Carlyle beats first-quarter profit estimates as distributable earnings surge

Carlyle Group Inc (CG.O) said on Thursday that its first-quarter distributable earnings rose 73% year-on-year, beating Wall Street’s expectations, as asset sales in its private equity and credit investment divisions generated strong performance fees ahead of the coronavirus-induced market turmoil.

Carlyle said distributable earnings (DE) – the cash available for paying dividends to shareholders – rose to $175 million from $100.8 million a year earlier. This resulted in DE per share of 48 cents, which surpassed the average analyst forecast of 40 cents, according to data from Refinitiv.

Global markets nosedived in the first quarter as the pandemic spread from China across the world, forcing Carlyle to mark down the value of its portfolio. Its corporate private equity funds depreciated by 8% in the quarter, while credit funds fell by 21%. Its real estate funds fell by only 1%, while its natural resources funds depreciated by 22% as energy prices plunged.

By comparison, Blackstone Group Inc (BX.N), the world’s largest private equity firm, said last week that its private equity portfolio fell by 21.6% in the first quarter, while opportunistic and core real estate funds fell by 8.8% and 3.9% respectively.

Blackstone reported a 4% rise in its first-quarter distributable earnings, though this was driven by a rise in management fees rather than asset sales.