Carlyle welcomes new CEO Schwartz with sharp drop in earnings

By Chibuike Oguh

NEW YORK (Reuters) – Carlyle Group Inc said on Tuesday that its fourth-quarter distributable earnings fell 52% year-on-year as the private equity firm paid out less of its investments due to a slowdown in business execution.

The drop was steeper than the 41% drop reported by competitor Blackstone Group Inc last month and sets a challenging backdrop for former Goldman Sachs Inc President Harvey Schwartz, who Carlyle named as the new chief executive on Monday officer introduced.

Schwartz, who takes up his job on February 15, is tasked with reviving Carlyle’s stock price, which has lagged behind Blackstone and other competitors like Apollo Global Management Inc and KKR & Co Inc.

Carlyle’s distributable earnings, which represent cash available to pay dividends to shareholders, fell to $433 million in the fourth quarter from $903 million a year earlier.

That translated to distributable after-tax earnings of $1.01 per share, slightly above the average analyst estimate of 97 cents, according to financial data provider Refinitiv.

Carlyle’s revenue from asset sales fell 65% year over year to $460 million as financial market volatility, geopolitical tensions, inflation and fears of a possible recession prevented the company from investing for peak stocks sell.

Its fund management fees generated $512 million in revenue, up 10% from a year ago when recent acquisitions, including those of credit manager CBAM and reinsurer Fortitude Re, began paying off. This increased fee-related revenue by 16% to $202 million.

Carlyle said its overall investment portfolio was flat in the fourth quarter as private equity funds rose 1%, real estate funds fell 1%, global credit funds rose 2% and secondary funds fell 3%. Blackstone’s corporate private equity funds were up 3.8%, while its secondary funds were down 1.8%.

Carlyle said it raised just $4.9 billion from fund investors in the fourth quarter, spent $6.8 billion on new acquisitions, retained $72 billion in unspent capital and had total assets of $373 billion. managed dollars. It announced a quarterly dividend of $0.325 per common share.

(Reported by Chibuike Oguh in New York)

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