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Carlyle (CG) Reduces Pan-Asia PE Fund Goal on Macro Slowdown
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The Carlyle Group Inc. (CG - Free Report) has reduced its sixth pan-Asia private equity (PE) fund target by at least 30% from its original goal of $8.5 billion, per a Reuters article. The reason behind such reduction is most likely the slowdown in global economy, hovering recession fears and geopolitical concerns.
Sources familiar with the matter stated that CG has captured less than $3 billion since it started raising funds in mid-2022. Further, they noted that CG is now targeting to raise up to $6 billion and expects to close the fundraising in the third quarter of 2024.
Per Conference Board forecasts, economic growth in the U.S. is likely to be crippled by heighted inflation levels, high interest rates, geopolitical conflicts and greater consumer debt. Moreover, given the recession fears and rising inflation, consumer spending is likely to be adversely affected.
Hence, we believe these factors to have driven the trim in target.
A source familiar with the matter said that the fund is expected to allocate around 30-35% of its capital in the Indian economy which would be CG’s largest market in Asia. Further, 15-20% is likely to be allocated to China and South Korea each.
Moreover, it was earlier reported that CG was planning to pull back its investments in the U.S.-based consumer, media and retail companies. It would rather focus its attention on other key sectors like technology and financial services.
The impact of economic slowdown was seen in third-quarter results with assets under management declining 1% sequentially to $382.26 billion. Further, revenues declined 20.6% sequentially to $776.6 million.
CG’s shares have gained 6.7% in the year-to-date period compared with the industry’s 11.2% growth.
Image Source: Zacks Investment Research
CG presently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks from the finance space are Community Trust Bancorp, Inc. (CTBI - Free Report) and Interactive Brokers Group, Inc. (IBKR - Free Report) .
Community Trust currently sports a Zacks Rank #1 (Strong Buy). The company’s earnings estimates for 2023 have been revised 5% upward over the past 60 days. In the past six months, CTBI shares have gained 16%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for Interactive Brokers have been revised 1% upward for 2023 in the past 30 days. Shares of IBKR have increased 4.6% in the past six months. The company currently carries a Zacks Rank #2 (Buy).
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Carlyle (CG) Reduces Pan-Asia PE Fund Goal on Macro Slowdown
The Carlyle Group Inc. (CG - Free Report) has reduced its sixth pan-Asia private equity (PE) fund target by at least 30% from its original goal of $8.5 billion, per a Reuters article. The reason behind such reduction is most likely the slowdown in global economy, hovering recession fears and geopolitical concerns.
Sources familiar with the matter stated that CG has captured less than $3 billion since it started raising funds in mid-2022. Further, they noted that CG is now targeting to raise up to $6 billion and expects to close the fundraising in the third quarter of 2024.
Per Conference Board forecasts, economic growth in the U.S. is likely to be crippled by heighted inflation levels, high interest rates, geopolitical conflicts and greater consumer debt. Moreover, given the recession fears and rising inflation, consumer spending is likely to be adversely affected.
Hence, we believe these factors to have driven the trim in target.
A source familiar with the matter said that the fund is expected to allocate around 30-35% of its capital in the Indian economy which would be CG’s largest market in Asia. Further, 15-20% is likely to be allocated to China and South Korea each.
Moreover, it was earlier reported that CG was planning to pull back its investments in the U.S.-based consumer, media and retail companies. It would rather focus its attention on other key sectors like technology and financial services.
The impact of economic slowdown was seen in third-quarter results with assets under management declining 1% sequentially to $382.26 billion. Further, revenues declined 20.6% sequentially to $776.6 million.
CG’s shares have gained 6.7% in the year-to-date period compared with the industry’s 11.2% growth.
Image Source: Zacks Investment Research
CG presently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks from the finance space are Community Trust Bancorp, Inc. (CTBI - Free Report) and Interactive Brokers Group, Inc. (IBKR - Free Report) .
Community Trust currently sports a Zacks Rank #1 (Strong Buy). The company’s earnings estimates for 2023 have been revised 5% upward over the past 60 days. In the past six months, CTBI shares have gained 16%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for Interactive Brokers have been revised 1% upward for 2023 in the past 30 days. Shares of IBKR have increased 4.6% in the past six months. The company currently carries a Zacks Rank #2 (Buy).