(Reuters) – Carlyle Group LP (CG.O) reported a 13 percent year-on-year drop in first-quarter profit, as it was asked to pay $112 million in a French tax court case involving one of its real estate funds, yet it still beat most analysts’ expectations on performance.
Carlyle had reserved only $82.5 million for the case, which involves tax exemptions claimed by one of its European funds on the sale of real estate assets in Paris. Carlyle is now appealing the French court ruling.
The value of Carlyle’s private equity funds, however, increased by 8 percent in the quarter, almost 7 percentage points more than the S&P 500 .INX. By comparison, peers Blackstone Group LP (BX.N) and KKR & Co LP (KKR.N) saw a 6.4 percent and 5.1 percent appreciation respectively in their private equity funds in the first quarter.
The Washington, D.C.-based private equity firm said that economic net income (ENI), an earnings metric that factors in the mark-to-market value of its portfolio, was $273 million in the first quarter of 2015 versus $312 million in the corresponding period in 2014.
This translated into post-tax ENI per share of 80 cents per adjusted unit, ahead of the average analyst forecast of 70 cents in a Thomson Reuters poll.
Distributable earnings came in at $148 million in the quarter, down from $183 million a year earlier but higher than what most analysts expected, as
Carlyle continued to cash out on its investments.
Carlyle said it had $60.4 billion in so-called dry powder as of the end of March available to spend on investments.
Carlyle’s assets under management were $192.7 billion as of the end of March, down from $194.5 billion as of the end of December.
In the first quarter, Carlyle finished raising its first international energy fund at its cap of $2.5 billion and a natural resources fund at its cap of $5.3 billion.
Carlyle declared a first-quarter distribution of 33 cents per common unit.