Abu Dhabi-backed Carlyle Group profit falls 11% in Q3

Unlike some rivals, it did not take advantage of favourable capital markets to exit investments

Carlyle Group, the US private equity firm in which Abu Dhabi’s Mubadala Development Company owns a 7.5 percent stake, posted an 11 percent drop in third-quarter profit on Wednesday as asset sales generated less cash for shareholders than in any other quarter since the alternative asset manager went public.

While Carlyle's fund portfolio appreciated 4 percent in the quarter, compared with 3 percent a year earlier, it did not take advantage of favourable capital markets to exit investments to the extent some of its peers such as Blackstone Group did.

"We have a public portfolio of about $16bn. This is a pretty good time to be exiting. That does not mean that we will do secondary sales in any of those companies this quarter, but if the time and price is right I think we will," Carlyle co-Chief Executive William Conway told analysts on a conference call.

Economic net income (ENI), an earnings measure comprising cash and paper profits or losses based on how funds have been marked to market, declined to $195m in the third quarter from $219m a year earlier.

This translated into post-tax ENI per adjusted share of 51 cents, well below the average forecast of analysts in a Thomson Reuters poll of 60 cents.

Carlyle's pre-tax distributable earnings, which show how much cash is available to pay dividends, were $105m, the lowest total for any quarter since the company went public in May 2012, as Carlyle monetised less of its assets. The year-earlier figure was $207m.

Carlyle said it had additional portfolio companies in the pipeline which it expects to go public over the next two quarters, generating more performance fees for itself.

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