BX Blackstone Inc

Carlyle Group LP's second-quarter profit declined as its buyout funds' growth slowed and its hedge fund arm again weighed on performance.

The Washington, D.C., private-equity firm on Wednesday reported a profit of $6.1 million, or seven cents a share, down from $30.6 million, or 34 cents a share, in the year-earlier period.

Carlyle's economic net income, a measure of profit includes unrealized gains in the firm's portfolio, was $115.1 million, or 35 cents a share, down from $180 million, or 55 cents a share, a year earlier. Analysts had forecast 31 cents a share, on average, according to a Thomson Reuters poll.

A stock-market selloff in the wake of the U.K.'s vote to leave the European Union slowed the appreciation of private-equity firms' holdings in the second quarter. Since then, stocks have recovered since and interest rates remain at historic lows. The rich valuation environment has led market participants to question whether private-equity firms can find acquisitions at attractive prices.

Carlyle's private-equity portfolio appreciated 4% during the period, less than its 5% gain in the year-earlier period. That compared with a 4.5% rise in KKR & Co.'s funds and Blackstone Group LP's 2.5% advance in its private-equity holdings.

In Carlyle's global market strategies business, which includes alternative assets like hedge funds, holdings fell 2%, weighed down by energy debt. Carlyle's hedge-fund business has had a disappointing stretch, marked by outflows and poor performance at funds such as Claren Road Asset Management LLC. In May, Mitch Petrick, longtime head of the unit, stepped down.

Carlyle's distributable earnings, a measure of cash profits available for payouts to shareholders, were $288 million, or 84 cents a share, down from $386 million, or $1.18 a share, a year earlier. Carlyle said it would pay a 63-cent dividend, versus 89 cents a year earlier.

The firm's assets under management fell to $175.6 billion from $192.8 billion a year earlier and $178.1 billion at the end of the period quarter.

Carlyle's shares closed at $17.26 Tuesday, and were up 11% year-to-date.

Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com

(END) Dow Jones Newswires

July 27, 2016 07:35 ET (11:35 GMT)

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