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What’s Expected for Carlyle’s Global Credit Platform

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Assets under management

In Q1 2018, The Carlyle Group’s (CG) global credit AUM (assets under management) rose 15% YoY (year-over-year) to $33.8 billion due to foreign exchange translation and fundraising offset by realizations. The segment’s fund management fees rose 22% YoY to $59 million thanks to the segment’s fee-generating AUM. Its fundraising rose YoY to $0.8 billion from $0.4 billion.

Meanwhile, competitor (XLF) Apollo Global Management’s (APO) credit division saw inflows of $3.3 billion, and Blackstone’s (BX) credit division and KKR’s (KKR) public markets division had total AUM of $140 billion and $74.1 billion, respectively.

 

What could affect Carlyle’s credit division?

In the second quarter, Carlyle’s credit division is expected to be impacted by the Fed’s decision to raise rates four times this year. As short-term interest rates rise, the value of alternatives asset managers’ credit holdings may fall, impacting their carry funds.

In the second quarter, Carlyle’s credit division’s fundraising is expected to fall sequentially because of rate hike expectations restricting credit market investments. Lower fundraising could impact the division’s total AUM and revenue.

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