The Carlyle Group Inc. (NASDAQ:CG) shares are trading lower on Thursday despite the company beating third-quarter earnings and revenue estimates.
Adjusted EPS came in at $1.12, beating analyst estimates of $1.00. Revenue reached $994.5 million, exceeding the $946.49 million consensus estimate.
Inflows reached $10.8 billion, driven primarily by credit.
Carlyle’s portfolio companies recorded annualized revenue growth of 6% and double-digit EBITDA growth.
The company ended the quarter with more than $7 billion in balance-sheet assets, equivalent to almost $20 per share. It declared a quarterly dividend of 35 cents per share and repurchased or withheld 4.5 million shares during the quarter.
Financial Performance
Fee-related earnings (FRE) totaled $293 million, with a 47% margin, while year-to-date FRE reached a record $950 million. Management expects full-year FRE to reach its highest level in the firm’s history.
Fund management fees totaled $547 million in the quarter, with management expecting meaningful growth in 2027.
Net realized performance revenue increased fivefold to approximately $100 million in the third quarter. Net accrued performance revenue stood at $2.1 billion, representing more than $6 per share in potential future earnings.
Fundraising And Assets Under Management
Carlyle raised $11 billion in the third quarter, primarily driven by credit. Total assets under management (AUM) reached $479 billion, while pending fee-earning AUM increased nearly 50% year over year to $28 billion.
Management expects at least $20 billion in fourth-quarter inflows, potentially taking full-year 2026 fundraising to approximately $60 billion, more than 10% above 2025.
Segment Performance
Global Private Equity: The segment generated $237 million in third-quarter distributable earnings, up more than 60% year over year, and $131 million in fee-related earnings. Fee-earning AUM stood at $96 billion.
Realized proceeds totaled $5.7 billion, with notable exits including Rigaku, Camino Natural Resources and Tescan Group. Deployment approached $4 billion, including the first investment from the Defense and Industrials platform.
Global Credit: Third-quarter fee-related earnings increased 11% to $93 million, supported by 10% growth in management fees. AUM reached $207 billion, with $7 billion in quarterly inflows.
Opportunistic credit deployment totaled $5 billion. Carlyle also announced a $7.7 billion asset-backed finance transaction with Truist Financial Corp..
Management Outlook
CEO Harvey Schwartz said full-year FRE growth may fall a little short of the previously discussed mid-single-digit range, adding that the result could land "1 or 2%" on either side of it.
Looking ahead to 2027, growth is expected to benefit from stronger fundraising, fee activation and realizations, supported by a healthy exit pipeline and continued expansion of the global wealth channel.
Carlyle expects its multi-year fundraising supercycle to drive accelerating growth over the coming years.
CG Stock Price Activity: Carlyle Group shares are trading lower by 6.77% at $39.85 at the time of publication on Thursday, according to Benzinga Pro data.
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