Carlyle Group is ramping up its exit strategy, targeting up to $5bn in asset sales this year through IPOs and divestments, in line with its 2024 performance.

The private equity giant anticipates a resurgence in dealmaking despite a slow start to the year, driven by improving economic conditions and market stability.

Carlyle’s private equity co-heads, Brian Bernasek and Steve Wise, remain optimistic about the US dealmaking landscape. “Things have improved significantly over the last couple of quarters,” Bernasek told Reuters, citing greater clarity on interest rates, stabilizing inflation, and record-high stock market valuations.

Despite a decline in global M&A activity—down to $441.7bn from $523.4bn year-on-year—Carlyle, which attended the Iberia Private Equity Conference in 2024, believes its portfolio is well-positioned against trade war risks, with more than 80% of its companies operating outside tariff-sensitive sectors. 

The firm’s recent earnings call revealed a slight dip in distributable earnings from its private equity division, falling to $209.6m in Q4 2024 from $276.1m a year earlier. While fee income from private equity is expected to decline modestly in 2025, Carlyle’s latest US buyout funds posted strong returns of 15% and 21% respectively.

High interest rates have tempered large leveraged buyouts, but Wise emphasized Carlyle’s willingness to execute major deals in the current environment. “We’re not afraid to do large LBOs. Often, these are industry leaders with strong market positions,” he said.

Carlyle has a track record of high-profile buyouts, including its 2021 joint acquisition of Medline for $34bn alongside Blackstone and Hellman & Friedman. Medline’s private equity owners are now preparing for an IPO expected to exceed $50bn.

StandardAero, another Carlyle-backed firm, successfully went public in October. Bernasek sees IPOs as a compelling value driver, noting that Carlyle typically lists companies at twice their original valuation and exits at three times the initial investment.

With favorable market conditions, Carlyle is set to capitalize on its pipeline of IPOs and divestments, reinforcing its position as a dominant player in the private equity landscape.