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Private equity group Carlyle provided the expected first quarter results, and the US acquisition pioneer has returned to growth after three years of struggle due to bangled succession and industry-wide slowdown.
Carlisle’s quarterly fee-based profit rose 17% in the first quarter compared to the previous year, but is better than analysts had expected. The group raised $14 billion in new capital in the quarter, raising $50 billion over the past 12 months, pushing overall assets to a record $453 billion.
“They’re the ones who are nominated for Carlisle’s CEO in 2023 after a long career at Goldman Sachs,” said Harvey Schwartz, who was named Carlisle’s CEO in 2023. “When we look at the strategic initiatives we have set about growth in price targets and expanding margins, it’s all in the goal.”
The profits of the second-hand private equity fund stakes of the New York and Washington-based group Carlisle Alpin Best Unit have almost doubled, making it the fastest growing in Carlisle.
Carlisle’s profits are also supported by private equity units, selling $5 billion in revenue from investments, including stocks in aviation group Standard Aero and IT services specialist Hexaware Technologies.
But Schwartz said Carlisle traders are increasing expectations of their returns as the Trump administration’s trade war clouds economic outlook.
“We want to be properly rewarded for the risks we are taking, and we expect activity levels to generally be slower across the industry,” Schwartz said. “It’s not that it’s green or red light, it’s a yellower light.”
Schwartz predicted that Federal Reserve Chairman Jay Powell could quickly cut interest rates if the US Central Bank saw cooling inflation data towards a 2% target rate.
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“If this Fed needs to cut, this is the Federal Reserve system that has demonstrated for a very long time that they can cut and that they can cut very quickly.
Historically, one of Wall Street’s most politically connected groups with deep ties to offices in Washington, Carlisle hired Powell, a partner that previously focused on corporate acquisitions until 2005.
He said U.S. Treasury Secretary Scott Bescent is growing optimistically as he is moving forward with trade deals after establishing a meeting in Switzerland later this week to begin meetings with senior Chinese officials.
“This is an unsustainable position between the two countries,” Schwartz said. “We cannot be in a trade war without the two biggest economies in the world having a broad impact on the entire world economy over the long term.”
