Carlyle continues fundraising push even with $73 bln of dry powder

  • Fundraising for long-dated PE fund expected this year
  • Firm to launch new energy, credit, Europe RE funds
  • Carlyle AUM hits $201 bln

Carlyle Group has more than $27 billion of unactivated investment capital, setting the stage for a massive influx of management fees as the $201 billion asset manager continues to amass larger investment funds. The firm has $73 billion of dry powder, total.

Carlyle launched its ongoing fundraising push in 2016 when Co-Founder David Rubenstein pledged to raise $100 billion for new funds across its investment platform by 2020. The firm will likely surpass the $80 billion threshold by year’s end, Co-CEO Glenn Youngkin said on an earnings call.

“We have a great slate of products coming to market in the back half of this year and going into 2019,” Youngkin said. One upcoming product will be its next long-dated PE pool, Carlyle Global Partners.

The first Global Partners fund, which closed on $3.6 billion in 2016, can hold investments longer than what’s allowed through Carlyle’s traditional buyout funds. The firm also expects to market new funds managed by its international energy, European real estate and credit teams as well, Youngkin said.

Investors put $7.7 billion into Carlyle Group funds in Q1, the firm’s earnings release says. Fee-related earnings fell $11 million from the year-earlier period. LPs will begin paying management fees on new funds once they’re activated, which should cause quarterly fee-related earnings to rise throughout the year, Chief Financial Officer Curt Buser said on the call.

Activating new funds also will signal an ability to deploy larger checks into new deals. Last month, Carlyle Group and Singaporean sovereign-wealth fund GIC won a bidding war to acquire a specialty chemical business from Azko Nobel at a valuation of 10.1 billion euros ($12.11 billion), one of the largest European deals in recent memory. That transaction is expected to close later this year.

Carlyle invested roughly $4 billion across its PE, real assets, credit and investment solutions platforms in the first quarter. The firm deployed $21.6 billion over the year ended March 31, a period marked by high prices and increased competition for new assets.

“We don’t love that the environment is so high-priced,” Co-CEO Kewsong Lee said on the call. Recent volatility, coupled with the difficult market dynamics for buyers, underscored the firm’s focus on effecting lasting operational changes within its portfolio companies, he added.

Carlyle Group was founded in 1987 in Washington by Rubenstein, William Conway Jr. and Dan D’Aniello. The founders stepped away from day-to-day management at the firm at the start of the year, elevating Youngkin and Lee to co-CEOs.

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David Rubenstein (left) of Carlyle holds a discussion with former British Prime Minister David Cameron during the SALT conference in Las Vegas on May 17, 2017.  REUTERS/Richard Brian

Correction: The headline originally used the figure $27 billion, which refers to the amount of unactivated capital Carlyle has raised.