Carlyle realises $5.8bn as ENI falls(1)

Asian credit opportunities have proved popular with investors and the firm is also eyeing structured credit in the region, said David Rubenstein.

The Carlyle Group reported a strong quarter for realisations, at $5.8 billion, while economic net income fell to $180 million, down from $289 million a year earlier and $273 million in the first quarter. 

The global investment manager also saw strong fundraising — $4.7 billion in the second quarter and $9.1 billion in the six months to 30 June. In a call with analysts, management said that momentum remains strong across most of its funds still in market. 

The firm’s second energy-focused mezzanine fund has raised more than $2 billion of its $2.5 billion target, while its Asia credit fund was also gaining traction, although the company did not reveal how much had been raised. 

Asked what areas Carlyle viewed as the most interesting opportunities, co-chief executive David Rubenstein listed several: distressed debt, core plus, growth investments in Asia, infrastructure and energy. Structured credit was also particularly interesting in Asia, he added.

Strong realisations, particularly in private equity and $149 million in performance-related fees, boosted distributable earnings to $386 million, up from $323 million in the second quarter of 2014 and $148 million in the first quarter of this year. The firm announced a dividend of 89 cents per unit. 

The firm invested $1.6 billion in the second quarter as deployment failed to keep pace with realisations.

Rubenstein said that Carlyle was taking a cautious approach to investment, adding that the firm had established a number of investment partnerships, though he did not mention the planned joint-venture with Madison Capital, as reported by PDI. 

Of the firm’s $2.5 billion Energy Fund, only 5 percent has been invested, noted one analyst on the call. Caution in energy investments is the firm’s watchword at the moment, said Rubenstein, adding that low public equity valuations had not yet tempted the firm into buying because there was still risk. 

Carlyle reported total assets under management (AUM) of $192.8 billion, as of the end of June, down from the $202 billion in AUM a year earlier. Fee-earning AUM stood at $130 billion.