Carlyle Group LP’s second-quarter profit soared as its investments appreciated, adding to private-equity firms’ strong showing for the period.
For the three months ended June 30, the Washington, D.C., asset manager reported earnings of $57.6 million, or 59 cents a share, up from $6.1 million, or 7 cents a share, in the same period a year earlier.
Economic net income, a closely watched performance measure that reflects changes in the value of the firm’s holdings, rose to $274.8 million, or 81 cents a share, from $115.1 million, or 35 cents a share, a year earlier. The latest result topped the 41-cent average estimate of analysts in a FactSet poll.
Private-equity managers are benefiting from global economic growth and healthy investor appetite for ownership in both public and private companies, along with other assets such as corporate debt and real estate.
Carlyle’s private-equity funds appreciated 8% during the period. Blackstone Group LP’s buyout funds appreciated 2.8% during the period while KKR & Co.’s private-equity portfolio gained 7.3% during the quarter. The S&P 500 rose 2.6%.
“We continue to deploy capital at a steady pace,” Carlyle co-Chief Executive William Conway said in a statement. “The environment for new investments remains competitive, but our deep, global teams continue to find good investments.”
Distributable income, the slice of profits available for payout to shareholders, fell to 56 cents a share from 84 cents a year earlier. Carlyle said it would pay a 42-cent dividend, down from 63 cents a year earlier.
As of June 30, Carlyle had $169.8 billion in assets under management, up from $161.9 billion the prior quarter but down from $175.6 billion in June 2016.
Carlyle took a $6 million write-off related to settlements with two investors in commodities investment funds the firm had managed, which lost hundreds of millions of dollars in a Moroccan refinery deal gone awry. Liability insurance kept the write-down near the low end of the firm’s previous estimate of up to $60 million. The settlements mark the completion of Carlyle’s exit from hedge-fund businesses it had acquired from 2010 to 2014, which struggled due to poor performance.
Write to Matt Jarzemsky at firstname.lastname@example.org