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Carlyle (CG) Discontinues PE Investments in US Consumer Brands
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Carlyle Group Inc. (CG - Free Report) is pulling back from investments in U.S. consumer brands, per a Bloomberg article. The move comes at the helm of the alternative asset manager's efforts to reorganize its US private equity business around core sectors such as financial services and technology.
The US consumer team has previously invested in brands, including Supreme and Beats Electronics.
With such investments no longer primary to its buyout strategy, CG is dismantling its US consumer, media and retail investing team, and has asked four dealmakers focused on those bets to leave, per people familiar with the matter.
Per the article that quoted a memo by Americas Corporate Private Equity co-heads Sandra Horbach and Brian Bernasek, the change was necessary to align CG’s platform and team for the future amid the increasingly challenging investment trends in the US consumer sector.
The decision will result in job changes or layoffs for almost a dozen staff, per people familiar with the matter. Some employees will shift to other teams, and others will join consumer, retail and media investments teams overseas as the firm will continue to make such investments in Europe and Asia.
With the exit, CG private equity business US strategy will focus on investments in health care, government services, industrials, technology and financial services.
Markedly, Carlyle’s has been witnessing solid organic growth over the past several years on the back of strategic investments. The company is focusing on scaling its investment platforms, building out infrastructure credit and real estate credit, and foraying into new avenues, such as insurance and capital markets. These efforts might support revenue growth in the future. Our model estimates total revenues to rise, seeing a compound annual growth rate (CAGR) of 2.6% over the next three years.
Also, the company’s global presence and efforts to expand business are likely to continue aiding AUM growth and boost its investment performance.
However, it has been witnessing a persistent rise in expenses over the past few years. Expenses witnessed a CAGR of 10% in the last four years (ended 2022). Higher compensation-related expenses induced this rise. Such escalating costs might weigh on its expense base to some extent in the upcoming quarters and hinder bottom-line growth. We project total expenses to witness a CAGR of 5.4% over the next three years.
Shares of CG have inched up 0.9% over the past six months against the industry’s decline of 21%.
Image Source: Zacks Investment Research
CG currently carries a Zacks Rank #2 (Buy).
Restructuring Efforts by Other Companies
Interactive Brokers Group (IBKR - Free Report) announced a strategic move that will further bolster its position as a global brokerage firm. IBKR consolidated its brokerage operations in the European Union (“EU”) by merging Interactive Brokers Central Europe ("IBCE") with Interactive Brokers Ireland ("IBIE").
The move is expected to yield substantial benefits as it aligns with Interactive Brokers' commitment to operational efficiency through automation.
Blackstone Inc. (BX - Free Report) integrated its corporate credit, asset-based finance and insurance groups into a single unit called the Blackstone Credit & Insurance (“BXCI”). BXCI is expected to accelerate growth by creating a more seamless experience for clients and borrowers.
The new unit will offer a one-stop solution across corporate and asset-based, as well as investment grade and non-investment grade, private credit. BX’s credit and insurance segment includes senior credit-focused funds, distressed debt funds, mezzanine funds and general credit-focused funds concentrated in the leveraged finance marketplace.
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Carlyle (CG) Discontinues PE Investments in US Consumer Brands
Carlyle Group Inc. (CG - Free Report) is pulling back from investments in U.S. consumer brands, per a Bloomberg article. The move comes at the helm of the alternative asset manager's efforts to reorganize its US private equity business around core sectors such as financial services and technology.
The US consumer team has previously invested in brands, including Supreme and Beats Electronics.
With such investments no longer primary to its buyout strategy, CG is dismantling its US consumer, media and retail investing team, and has asked four dealmakers focused on those bets to leave, per people familiar with the matter.
Per the article that quoted a memo by Americas Corporate Private Equity co-heads Sandra Horbach and Brian Bernasek, the change was necessary to align CG’s platform and team for the future amid the increasingly challenging investment trends in the US consumer sector.
The decision will result in job changes or layoffs for almost a dozen staff, per people familiar with the matter. Some employees will shift to other teams, and others will join consumer, retail and media investments teams overseas as the firm will continue to make such investments in Europe and Asia.
With the exit, CG private equity business US strategy will focus on investments in health care, government services, industrials, technology and financial services.
Markedly, Carlyle’s has been witnessing solid organic growth over the past several years on the back of strategic investments. The company is focusing on scaling its investment platforms, building out infrastructure credit and real estate credit, and foraying into new avenues, such as insurance and capital markets. These efforts might support revenue growth in the future. Our model estimates total revenues to rise, seeing a compound annual growth rate (CAGR) of 2.6% over the next three years.
Also, the company’s global presence and efforts to expand business are likely to continue aiding AUM growth and boost its investment performance.
However, it has been witnessing a persistent rise in expenses over the past few years. Expenses witnessed a CAGR of 10% in the last four years (ended 2022). Higher compensation-related expenses induced this rise. Such escalating costs might weigh on its expense base to some extent in the upcoming quarters and hinder bottom-line growth. We project total expenses to witness a CAGR of 5.4% over the next three years.
Shares of CG have inched up 0.9% over the past six months against the industry’s decline of 21%.
Image Source: Zacks Investment Research
CG currently carries a Zacks Rank #2 (Buy).
Restructuring Efforts by Other Companies
Interactive Brokers Group (IBKR - Free Report) announced a strategic move that will further bolster its position as a global brokerage firm. IBKR consolidated its brokerage operations in the European Union (“EU”) by merging Interactive Brokers Central Europe ("IBCE") with Interactive Brokers Ireland ("IBIE").
The move is expected to yield substantial benefits as it aligns with Interactive Brokers' commitment to operational efficiency through automation.
Blackstone Inc. (BX - Free Report) integrated its corporate credit, asset-based finance and insurance groups into a single unit called the Blackstone Credit & Insurance (“BXCI”). BXCI is expected to accelerate growth by creating a more seamless experience for clients and borrowers.
The new unit will offer a one-stop solution across corporate and asset-based, as well as investment grade and non-investment grade, private credit. BX’s credit and insurance segment includes senior credit-focused funds, distressed debt funds, mezzanine funds and general credit-focused funds concentrated in the leveraged finance marketplace.