Carlyle Group has quiet quarter as fee loss evaporates earnings

 
Michael Bow
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THE CARLYLE Group, the Washington-based firm that owns a host of British companies, revealed flat first quarter profits yesterday amid a downturn in fee earnings.

The company, which owns a controlling stake in UK cabbie Addison Lee and also holds stakes in high street chemist Boots and the RAC, said economic net income – a common measure of profit – increased by just $2m to $394m (£254m) on an annual basis.

It said the amount of cash coming from management and performance fees, so-called distributable earnings, plunged to $168m versus $179m a year ago, bucking a trend for wider gains made by rivals across the sector this quarter.

The cash drop was led by a slide in fees from two funds, Europe Partners III and Japan Partners II, as they exited their investment periods, and higher fundraising costs.

Carlyle said it received zero fee-related earnings from its corporate private equity business as a result, a drop from $14m posted this time last year.

Carlyle, which was a pioneer of private equity investing in the 1980’s, floated on the Nasdaq in May 2012, along with a host of rival private equity managers seeking public listings.

Of those, Oaktree Capital Management, Apollo Global Management, KKR and Blackstone have all posted thumping profits this quarter, leaving Carlyle trailing the pack.

Total assets under management came in at $176.3bn, up 11 per cent year on year, led by $6bn more capital given over to the firm by investors.