Carlyle Group reported 8 November that its third-quarter net income declined as a slump in publicly traded stocks hit the value of its private equity holdings.
The Washington-based asset manager posted net earnings of $280.8m, or 77 cents a share, in the three months ended 30 September. That is 47% less than the same period of 2021, when the firm earned $532.8m, or $1.46 a share.
Carlyle saw a smaller hit to its distributable earnings, or profits that can be returned to shareholders, which fell about 12% to $644.4m.
Several of Carlyle’s peers among publicly traded alternative-asset managers struggled during the quarter, as declines in public markets forced them to write down the value of their holdings. The S&P 500 index declined by about 5% during the quarter.
Carlyle’s private equity funds appreciated by 1% over the three months through September and its real-estate funds gained 2%, while its credit portfolio was flat. Infrastructure and natural resources funds delivered the best performance for the firm, appreciating 8% during the quarter and gaining 45% through this year’s first nine months.
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The firm also collected more fees on the assets it manages. These fees increased by about 32% to $535.9m.
Carlyle said its assets under management declined by 2% from June 30 to $369bn, mainly due to a high level of investment sales. The firm’s AUM rose 23% from the beginning of the year, including $25bn raised this year through September.
In August, Carlyle announced that Kewsong Lee would step down as chief executive officer immediately and leave the firm at the end of the year. William Conway, a Carlyle co-founder and former co-CEO, is serving as interim CEO until a permanent successor can be found, the firm said.
Lee sought to move Carlyle beyond its roots as a manager of buyout investments, expanding the firm’s offerings in areas including credit, insurance and infrastructure capital. But since Lee took over in 2018, Carlyle’s shares have lagged behind some publicly traded peers.
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This article was published by The Wall Street Journal, a fellow Dow Jones Group publication