This content is from: Corner Office

Fee Earnings Jump at Carlyle Group

The private equity firm reported that its fee earnings soared last year to levels that are unlikely to recur.

Private equity firm Carlyle Group is reaping the rewards of the fees it charges clients, with fourth-quarter earnings from fees swelling six times the level seen in the same quarter of 2017. 

Carlyle raked in $175 million from fees during the fourth quarter, compared to $27 million during the same period a year earlier, according to the firm's earnings statement Wednesday. Fee-related earnings for 2018 were $350 million, up from $192 million in 2017.

“In 2018, Carlyle delivered a record level of fee related earnings," said co-chief executive officers Kewsong Lee and Glenn Youngkin in the statement. “We have strong momentum heading into 2019 as we continue to drive performance and growth.” 

The firm said it doesn’t expect fee-related earnings to continue at such a high level. According to its statement, the fee-related earnings were bolstered by insurance recoveries related to its former commodities business, transaction fees tied to a few large investments, and catch-up management fees. 

Despite fee growth, Carlyle's portfolios depreciated during the fourth quarter. Its corporate private equity portfolio and global credit carry funds both fell by two percent, while its real assets fell by seven percent during the quarter. Real assets depreciation was led by legacy energy assets, which depreciated by 16 percent during the quarter.  

Still, the alternative asset manager saw appreciation in those portfolios and funds for the full year. Corporate private equity, the global credit carry funds, and the real assets were each up by five percent for the full year. 

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Unlike many traditional asset managers, Carlyle saw total assets under management climb in 2018.  

The firm's assets rose to $216.5 billion last year, an increase of 11 percent from 2017. According to Carlyle, the increase is the result of $33.1 billion in fundraising and fund appreciation.

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