Carlyle profits rise to $520m

Carlyle Group, the world’s second-largest manager of investment alternatives to stocks and bonds, said fourth-quarter profit more than tripled as the value of its fund holdings increased and the firm sold assets at a profit.

Economic net income after taxes, a measure of profit excluding some costs, increased to $520m (€378m), or $1.64 a share, from $145.6m, or 47 cents a share, reported a year ago, Washington-based Carlyle said yesterday in a statement. The shares rose after results beat the 93-cents average estimate of 14 analysts in a Bloomberg survey.

Carlyle, like peers Blackstone and KKR & Co., has diversified its business beyond traditional leveraged buyouts to bolster assets dedicated to real estate and credit investments, reducing reliance on volatile LBO earnings. Carlyle sold shares during the quarter in railway operator Genesee & Wyoming, French cable operator Numericable, ratings company Nielsen and Italian skiwear maker Moncler, among others, according to Credit Suisse Group.

The year “was yet another good year to exit,” Bill Conway, Carlyle’s co-founder and chief investment officer, said on a conference call with investors and analysts. At the same time, “it was a challenging year to invest, particularly in the US. This was the flip side of robust public markets and low interest rates,” Conway said.

The firm’s private-equity portfolio rose 9% in the fourth quarter, compared with 12% at Blackstone, 9% at Apollo Global Management and 8.4% at KKR.

Together, all of Carlyle’s funds from which it can collect a slice of profits appreciated 6% in the quarter and 20% in 2013.