Carlyle swings to second-quarter profit as fund values rise

Wed Aug 7, 2013 8:09am EDT
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(Reuters) - Private equity firm Carlyle Group LP (CG.O: Quote) said on Wednesday it returned to profitability in the second quarter versus a year ago, but less strongly than expected, as its funds appreciated in value.

Second-quarter economic net income (ENI), a closely watched earnings metric that takes into account the market value of an alternative asset manager's funds, jumped to profit of $156 million from a $57 million loss a year ago.

This translated into a second-quarter post-tax ENI per adjusted share of 39 cents, compared with an average estimate of 56 cents in a Thomson Reuters poll.

The rise in ENI was primarily driven by a 3 percent rise in the value of its funds that generate carried interest - the slice of investment profits it receives. In the second quarter of 2012 it recorded a 2 percent depreciation.

Pretax distributable earnings, which show how much cash is available to pay dividends, was $163 million compared with $116 million a year ago, as Carlyle took advantage of strong equity markets to exit more investments.

Asset sales in the second quarter included stakes in Hertz Global Holdings Inc (HTZ.N: Quote), Nielsen Holdings NV (NLSN.N: Quote), SS&C Technologies Holdings Inc (SSNC.O: Quote) and Cobalt International Energy Inc (CIE.N: Quote) at valuations of between two and five times their original investment.

Total assets under management were $180.4 billion at the end of June, up from $176.3 billion at the end of March. Carlyle said it raised $6.9 billion in new capital from investors during the quarter.

Carlyle said it had available capital for deals, or so-called "dry powder," of $49 billion at the end of the quarter, including $20.1 billion in private equity and $9.2 billion in energy and real estate.

Carlyle declared a second-quarter dividend of 16 cents per share, in line with its distribution policy.

(Reporting by Greg Roumeliotis in New York; Editing by Jeffrey Benkoe)

A general view of the lobby outside of the Carlyle Group offices in Washington, May 3, 2012. REUTERS/Jonathan Ernst