Carlyle raises $2bn in first quarter

The firm reported profits fell by about 26% but stressed during an earnings call Tuesday that quarter-to-quarter results are not the way to measure the firm’s overall performance.

The Carlyle Group stayed busy fundraising in the first quarter, raising $2 billion across its funds platform, and launched its fourth Asia-focused buyout fund this month, the firm said Tuesday during its first quarter earnings call.

The firm didn’t disclose a target for Carlyle Asia Partners IV, but said it expects a first close later this year, according to David Rubenstein, one of the firm’s co-founders. Carlyle raised $2.5 billion for its third Asia Partners fund in 2010.

Carlyle has a “comparative advantage” in raising capital with its internal fundraising team, with includes 62 employees. “Our [limited partners] are increasing allocations to alternative asset managers,” Rubenstein said.

Institutional investors are increasing their appetite for private equity and high net worth individuals around the world are taking more of an interest in the asset class, Rubenstein said.

“The largest fundraising opportunities are ahead of us,” said Adena Friedman, the firm’s chief financing officer.

The largest fundraising opportunities are ahead of us.

Adena Friedman

The firm gave a brief update on its activity during the call without taking questions from analysts. Carlyle reported a slide in profits: economic net income – a measure that includes realised and unrealised gains – was $392 million in the first quarter, a decline of about 26 percent from $533 million in the first quarter 2011.

Economic net income in the quarter was up 54 percent from the $254 million reported in the fourth quarter, the firm said.

Unitholders should focus on Carlyle’s long-term results, said co-founder William Conway, as opposed to “quarter-to-quarter results”, as “long term investments can best maximize returns and distributions”.

The firm generated $3.8 billion in proceeds for fund level investors, which included $2.3 billion of distributions during the first quarter and $1.5 billion of realised proceeds not yet distributed, Carlyle said.

“The strong pace of realised proceeds emanated from 113 investments across 31 funds in Carlyle’s global portfolio,” the firm said in an earnings statement. The firm’s private equity business accounted for 57 percent of realised proceeds, its real assets drove 31 percent of realised proceeds and the global market strategies business produced 12 percent of realised proceeds.

In real assets, which includes real estate, infrastructure, energy and renewable energy, Carlyle generated $147 million in revenue, an increase of 41 percent compared to the fourth quarter. Energy investments drove $82 million of unrealised performance fees, the firm said.

Carlyle has no “significant” real assets related funds in the market since the firm’s sixth real estate fund closed on about $2.3 billion in the fourth quarter. The firm’s real assets funds appreciated 11 percent compared to the fourth quarter, with real estate increasing 5 percent, Carlyle said.