11:18 a.m. | Updated Most of the publicly traded private equity giants proudly reported glowing fourth-quarter earnings.
The Carlyle Group isn’t one of them.
The alternative investment giant disclosed on Thursday a 28 percent drop in fourth-quarter profit from the same time a year ago, as the growth of its portfolio companies slowed. That sent the company’s stock down more than 8 percent by midmorning, to $33.70.
Carlyle reported fourth-quarter profit of $182 million, expressed as economic net income, compared with $254 million in the year-earlier period. That amounts to 47 cents per unit. Analysts on average had expected about 66 cents per unit, according to a survey by Capital IQ.
And Carlyle’s distributable earnings, a measure the firm prefers because it tracks actual payouts to its limited partners, fell 24 percent, to $188 million. Using generally accepted accounting principles, Carlyle earned $12 million in net income.
The results fall short of those of rivals like the Blackstone Group and Kohlberg Kravis Roberts have reported. Private equity firms in general have gained from improvements in the markets, which have lifted the valuations of their portfolios and bolstered their core business of buying and selling companies.
Carlyle attributed the decline in economic net income to a smaller appreciation in the value of its portfolio. It reported a 4 percent gain for the quarter, compared with a 7 percent increase in the period a year earlier.
The decision to delay reaping carried interest from its latest mainstay fund, Carlyle Partners V, weighed on distributable earnings. The company opted to hold off, given the relative freshness of the fund and the influx of new investments like the buyouts of the TCW Group and Getty Images.
Carlyle highlighted its strong fund-raising and gains from selling investments. The firm raised $4.6 billion in new money for the quarter and $14 billion for the year, compared with a total of $6.6 billion raised in all of 2011. It generated $6.8 billion in realized proceeds for the quarter and $18.7 billion for the year, compared with $17.6 billion in 2011.
“We had another excellent year,” David M. Rubenstein, one of Carlyle’s co-chief executives, said in a statement. “Our performance over the past two years was marked by steady, continuous progress across our business.”
DealBook: Carlyle's Profit Fell in 4th Quarter as Growth Slowed
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DealBook: Carlyle's Profit Fell in 4th Quarter as Growth Slowed
