Aug 5 (Reuters) – Global investment firm Carlyle topped Wall Street estimates for second-quarter profit on Wednesday, as fee-related earnings climbed and the group booked proceeds from deals in Japan and the U.S. Distributable earnings, which represent the cash used to pay dividends to shareholders, came in at $1.07 per share, 18% higher than a year ago, beating expectations of 91 cents, drawn from a LSEG poll of analysts.The traditional private equity model of buying and selling companies has been hampered by rising interest rates in recent years, but Carlyle’s larger peers KKR and Blackstone reported improving returns from cashing in on their investments in the second quarter.
Fee-related earnings, which provide stable income, rose 11% from a year ago to a record $357.7 million.
Carlyle’s shares rose 1.7% in premarket trading.
Transaction and portfolio advisory fees, which Carlyle earns from arranging capital market deals for its portfolio companies and other clients, more than doubled to $110.5 million from a year earlier. Big deals Carlyle recognized in the three months to June included the sale of Bermuda-based specialty insurer Vantage Group and Japanese lighting products supplier Iwasaki Electric. Realized net performance revenue rebounded from a slump in the previous quarter, when asset sales failed to translate into gains for shareholders. Inflows totaled $16.8 billion, boosted by a $5 billion commitment to its next U.S. buyout fund through a structured deal it offered to cornerstone investors in May. Credit strategies attracted $5.8 billion and the AlpInvest secondaries business $4.5 billion. Total assets under management stood at $485 billion, which is 4% higher than a year ago. AlpInvest grew 16% in that time, credit swelled 4%, while private equity assets shrank 1% as assets were sold.
Carlyle’s stock has lost more than 14% of its market value so far this year, in line with other alternative asset managers.
(Reporting by Isla Binnie in New York and Utkarsh Shetti in Bengaluru)
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