Carlyle’s Lee on $130bn-plus goal: ‘We are very much ahead of schedule’

The Carlyle Group could smash its $130 billion-plus fundraising goal earlier than expected.

Speaking on the firm’s second-quarter earnings call on Thursday, chief executive Kewsong Lee said: “We are very much ahead of schedule; we’re seeing real success driving organic growth in our biggest and most established funds.”

Lee noted that the firm remains “confident in the ‘plus’ of our ‘$130 billion-plus’ target by 2024”, made possible by attractive returns from its largest funds and with net accrued carry balance at record levels.

“It’s early days, we have several more years to go, but suffice it to say that initial feedback is positive. And we very much are focused on the plus of that $130 billion-plus target we laid out for you.”

Carlyle revealed in February its 2021-24 strategic plan, which includes a fundraising goal of at least $130 billion. Roughly 50 percent of fundraising will come from its global private equity business, which also includes real estate and infrastructure, PEI reported. The firm expects its flagship corporate PE funds to drive much of this growth across the US, Europe and Asia, with fund sizes growing 20 percent or more for these vehicles.

Fundraising has increased nearly 50 percent year to date to $18.2 billion, according to earnings materials. It raised $10.4 billion across strategies during the quarter, more than double the $4.8 billion it gathered a year before.

Lee said the firm has already closed on nearly $7 billion of capital and expects a hard-cap of approximately $8 billion for its real estate opportunistic fund. The firm’s recently closed secondaries and co-investment strategies were each approximately 40-50 percent larger than their predecessors. It is seeking up to $27 billion for its US flagship fund Carlyle Partners VIII, Bloomberg reported.

Carry fund appreciation was up year-on-year across corporate equity, real estate and natural resources at 28 percent, 15 percent and 17 percent, respectively. That performance drove net accrued carry for the firm to a record $4 billion as of end-June, up 72 percent from Q4 2020.

Carlyle invested a total of $8.1 billion during the quarter across strategies, up from $2.9 billion in the equivalent period last year.

Assets rose to $276 billion as of end-June this year, up 6 percent from the prior quarter and 12 percent YTD. This was largely attributable to “strong appreciation across the firm’s carry fund portfolio as well as strong fundraising activity”, the firm said in a statement.

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