Anyone with a more literate background in equities and PE valuations have any opinions on Carlyle's outlook? They released a disappointing 1Q23 earnings after the new CEO prepped investors with a message citing the challenging environment. How would you think about their positioning relative to other mega-funds like KKR, Apollo, etc.?
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IMO weakest of the public alts.
Blackstone - 1 trillion AUM, strong ecosystem, strong RE, infrastructure, and other funds driving growth, arguably strongest brand for LPs, Jon Grey at helm
Apollo - 600bn AUM, more vertically integrated run the rest (Athene), wealth management/distribution, strong credit platform, value oriented niche that most of the large MFs/UMM do not compete in; Marc Rowan
KKR - strong brand, Global Atlantic, strong leadership seemingly
Carlyle - leadership turmoil, strong legacy focus in gov / A&D but why relevant today? Where’s Carlyle headed? A bit unuclear at least to the casual alt observer
put another way - if I were an LP and I had $100 million, I know why’d I want to put some into BX, APO, KKR - but someone would need to tell me why Carlyle
Thoughts on TPG?
TPG was the original Carlyle in the sense that it had a fall from grace ~10 years ago and was an original struggling megafund. I would say the name has since lost its cachet but is still hanging on. They had a solid sub-franchise in TPG Rise but...look where that went.
I wouldn't write Carlyle off though. I think they'll be fine. Shitty but they'll stick around for some time.
Think you’re confusing LPs and equity investors
why would an LP care if you have strong retail distribution or a captive insurer. All they care about really is the performance of your funds
Because the ultimate concern here is the health of each of these funds going forward. A vertically integrated fund w/ balance sheet capital and distribution and ability to raise funds through HNW or the retail channel can become less and less dependent on LPs going forward. LPs have allocation issues? That sucks. Oh look - my captive insurance arm originated $10bn this year that I can give to my AM arm to deploy. At the extreme you get Berkshire Hathaway.
Two new co-heads of PE there seem to be veterans as an LP regardless of the head of PE’s resignation the lieutenants look strong and historical performance has been on par.
Carlyle’s recent fund performance has been very mediocre tbh
Been flailing for a while and their fundraising shows it. Think the legacy brand will help them skirt by, but absolutely in a rebuilding period and doubt they will rise to the top of the MF universe in the short term. Calling out that their flagship funds are going to have smaller raises is not a sign of a successful franchise.
It's all about fundraising. BX doesn't even care if they hit major carry as they raise hundreds of billions (producing billions upon billions of mgmt fees) every year. There's a reason most of these stocks have sucked the past 12 months and outlooks continue to deteriorate. Their fundraising is slowly drying up and the wealth management channel being a last resort for them shows they're looking for the dumbest money for fundraising and creating less optimal (for LPs) vehicles that end up like BREIT longer term.
Amen to the above. LPs have been dumbly piling money into the namebrands for years now in the recent boom era of fundraising. Can't fault them though. If you're a CIO of a public pension overseeing ~$80bn being paid $180k a year, you can be fired for backing the latest Hot Trend Fund III but would never be fired for backing KKR Fund XIV or Blackstone XII. I just feel bad for all the pensioners whose money has gone to the shitter. It's going to be a knife fight out there in the fundraising world going forward and most of these GPs (megafund or first-time fund) still have 0 grasp of this. Going to be an absolutely brutal market.
CIOs of ~$80bn public pensions are making $180k a year?
Thoughts on Carlyle vs Bain Capital?
Takeover candidate for a large asset manager IMO. I think Blackrock made a run at them at the end of ‘22, but pulled out after a deeper dive.
I don't think Harvey Schwartz comes out of retirement just to patch together for a sale... he's turned down many top jobs including CEO of WF. IMO he is there to rebuild Carlyle into a premier MF
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