Carlyle’s first-quarter earnings drop 10% on lower asset sales
2023.05.04 07:21
© Reuters. FILE PHOTO: The logo of the Carlyle Group is displayed at the company’s office in Tokyo, Japan October 17, 2018. REUTERS/Issei Kato/File Photo
By Chibuike Oguh
NEW YORK (Reuters) – Carlyle Group (NASDAQ:) Inc said on Thursday its first-quarter distributable earnings fell 10% year-on-year owing to a sharp drop in asset sales from its private-equity portfolio that was partly offset by strong growth in its credit business.
It was the first earnings the Washington, D.C.-based firm reported after former Goldman Sachs (NYSE:) Inc executive Harvey Schwartz was named CEO in February.
Carlyle said its distributable earnings, which represent the cash used to pay dividends to shareholders, fell to $271.6 million, down from $302.8 million a year earlier. That resulted in after tax distributable earnings per share of 63 cents, which underperformed the average analyst forecast of 69 cents, according to Refinitiv data.
A slowdown in dealmaking amid rising interest rates and higher inflation have limited the ability of private-equity firms to cash out on their assets for top dollar.
Carlyle said its revenue for asset divestments fell 30% to $165.1 million during the reported quarter.
Last month, Blackstone (NYSE:) Inc, the world’s largest private-equity firm, reported a 36% drop in first-quarter distributable earnings due to slower asset disposals, primarily in its real estate portfolio.
Carlyle’s credit business recorded strong performance during the quarter, with segment distributable earnings nearly doubling to $69 million, helped by higher fund management fees from managing more assets, including from reinsurer Fortitude Re.
Carlyle said its credit funds appreciated by 3%, while secondaries funds rose 5% and corporate private-equity funds gained 1%. Blackstone had said its corporate private-equity funds had appreciated by 2.8% while liquid credit funds gained 3%.
Under generally accepted accounting principles, Carlyle’s net income tumbled to $100.7 million, down 82% from $571.6 million a year earlier, driven by a slump in investment income.
Carlyle generated fee-related earnings of $193.4 million, raised $6.8 billion of new capital, and spent $3.8 billion on new acquisitions. Its total assets under management reached a record $381 billion, up 2% from the prior quarter, driven by fund appreciation. The firm declared a dividend of 35 cents.
