Carlyle Group Reports Flat Q3 Profits

By Echo Wang

NEW YORK (Reuters) – Private equity firm Carlyle Group (NASDAQ:CG) reported flat third-quarter profits but exceeded Wall Street's estimates due to higher fee income, offset by increased compensation expenses.

Earnings Overview

Distributable earnings, which are profits available for shareholders, totaled $367 million, or 95 cents per share, nearly unchanged from the previous year. Analysts had predicted it would report 90 cents per share, as per LSEG data.

Fee-Related Earnings

Carlyle recorded record fee-related earnings of $278 million, a 36% increase from last year, with a fee-related earnings margin of 47%, up from 37% in the same quarter last year.

Asset Management Growth

Fees generated from managing investors' money and transactions rose, countered by a rise in compensation expenses due to a compensation overhaul linking pay to investment performance. Carlyle's assets under management increased by 17% from the previous quarter to $447 billion.

Fund Performance

Carlyle's corporate private equity funds gained 4% during the quarter, driven by favorable macroeconomic trends in the U.S. and Asia.
Real estate funds grew 2%, while infrastructure and natural resources funds saw a 2% gain. Global credit funds appreciated by 3%.

Recent IPO and Investments

Carlyle recently took U.S. aircraft maintenance services provider StandardAero Inc public, marking one of the largest IPOs this year, valued at about $8 billion.
Carlyle's net accrued performance revenues, reflecting unrealized investment profits, reached $2.8 billion this quarter, a 28% quarter-over-quarter increase.
Carlyle also invested $3.9 billion in new acquisitions while retaining $85 billion of unspent capital.