Firm also announces deal with AIG to take 19.9% stake in reinsurance unit
Carlyle Group's assets under management totaled $209.7 billion as of June 30, increasing 4.1% from March 31 and up 23.5% from 12 months earlier, the alternative investment firm said Wednesday.
Carlyle attributed the increase in the year to a combination of $51.8 billion in fundraising and $16.7 billion in market appreciation, which were offset, in part, by $29 billion in realized proceeds to fund investors.
Carlyle's private equity AUM was a record $81.2 billion as of June 30, up 8.3% from March 31 and an increase of 49.5% compared to June 30, 2017. Carlyle's AUM for investment solutions — composed of customized portfolios and its co-investment/secondaries subsidiaries for private equity and real estate — was $47.6 billion, a 2.3% decline from three months earlier but a 4.2% increase from the end of the year-earlier quarter. Real assets AUM totaled $45.4 billion, up 3.2% from the end of the previous quarter and up 16.7% from June 30, 2017. Global credit strategies had $35.5 billion in AUM, increasing 5% from March 31 and 14.9% from the end of the year-ago quarter.
GAAP net income was $63.5 million in the second quarter, up from $33.8 million in the first quarter and up from $57.6 million in the year-earlier quarter.
Carlyle earned fund management fees of $301.3 million, up 13.9% from $264.5 million in the first quarter and up 26.2% from $238.8 million in the second quarter of 2017. Incentive fees were $7.4 million, up 17.5% from $6.3 million in the prior quarter but down 33.3% from $11.1 million in the year-earlier quarter. Investment income was $503.3 million in the quarter, up 39% from $362.2 million in the first quarter but down 14.9% from $591.5 million in the fourth quarter of 2017.
Also on Wednesday, Carlyle and American International Group announced Carlyle will acquire a 19.9% interest in DSA Reinsurance, which currently reinsures $36 billion of AIG's legacy life and annuity and general insurance liabilities. At the same time, DSA Re and AIG agreed to allocate a combined $6 billion to various Carlyle-managed strategies across private equity, real assets and private credit.
"We are excited about our new partnership with AIG and DSA Reinsurance, where our 19.9% investment stake will drive new investment mandates across our firm," said Carlyle co-CEOs Kewsong Lee and Glenn Youngkin in a statement.