Rise in value of assets boosts Carlyle’s profit

Michael Bow
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US investment firm Carlyle Group yesterday swung into the black in the third quarter after firing on all cylinders to boost fundraising, investor returns and carry fund values.

The Washington DC based company, which previously owned Dunkin’ Donuts in the US and Le Figaro newspaper in France, posted a three per cent increase in returns for its investment funds for the quarter, led by strong performance from its buyout activities.

This helped boost economic net income, a measure of profitability for alternative investors, up to $219m (£137m) for the third quarter, better than the second quarter, when it posted a $57m loss.

It also planted in the ground $1.6bn of new cash from investors in 86 new investments across some 24 of its funds and harvested $5.1bn from 117 different investments to give back to investors.

Bucking the tough fundraising environment, Carlyle also raised an extra $3.4bn for its funds from investors for the quarter. This took the total to $9.4bn for the year to date.

The private equity group, which floated on Nasdaq in May, said it was “very confident” of the future direction of its business.

“Investors are coming back into the market,” co-founder David Rubenstein said. “They recognise alternative investments probably produce better returns than any other kind of investment.

“But nobody is making commitments overnight that would welcome a fundraiser’s heart.”

Carlyle Group, which was founded in 1987 by Rubenstein, William Conway and Daniel D’Aniello and is headquartered on the same avenue as the White House in Washington DC this week also announced it had raised $1.1bn for its new Carlyle Equity Opportunity Fund.

Rubenstein said the days of megafunds made up of $10bn to $20bn of commitments were over.

“US funds today will be smaller,” he said. “That is a major change in the industry. Now if you have a good fund you raise a successor that is smaller.”