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SummaryCompaniesExecutives say more deals likely to close in Q4Fee-related earnings rise, dealmaking proceeds fallCiti analysts call quarter 'mixed;' shares fallAlpInvest unit sees 22% growth in assets under management NEW YORK, Oct 31 (Reuters) - Investment manager Carlyle Group (CG.O), opens new tab forecast on Friday a pickup in dealmaking into the end of the year after lower earnings at its private equity business in the third quarter offset growth in other areas. CEO Harvey Schwartz said he expected the group to beat its financial targets for the full year, but shares fell 7% after Carlyle reported July-September performance that Citi analysts described as "mixed." Advertisement · Scroll to continueReport Ad The company reported rising fee-related earnings and inflows of $17 billion, supported by Carlyle AlpInvest, which buys and sells second-hand stakes in private equity funds and portfolios, and its global credit business. ASSETS UNDER MANAGEMENT EDGE HIGHER Inflows rose from $13.4 billion in the second quarter, leaving total assets under management at $474 billion, up 2% from the previous quarter. Fee-related earnings, which are generally stable during market volatility, climbed to $312 million, just above analysts' average estimate of $311 million, according to data compiled by LSEG. But revenue from selling or refinancing assets came in lower than that recorded during the same period last year, which weighed on the company's distributable earnings, or profit that can be returned to shareholders. Advertisement · Scroll to continue Get the key points from this story with Reuters AI That metric hit $368 million, or 96 cents per share, undershooting an average analyst forecast of $1.01. Citi analysts said in a note that management fees and performance fees were lower as private equity "saw a bit of an air pocket" in the period. Carlyle has $4 billion worth of deals signed that are pending close, Chief Financial Officer John Redett said, adding this does not include the hotly anticipated listing of medical supplies maker Medline, which Reuters has reported could value the company at $50 billion. "It's hard to control when deals close," Redett told analysts on a conference call. He said the firm had closed on $1 billion worth of transactions since the end of the third quarter, including the sale of British funds network and data business Calastone. "I can't say all this $4 billion of pipeline will close in the fourth quarter, but it's a big number," Redett said. Ad Break Coming Up NEXT StayNext OffEnglish 180p288p360p480p540p576p720pHD1080pHDAuto (180p) About ConnatixV2131534911 About ConnatixV2131534911 Continue watchingafter the adVisit Advertiser websiteGO TO PAGE Schwartz said the company should exceed its current targets for 10% growth in fee-related earnings and inflows of $50 billion for the full year, highlighting growth in its insurance business, AlpInvest, and higher inflows from wealthy individuals. ALTERNATIVE INVESTMENTS Schwartz has been working on a turnaround after the company faced a few difficult years linked to an industry-wide downturn and an internal succession struggle. Counting Friday's drop, Carlyle's shares have gained 4% this year. Peers Blackstone (BX.N), opens new tab, KKR (KKR.N), opens new tab and Apollo (APO.N), opens new tab, which are much larger firms, have all seen double-digit percentage declines in their share prices. Higher interest rates in the last few years have hampered private equity firms' ability to maintain their model of buying companies, working on them to increase their value, and selling them at a profit. Deal activity has picked up globally in recent months. Many firms weathered the difficult deal environment through their expansion into other alternative investments - such as real estate, hedge funds and private credit. AlpInvest's assets under management rose 22% in the quarter. The company said in September that the unit had raised $20 billion to buy second-hand private equity stakes. Reporting by Isla Binnie in New York and Arasu Kannagi Basil in Bengaluru; Editing by Shinjini Ganguli, Susan Fenton, Rod Nickel Purchase Licensing Rights Isla BinnieThomson ReutersIsla Binnie reports on how company directors and executives manage stakeholder and shareholder interests, with a focus on compensation, corporate crises, dealmaking and succession. She also covers how politics, regulation, environmental issues and the broader economy affect boardroom discussions. Isla previously covered business, politics and general news in Spain and Italy. She trained with Reuters in London and covered emerging markets debt for the International Financing Review (IFR).EmailXLinkedinArasu Kannagi BasilThomson ReutersBasil writes stories across the U.S. finance file including banks, asset managers, payment firms, insurers, and exchange operators. He also covers initial public offerings on U.S. exchanges and venture capital funding.EmailLinkedin
