value for our fund investors, which in turn benefits our public investors, and we worked hard at each this quarter. Our active third quarter is a culmination of several factors, including the scope of our global operation, various tactical advantages we had, strong capital markets, and many months and years of work. We believe that the United States, Europe, and emerging markets – from Brazil to Turkey to China – are great places to invest right now”.

The Company’s performance was helped by an improving environment that boosted the sale of assets and an improvement in the worth of its portfolios. Rivals, the The Blackstone Group L.P. (NYSE:BX) and Kohlberg Kravis Roberts have also reported similar earnings.

The Group’s assets under management jumped to $157.4 billion, helped by an increase in the value of the firm’s holdings and about $2.4 billion in new capital poured by investors. The Company’s private equity portfolio gained 5 percent, compared to a 7.1 percent rise in The Blackstone Group L.P. (NYSE:BX)’s private equity funds and a 6 percent increase in the private equity holdings of KKR & Co. L.P. (NYSE:KKR). As per its executives, the company will be on the lookout for new investment opportunities across the globe, given its array of funds, including those aimed at regions like Brazil and Asia.

David M. Rubenstein, Co-Chief Executive Officer of Carlyle Group LP (NASDAQ:CG), said, “Every component of the Carlyle engine is running strong. Third quarter fundraising was solid, our investment pace was active, portfolio valuations were up, and we generated substantial cash returns for our fund investors. These returns drove robust distributable earnings for the third quarter. Additionally, this quarter, we raised $3.4 billion in fresh capital, reflective of strong investor confidence in our global model and investment performance”.

Carlyle’s Group LP (NASDAQ:CG) stock has risen 16 percent since the firm completed an initial public offering in May, outpacing Blackstone’s 14.5 percent gain, K.K.R.’s 10.6 percent rise, and a 14 percent gain for Apollo Global Management (NYSE:APO) LLC. The company also declared a third-quarter distribution of 16 cents per common unit.


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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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