Carlyle Growth Push Tested as Big Money Goes to Fewer Firms

(Bloomberg) -- Carlyle Group's new leaders are facing the challenge of fueling growth as the firm tries to bulk up businesses outside of private equity.

Bigger investors are giving more capital to a smaller group of industry peers, Co-Chief Executive Officer Glenn Youngkin said on an earnings conference call Tuesday. While Washington-based Carlyle said it's still on track to meet its four-year goal of raising $100 billion by the end of 2019, it projected raising $25 billion this year, less than the record of $43.3 billion in 2017.

The firm is in a period of transition. Youngkin and co-CEO Kewsong Lee started in their roles on Jan. 1. David Rubenstein and Bill Conway, Carlyle's co-founders, became co-executive chairmen. The company, whose private equity group has traditionally brought in the majority of its profits, is focused on expanding its credit and real estate businesses.

Carlyle raised $7.7 billion from investors in the first quarter, according to a statement Tuesday. The credit group raised less than $1 billion in the quarter, growing to $33.8 billion in assets under management, up 15 percent from a year earlier. Management fees increased 22 percent from the prior year.

About 60 percent of Carlyle's investors are in six or more of its funds and 150 new institutional investors have put $3 billion into its funds, Youngkin said.

In real assets, which include real estate, Carlyle brought in $1.3 billion. The Carlyle Europe Realty Partners fund is halfway to its target of 500 million euros ($599.6 million), according to a person familiar with the fundraising. The firm invested almost $2 billion in the space during the quarter, more than double the amount it put to work a year earlier, the company said.

Carlyle's total assets under management increased to $201.5 billion.

--With assistance from Gillian Tan

To contact the reporter on this story: Heather Perlberg in Washington at hperlberg@bloomberg.net.

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alan Mirabella, Mary Romano

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