Private equity firm Carlyle Group LP (CG.O) posted first quarter earnings that handily beat expectations on Wednesday, in line with its peers, after a buoyant stock market lifted investment returns across the industry.
The results are the latest sign that a rally in the S&P 500 .SPX to a record high in the first quarter had served U.S. buyout firms well by bolstering returns. Carlyle’s peers Blackstone Group LP (BX.N), KKR & Co LP (KKR.N) and Apollo Global Management LLC (APO.N) all reported first-quarter earnings that surpassed expectations.
Carlyle said it earned an economic net income (ENI) of $364.6 million after taxes, more than six times what it earned a year earlier. That translated into $1.09 of ENI per share after taxes, well above analyst forecasts for 38 cents per share and the second-highest on record since another bumper earnings since the fourth quarter of 2013, it said.
ENI is a crucial performance measure for U.S. private equity firms as it accounts for unrealized gains or losses in investments.
The Washington D.C.-based firm said its private equity investments appreciated 9 percent in the first three months, better than a 5.5 percent gain in the S&P 500 index in the same period.
Holdings in the energy sector, currently the biggest industry Carlyle is invested in, has also fared well as oil prices steadied around $50, Carlyle said. A source close to Carlyle but who declined to be named said Carlyle was most invested in upstream production of energy at the moment.
Despite the strong results, Carlyle’s distributable earnings, which show cash available to pay dividends, fell to $55 million from $129 million a year ago.
That translated to distributable earnings of 13 cents a share, compared to 35 cents a year earlier.
Photo: A general view of the lobby outside of the Carlyle Group offices in Washington, May 3, 2012. Reuters/Jonathan Ernst