Carlyle raised $5.5B in fresh capital, deployed $1.1B in Q1; profit declines

Private equity firm Carlyle Group LP said it deployed $1.1 billion across 72 new or follow-on investment rounds in existing portfolio firms and clocked exits worth $3.1 billion from 124 investments during the first quarter.

It also said it raised $5.5 billion in fresh capital taking the total raised over the last 12 months to $22.8 billion. This took total assets under management (AUM) to a kissing distance of $200 billion.

The PE firm has AUM of $198.9 billion as of Q1 2014. Its total dry powder is pegged at $56.3 billion, comprising $23.9 billion in corporate private equity, $1.5 billion in global market strategies, $10.1 billion in real assets and $20.8 billion in solutions.

Its total fee-earning AUM was $142.1 billion as of Q1 2014. In the last quarter this was boosted by the addition of new commitments in Carlyle’s latest vintage buyout funds in Europe and Asia and its new international energy fund, in addition to other fundraising across the Carlyle platform.

However, on financial performance parameters the company had a disappointing quarter with the key indicator economic net income (ENI) declining 18 per cent to $322 million over the year-ago quarter.

The results were weighed down by declines in Carlyle’s global market strategies business, with investments in equities and credit, and in its real estate segment. Its revenues were up 5 per cent to $897 million in the same period.

ENI was affected by appreciation of 6 per cent in Carlyle’s carry fund portfolio. Corporate private equity carry funds were up 8 per cent, global market strategies’ carry funds increased 3 per cent and real assets carry funds increased 2 per cent compared with the end of Q4 2013.

Distributable earnings, which include both management and performance fees and show cash available to pay dividends, rose 7.2 per cent to $183.3 million, before taxes.

“Carlyle had a solid start to 2014, which has resulted in our last 12-month distributable earnings increasing 25 per cent over the prior 12-month period to more than $850 million. Fundraising, fund performance and investing activity are all running at strong levels. As new top talent joins our seasoned leadership team and we launch new fund strategies and make targeted acquisitions, Carlyle continues to meet the increasingly complex demands of our global investor base," said David M Rubenstein, co-CEO of Carlyle.

“Carlyle’s funds produced great returns for our fund investors this quarter, led by an 8 per cent increase in the value of our PE carry funds, which helped drive a 36 per cent increase in Carlyle’s net accrued performance fee balance year over year to $2 billion. Although the investing environment has grown more challenging over the past few quarters, we have been successful in committing to several exciting investment opportunities, and we are executing sales at attractive prices around the world,” Carlyle co-CEO William E. Conway, Jr. said.

(Edited by Joby Puthuparampil Johnson)

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