Companies

Carlyle Restores Profit After First-Quarter Loss

The Tip Desk · August 5, 2026 · 4 min read

Distributable Earnings reached $472 million, or $1.07 a share after tax, the firm’s highest in nearly four years.

The Carlyle Group Inc. (CG) swung from a $179 million loss before income taxes in the first quarter to income before provision for income taxes of $274 million in the second quarter ended June 30, 2026, with a 24.4% margin.

Chief Executive Officer Harvey M. Schwartz called the period one of the firm’s strongest quarters in recent years, citing record Fee Related Earnings, its highest Distributable Earnings in nearly four years, strong fundraising, and exceptional realization activity.

Distributable Earnings were $472.3 million, or $1.07 a share after tax, compared with $431.0 million, or $0.91 a share, a year earlier. Fee Related Earnings were a record $357.7 million, up 11% from $323.3 million a year earlier. The FRE margin was 47%.

Net income attributable to common stockholders was $137.1 million, or $0.37 a share on a diluted basis, versus $319.7 million, or $0.87 a share, in the year-ago quarter. The effective tax rate was 17.9%.

Total revenues were $1,123.5 million, down from $1,572.9 million a year earlier, as investment income, including performance allocations, fell to $113.9 million from $694.0 million. Net performance revenues were a $48.9 million loss. Investment income in the quarter primarily reflected unrealized performance allocations in credit opportunities and aviation strategies in Global Credit, secondaries and portfolio finance in Carlyle AlpInvest, and international energy in Global Private Equity, partially offset by a reversal of unrealized performance allocations in the seventh U.S. buyout fund.

Fund management fees were $657.0 million. The increase versus a year earlier was driven by capital markets and transaction fees on several large Global Private Equity deals, partially offset by a $13 million drop in catch-up fund management fees to $11 million from $24 million; the year-ago quarter also included $19 million of catch-up subordinated aviation fees. Incentive fees were $98.9 million.

Realized Net Performance Revenues were $114.6 million, versus $87.7 million a year earlier, driven by the fourth Japan buyout fund realizing carry for the first time, the sixth U.S. buyout fund, and the second credit opportunities fund. Net Accrued Performance Revenues were $2.4 billion as of June 30, 2026, down 7% from the prior quarter, on carry realizations and lower net accrued carry in the seventh U.S. buyout fund, partly offset by appreciation in international energy funds.

Total assets under management were $485 billion at June 30, 2026, up 2% from the prior quarter and 4% year-over-year. Global Private Equity AUM rose 2% sequentially, Carlyle AlpInvest 4%, and Global Credit 1%. Fee-earning AUM was $334 billion. Pending fee-earning AUM rose to $28 billion from $21 billion in the prior quarter.

Inflows were $16.8 billion in the quarter, including $5 billion of commitments earmarked for the next vintage U.S. buyout fund, continued momentum in Carlyle AlpInvest secondaries and portfolio finance, the closing of three new-issue U.S. CLOs, and reinsurance activity in Global Credit. Deployment was $14.3 billion, led by U.S. liquid credit, direct lending, and opportunistic credit in Global Credit and purchases in U.S. buyout funds. Realized proceeds from carry funds were $6.7 billion. Schwartz said the firm distributed nearly $7 billion during the quarter and $37 billion over the past year.

Net investment income of Consolidated Funds included unrealized investment losses of approximately $47 million related to an investment in a consolidated infrastructure fund in Global Private Equity. Through June 30, 2026, the cumulative unrealized loss attributable to the company was approximately $222 million, which will be realized upon disposition of the fund’s investment, which it currently expects later in 2026.

The board declared a quarterly dividend of $0.35 a share, payable August 26, 2026, to holders of record on August 17. Carlyle repurchased or withheld 6.7 million shares totaling $304 million in the quarter, leaving $1.6 billion of capacity under a $2.0 billion authorization.

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