Carlyle reports $34 million in profit for first quarter

The Carlyle Group reported a $34 million first-quarter profit Thursday, driven by the sale of several investments, even as the company said it spent more on fundraising.

The Washington-based financial asset giant did not provide its profit for the same period last year, when it was still a privately held company.

Carlyle also said it would continue to return money to shareholders and declared an 16-cent first-quarter dividend on its shares that is payable May 31.

Economic net income, which is the industry’s preferred economic metric, was $394 million, a tiny increase from the same period last year. That figure includes the increased value of companies Carlyle has taken over but not sold.

“It’s a good start to 2013, highlighted by continued strong fundraising and investment performance,” said Credit Suisse managing director Howard Chen, who rates Carlyle shares to “outperform.”

Carlyle’s trademark fundraising prowess continues to proceed apace. Its assets under management reached $176 billion during the first quarter, up $17 billion from this time last year.

Its recent fundraising plan includes a new retail strategy of courting individuals to invest in Carlyle funds in increments of $50,000. The previous threshold to buying into a Carlyle fund started around $5 million.

Carlyle’s business model is built on using its own money, its investors’ money and borrowed money to buy distressed or underperforming companies. The model is to improve those companies and sell them at a profit — as it did with Hertz last week after seven years revamping the rental car giant.

Co-chief executive David M. Rubenstein, who leads Carlyle’s fundraising, said the results, including $4.9 billion in new capital raised from its limited partners, which encompasses pension funds, institutions and high net-worth individuals, show the “Carlyle engine” is healthy.

“We continue to invest in Carlyle’s growing operational capabilities, notably the build-out of our international energy team, the launch of our new business development corporation and an expanded retail strategy,” Rubenstein said in a statement accompanying the results.

Carlyle’s stock fell about 3 percent early Thursday afternoon.

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade.
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