Private equity is undoubtedly the largest asset class of The Carlyle Group, but private credit continues to be a steady source of capital for the global investment firm and is growing.
“We are executing on our strategic plan and are already ahead of schedule,” Mark Jenkins, Carlyle’s managing director and head of credit, told Private Debt Investor. The firm last week reported yet another strong quarter of earnings.
In global credit, Carlyle clocked fee-related earnings of $33 million for the quarter, an increase of 135 percent from a year ago. The results exclude $8 million in recovered subordinated CLO fees in the third quarter of 2020 that were deferred.
“Private credit has significant room to grow and increasingly investors are rotating from the liquid public markets to private markets, which offer an illiquidity premium,” Jenkins said.
Carlyle Global Credit’s total assets under management rose to $66 billion, an increase of 19 percent for the year to date and of 9 percent on the second quarter. The firm attributes the growth to record levels of new CLO originations and fundraising.
“We focus on investing in high-quality companies that are well insulated from inflationary risks and have a solid growth outlook,” said Jenkins, noting that Carlyle’s credit deployments include the life sciences and healthcare sectors. “Successful credit investing is about avoiding undue risk.”
Fundraising in the quarter totalled $4.7 billion for global credit, including four new CLOs, capital raised for its second opportunistic credit fund and new SMA capital raised. Carlyle is targeting growth in global credit to $80 billion in 2024, from the $66 billion as of 30 September.
Carlyle’s global private equity fee-related earnings totalled $93 million for the third quarter, compared with $83 million in the second. Private equity’s total assets under management were $161 billion, an increase of 7 percent since the second quarter.
Overall, Carlyle’s fee-related earnings for the third quarter totalled $151 million, a 28 percent increase from the $119 million last year. For the year to date, its fee-related earnings were $424 million, 23 percent higher than last year. The firm’s total assets under management are now at a record setting $293 billion, an increase of 6 percent since last quarter and a 19 percent increase for the year to date.