Cash or distributable earnings will be substantial this quarter based on realizations and fee related earnings. My guess is 60-70 cents, which will result in a dividend of around 50 cents. ENI may be negative based on negative marks on investments this quarter as the market was down a lot. But ENI can be all over the map and is less relevant in the short run. Still you may get some volatility around this in the near term. At the end of the day it's cash earnings that matter.
Fear that earnings will somehow dry up as a majority comes from incentive fees and the equity markets have corrected somewhat. Also worries about CG's energy investments. Way, way overblown fears frankly. In looking at what CG owns there are some great investments in now public companies with strong fundamentals (AXTA, COMM, FSL,BAH, COR) that have appreciated a lot during the past year and can easily be liquidated at large embedded gains. Lots of private investments that are big winners as well. More than a dozen funds are deep into carry and there are plenty of investments that could be sold today at very significant gains. Also, dry powder across the platform is very large--$46 bil in carry funds, $12 bil of which is in energy. The company's management presented at an industry conference this week and the story is clearly very compelling for anyone with a little patience. You can access the presentation on the company's website in the investor relations section.
Cash earnings, which is Distributable Earnings. DE is around $1 bil over the past 12 months. The stock trades at a ridiculous 6.5X that and pays a 10% dividend. Plus the business is growing with $20 bil of new funds raised every year and lots of realizations still to come from $60+ bil of investments in the ground. Accrued net carry is more than $1.5 bil, so there is good visibility on realizations translating into DE. $5 per share in DE means you are paying very little for the franchise and extremely little for future growth. The company has a 30 year history of very strong fund performance and investors in Carlyle funds are very happy campers who put more and more money in across multiple investment vehicles. The dry powder in energy related funds is more than $10 bil and this is a great time to start making energy investments on the cheap. The stock could double over the next 3 years plus you get 30% of the current market cap in dividends. Buy and hold, and ignore the senseless volatility.