Carlyle\'s Profit Falls in 4th Quarter as Growth Slows

The Carlyle Group said on Thursday that its profit for the fourth quarter fell 28 percent from a year ago, as the growth of its portfolio companies slowed.

In the fourth quarter, Carlyle reported $182 million in profit, expressed as economic net income, compared to $254 million from the same time a year ago. That amounts to 47 cents per unit. Analysts on average had expected about 66 cents per unit, according to a survey by Capital IQ.

And Carlyle’s distributable earnings â€" a metric that the firm prefers because it tracks actual payouts to the investment shop’s limited partners â€" fell 24 percent from the year-ago period, to $188 million. Using generally accepted accounting principles, Carlyle earned $12 million in net income.

The results fall short of what rivals like the Blackstone Group and Kohlberg Kravis Roberts have reported for the fourth quarter. Private equity firms in general have gained from improvements in the markets, which have lifted the valuations of their portfolios and bolstered their core business of buying and selling companies.

Carlyles attributed its fall in economic net income to a smaller appreciation in the value of its portfolio. It reported a 4 percent gain for the quarter, compared to 7 percent for the same time a year ago.

The decision to not begin reaping carried interest from! its latest mainstay fund, Carlyle Partners V, weighed on distributable earnings. The company opted to hold off, given the relative freshness of the fund and the influx of new investments like the buyouts of the TCW Group and Getty Images.

Carlyle highlighted its strong fund-raising and gains from selling off investments. The firm raised $4.6 billion in new funds for the quarter and $14 billion for the year, compared to a total of $6.6 billion raised in all of 2011. And the firm generated $6.8 billion in realized proceeds for the quarter and $18.7 billion for the year, compared to $17.6 billion for the prior year.

“We had another excellent year,” David M. Rubenstein, one of Carlyle’s co-chief executives, said in a statement. “Our performance over the past two years was marked by steady, continuous progress across our business.”