Carlyle CEO Meets Targets, Faces Challenges in Growth and Returns
Carlyle Group Inc.'s CEO, Harvey Schwartz, has achieved the goals he set for 2024 in his second year, demonstrating progress in several key areas.
The company's fee-related earnings surged by over 28% to $1.1 billion, meeting its target. Annual profit margins improved from 37% to 46%, and Carlyle secured over $40 billion in inflows as aimed.
These successes stem from Schwartz's efforts to overhaul private equity groups and align compensation with shareholder returns. He has also expanded the team to target affluent clients and reduce costs.
However, shareholders remain eager to witness more substantial changes, as Carlyle's stock performance has lagged behind peers in recent years. Schwartz's challenges include diversifying revenue streams and enhancing returns in key strategies.
Despite the overall progress, Carlyle's fourth-quarter profit marginally missed estimates due to a decline in private equity earnings. Distributable earnings for the buyouts business fell for the third consecutive year.
Credit and investment solutions segments contributed to offsetting the decline, with distributable earnings increasing by 20.6% and 90%, respectively.
A bright spot was the record $164 million in transaction fees generated by Carlyle's capital markets arm, indicating Schwartz's ambition to expand revenue from this segment.