Carlyle Group: Compelling Valuation, Strong Fundraising Will Fuel Future Growth

Investment Thesis - Buy Carlyle Group (CG), earnings & dividend growth will drive stock up to $29 over the next 12 months - a 28% increase from current price of $22.80

Business Overview

Carlyle is a top tier U.S based private equity firm. They have $170B in assets under management - $54B in Corporate Private Equity, $39B in Real Assets (Real Estate & Natural Resources), $31B in Global Market Strategies, and $46B in Investment Solutions. Carlyle has 4 main categories of revenue- management fees, performance fees, investment income and other income. Management fees are recurring advisory fees (typically 1% to 2%) that are earned based on the total amount invested in its funds. Performance fees are earned based on the returns in its funds - typically 20% of gains once returns are over the 8% hurdle. Carlyle earns investment income when it invests in its own funds. The two main sources of revenue - management and performance fees account for 86% of total revenue.


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