Carlyle Q2 2026: Net Income Plunges 57% on CP VII Write-Downs, but Fee-Related Earnings Hit Record
CG sits 21% above its 52-week low of $39.6 on light trading volume (0.4× avg).
Summary
Carlyle's Q2 2026 GAAP net income dropped 57% to $137M due to CP VII performance allocation reversals, but Fee Related Earnings hit a record $358M, up 11%, driven by strong transaction fees and AUM growth.
Key Events · Earnings and Guidance · CG
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GAAP Net Income Plunges on CP VII Reversals
Net income attributable to Carlyle Group Inc. fell 57% YoY to $137.1M in Q2 2026 ($0.38 EPS), as performance allocations swung from a $639M gain to a $45M gain, driven by $265M in CP VII reversals due to public market declines.
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Fee Related Earnings Hit Record $358M
Fee Related Earnings rose 11% YoY to $357.7M, fueled by a 144% jump in incentive fees to $99M and a 6% increase in fund management fees to $657M, including $108.5M in transaction and advisory fees.
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Distributable Earnings of $472M, Up 10%
Distributable Earnings reached $472.3M, up from $431.0M a year ago, as realized performance revenues and fee growth offset higher compensation costs.
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AUM Grows to $485B; $16.8B Inflows in Q2
Total assets under management rose to $485.5B, with $16.8B in inflows during the quarter, including $5B raised for a structured vehicle earmarked for the next U.S. buyout fund.
Analysis · CG · Finance
Carlyle's Q2 2026 results reveal a sharp divergence between GAAP net income and the firm's preferred non-GAAP metrics. Net income attributable to Carlyle Group Inc. fell 57% year-over-year to $137.1 million, dragged down by a $594 million swing in performance allocations — largely a reversal of previously accrued carry on flagship fund CP VII as public holdings declined. However, the underlying fee-generating engine strengthened: Fee Related Earnings rose 11% to a record $358 million, driven by a surge in transaction and advisory fees (including $49 million from a structured vehicle for the next U.S. buyout fund) and growth in perpetual capital products. Distributable Earnings of $472 million also beat the prior year. The quarter underscores the lumpy nature of carried interest accounting while demonstrating momentum in management fees and capital deployment. With $1.6 billion remaining on the buyback authorization and a steady $0.35 quarterly dividend, management is signaling confidence in the fee-based earnings power despite mark-to-market volatility in the private equity portfolio.
At the time of this filing, CG was trading at $47.75 on NASDAQ in the Finance sector, with a market capitalization of approximately $17.2B. The 52-week trading range was $39.60 to $69.85. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.