First-quarter profits for Carlyle Group LP plunged 14% as real estate ventures incurred losses and credit funds growth slowed compared with a year ago, the world’s second largest manager of alternative assets said.
Post-tax economic net income, an indicator of profit without taking into account some costs, dropped to $275.5 million or 85 cents per share, down from $319.6 million or $1.02 per share recorded the previous year, the Washington-based firm announced today in a statement.
The financial results were below the $1.04 average projection worked out by 11 analysts in a survey commissioned by Bloomberg. Carlyle’s stocks hit the lowest point in three months.
Caryle has followed the path taken by peers Blackstone Group LP and KKR & Co. by expanding its portfolio beyond conventional leveraged buyouts into increased dedication of assets in real estate and credit investments.
The private-equity and funds-of-funds arms of the company recorded higher earnings for the first three months of 2014. The real estate venture recorded a decline, which Caryle attributes to losses in specific Latin American and European assets.
“There’s nothing yet that we can cite that is going to immediately be a turnaround that will reverse some of the problems we’ve had. I think we will see improvements in the not-too-distant future, but nothing immediately,” said David Rubenstein, the company’s co-chief executive officer.
Caryle’s stocks lost 5.4% to $32.35 as of 9:59 in New York. Earlier, the firm lost as much as 6%, the largest fall since the 27th of January. The shares dropped 4% in 2014 through yesterday, despite soaring 37% in 2013 when Carlyle and peers benefited from surging equity markets after selling stakes and paying back shareholders.
Valuewalk reports that Caryle said it managed assets worth $198.9 billion as of the end of the first quarter. It generated $5.5 billion in fresh capital within the period.
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