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Carlyle’s Real Estate Division in 2H17

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Carlyle’s decline in fee-related earnings

Carlyle Group’s (CG) Real Estate division saw a YoY (year-over-year) decline in its FRE (fee-related earnings) in 2Q17. In 2Q17, the division’s FRE stood at -$11 million, while in 2Q16, the division’s FRE stood at $15 million—a decline primarily due to fundraising costs and a fall in fee revenues. According to CG’s management, the division should see significant fundraising in 2H17.

This division also saw a serious decline in its ENI (economic net income) and stood at $51 million in 2Q17, compared with $79 million in 2Q16, mainly due to a YoY decline in FRE and net performance fees in 2Q17. The division’s fee-generating assets under management in 2Q17 reached $26.2 billion, compared with $30.4 billion in 2Q16.

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Return on equity

Carlyle’s return on equity stood at 1.55% in 2Q17, compared with the following returns on equity of peer alternative asset managers (XLF):

  • Apollo Global Management (APO): ~52.3%
  • Blackstone (BX): ~16.3%
  • KKR & Company (KKR): ~5.4%
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