Carlyle Hedge Fund Woes Lead To Disappointing 4Q

The Carlyle Group has reported underwhelming results for 4Q, including economic income of just $6 million, a YoY decline of nearly 92%. That translates to about two cents per share, well below the reported 41 cents per share expected by industry analysts. Much of the firm’s disappointment can be traced to its underperforming hedge fund assets, including Claren Road Asset Management and Vermillion Asset Management; Carlyle has now sold off most of its hedge fund business and has removed hedge fund AUM from its metrics.

Within its corporate private equity division, Carlyle logged appreciation of 4% in 4Q, resulting in an 11% figure for 2016 (compared to 13% in 2015). The firm invested $2.6 billion in new capital during 4Q and realized proceeds of $3.6 billion. Economic net income for the unit was $71 million for the quarter and $224 million for 2016, falling well short of the $400 million ENI logged in 2015.

Warren Buffett On The Dangers Of Using Complex Math In Investing

Berkshire Hathaway Warren BuffettWhen he's trying to figure out if a company is a good investment, Warren Buffett does not rely on complicated formulas, spreadsheets, and higher-level math. He believes higher mathematics may actually be "dangerous and will lead you down pathways that are better left untrod," if used in the investment process. Q2 2020 hedge fund letters, Read More

Check out our previous 4Q earnings coverage for Blackstone and Apollo.

Article by PitchBook