Carlyle Group Inc said on Tuesday that its fourth-quarter distributable earnings fell 52% year-on-year, as the private equity firm cashed out on fewer of its investments due to a slowdown in dealmaking.
The decline was steeper than the 41% decline reported last month by peer Blackstone Group Inc and sets a challenging backdrop for former Goldman Sachs Inc president Harvey Schwartz, who Carlyle unveiled as its new chief executive on Monday.
Schwartz, who starts on Feb. 15, is tasked with revitalizing Carlyle's stock price, which has underperformed Blackstone and other rivals such as Apollo Global Management Inc. and KKR Co Inc.
In the fourth quarter, Carlyle's distribution earnings, which is the cash available to pay dividends to shareholders, fell to $433 million from $903 million a year ago.
According to financial data provider Refinitiv, after-tax distributable earnings per share were $1.01, which was slightly higher than the average analyst estimate of 97 cents.
Financial market volatility, geopolitical tensions, inflation and worries about a possible recession prevented the firm from divesting investments for top dollar, as it fell 65% to $460 million from a year ago.
The fund management fees generated $512 million in income, a 10% increase over a year ago, as recent acquisitions, including those of credit manager CBAM and reinsurer Fortitude Re, started to pay off. Fee-related earnings went up 16% to $202 million.
Carlyle said its total investment portfolio was flat in the fourth quarter, as private equity funds gained 1%, real estate funds fell 1%, global credit funds rose 2% and secondary funds fell 3%. Blackstone's corporate private equity funds rose 3.8%, while its secondary funds fell 1.8%.
In the fourth quarter, Carlyle raised just $4.9 billion from fund investors, spent $6.8 billion on new acquisitions, had $72 billion in unspent capital and had $373 billion of total assets under management. The company declared a quarterly dividend of $0.325 per share.