Record Quarterly FRE: Achieved a record quarterly Fee-Related Earnings (FRE) of $266 million, marking a nearly 40% increase over the first quarter of the previous year.
FRE Margin: Recorded a record FRE margin of 47%, up from 35% in Q1 2023, representing more than a 33% increase year-over-year.
Distributable Earnings (DE): Generated $431 million in DE or $1.01 in DE per share, the best quarterly DE result since 2022.
Assets Under Management (AUM): Finished the quarter with $425 billion of AUM, up 12% year-over-year.
Capital Raising: Raised $5.3 billion in capital during the quarter, in line with expectations.
Future Guidance
2024 Financial Targets: Firm is on track to achieve its 2024 financial targets, including targeting FRE of $1.1 billion, targeting FRE margins to increase to a range of 40% to 50%, and targeting inflows of $40 billion.
Management Fees: Anticipate management fees to start accelerating through the year due to strong fundraising activities in the previous quarters and pending fee-earning AUM activation.
Share Repurchases: An active approach towards share repurchases will continue, with $1.25 billion remaining in the authorization.
Dividend Policy: No immediate changes to the dividend policy are planned, maintaining flexibility in capital allocation.
Trends, Market Conditions, Sentiment
Investment Environment: Observing improvements in the macroeconomic environment with capital availability increasing, private credit, and loan spreads tightening, coupled with a stabilization of interest rates and inflation.
Investor Confidence: Enhanced investor confidence driven by improved market sentiment, promising a higher level of deal activity.
Fundraising and Deployment: Expecting a pickup in fundraising and deployment activities across all quarters of 2024, driven by strategic focus areas and product momentum in wealth management and credit strategies.
Market Position: Carlyle is well-positioned to capitalize on improving market conditions, holding high-quality assets poised for monetization and substantial dry powder for deployment.
Notable Quotes
”Our first quarter results reflect continued momentum across the firm,” indicating strong performance and optimism towards achieving the set targets for 2024.
”Capital from the banking system and private credit is more readily available,” highlighting the recovery and improved liquidity in the financial markets.
”We’re very pleased with the FRE for the quarter…up 40% over the same period last year,” underscoring the firm’s effective growth and operational efficiency.
”We’re active purchasers of the stock,” reflecting a proactive approach to capital management and shareholder value enhancement.
