Carlyle Group LP said on Friday the value of its natural resources-focused private equity fund portfolio fell by 8 percent in the fourth quarter, highlighting the impact of lower oil and natural gas prices on such investments.
Key producers have shown no sign of cutting output in the face of a global supply glut, driving global oil benchmarks to their lowest since 2009, down more than 50 percent from June levels.
This in turn has affected the valuation of private equity-owned companies in the sector, particularly those that assumed higher energy prices and took on high levels of debt.
Carlyle’s 8 percent average drop in its natural resources segment, which includes funds that invest in companies that search for, and produce, oil and natural gas, compares with a flat MSCI All Country World Index, the Washington, D.C.-based firm said in a statement.
Carlyle’s legacy energy funds, which include older funds that were launched together with Riverstone Holdings LLC, another buyout firm, were down 17 percent on average in the fourth quarter, Carlyle said. Carlyle’s share of performance fees in those funds, however, is smaller than in the rest of its portfolio.
Overall, Carlyle’s funds that generate performance fees appreciated by 1 percent. Carlyle’s corporate private equity funds, which accounted for about 85 percent of the firm’s earnings in the 12 months through September, rose by 7 percent.
Carlyle, founded in 1987 by David Rubenstein, William Conway and Daniel D’Aniello, had $203 billion in assets under management as of the end of September.
(Reporting by Greg Roumeliotis in New York; Editing by Steve Orlofsky)