Carlyle Group Inc, the private equity and alternative asset manager global leader with 425 billion USD assets under management has taken the route of the other leading private equity and alternative asset management firms of owning an insurance business and using the proceeds to reinvest the stable, long-term almost perpetual in maturity insurance premiums into private equity, real estate, private credit and lending, according to Wolfteam Ltd.'s analysis.
The perpetual fee earning assets under management or insurance fees are invested 73 billion USD in assets in real estate, 4 billion USD in direct lending and others.
Basically, Carlyle Group is doing a carry trade in maturity from the almost perpetual insurance fees into real estate and direct lending.
5
• Fund management fees increased 5% in 2Q’24 from the comparable period in 2023 primarily driven by the impact of fundraising across our platform, particularly in our Global Investment Solutions products, as well as an increase in fees
earned under the Fortitude strategic advisory services agreement, partially offset by the impact of step-downs in certain products in our Global Private Equity segment. In funds on which management fees are based on invested capital, the
impact of capital deployment was largely offset by the impact of realizations.
• Investment income, including performance allocations, in 2Q’24 primarily reflects the accrual of unrealized performance allocations driven by appreciation in our carry fund portfolio, while Investment loss, including performance allocations,
in 2Q’23 reflects an investment loss of $104 million related to the dilution of our ownership in Fortitude as well as the reversal of unrealized performance allocations in certain carry funds.
• Equity-based compensation increased in 2Q’24 from the comparable period in 2023, driven by awards granted in February 2024, including awards to certain senior Carlyle professionals that are subject to vesting based on the achievement of
stock price performance conditions over a service period of three years.
• Performance allocations and incentive fee related compensation in 2024 reflects the realignment of our employee compensation program, which became effective December 31, 2023 and increased the proportion of our accrued performance
allocations used to compensate our employees. As a result of the realignment, we expect our cash-based compensation and benefits to decrease and performance allocations and incentive fee related compensation to increase in 2024.
(Dollars in millions, except per share amounts) 2Q'23 2Q'24 YTD 2Q'23 YTD 2Q'24
REVENUES
Fund management fees $ 507.8 $ 534.4 $ 1,008.6 $ 1,058.0
Incentive fees 21.0 31.3 40.8 57.5
Investment income (loss), including performance allocations (254.0) 286.3 (81.5) 202.4
Revenue from consolidated entities 137.1 165.6 259.0 330.5
All other revenues 50.2 52.1 94.2 109.7
Total Revenues 462.1 1,069.7 1,321.1 1,758.1
EXPENSES
Cash-based compensation and benefits 270.6 206.3 530.8 428.2
Equity-based compensation 68.0 125.2 122.4 233.5
Performance allocations and incentive fee related compensation (92.2) 144.2 13.5 71.4
General, administrative and other expenses 168.5 187.9 327.7 335.6
Expenses from consolidated entities 102.1 152.1 195.8 276.7
Interest and other non-operating expenses 30.7 30.1 60.5 61.1
Total Expenses 547.7 845.8 1,250.7 1,406.5
Net investment income (loss) of consolidated funds 15.6 (5.1) 19.2 (12.1)
Income (loss) before provision for income taxes1 (70.0) 218.8 89.6 339.5
Provision (benefit) for income taxes (7.3) 69.5 27.0 91.4
Net income (loss) (62.7) 149.3 62.6 248.1
Net income attributable to non-controlling interests 35.7 1.1 60.3 34.3
Net income (loss) attributable to The Carlyle Group Inc. Common Stockholders $ (98.4) $ 148.2 $ 2.3 $ 213.8
Net income (loss) attributable to The Carlyle Group Inc. per common share:
Basic $ (0.27) $ 0.41 $ 0.01 $ 0.59
Diluted $ (0.27) $ 0.40 $ 0.01 $ 0.58
Income (loss) before provision for taxes margin2 (15.1) % 20.5 % 6.8 % 19.3 %
Effective tax rate 10.4 % 31.8 % 30.1 % 26.9 %
Net performance revenues3 $ (154.6) $ 54.0 $ (99.5) $ (30.2)
Carlyle Second Quarter 2024 U.S. GAAP Results
Net income attributable to The Carlyle Group Inc. common stockholders was $148 million for Q2 2024, or $0.40 per
share on a diluted basis
No comments:
Post a Comment