KKR and Carlyle are two of the largest private equity firms in the world, but they are currently on diverging paths. KKR reported a boost in fundraising, with intentions to launch new corporate buyout funds in the US and Asia, while also expanding its investments in infrastructure and property. On the other hand, Carlyle had to cut expenses, including layoffs, in order to mitigate the impact of underwhelming fundraising results and a prolonging slump in financial markets. Carlyle also reported a decline in fundraising for its funds and closed its most recent flagship buyout fund with 20% less assets.
The diverging fortunes of KKR and Carlyle mainly stem from internal turmoil at Carlyle following the departure of its previous chief executives and co-founders. Compared to KKR, which has had no internal turmoil and has established a clear succession plan. Carlyle’s new CEO, Harvey Schwartz, has been working on a turnaround plan, particularly emphasizing cost-cutting to increase investments in areas where the company sees future growth potential. While Carlyle’s earnings beat analysts’ expectations, Schwartz remains focused on growing the company’s credit and insurance-related investment assets, debt and equity underwriting operations, and funds designed for wealthy individuals. Ultimately, Carlyle remains optimistic that its fundraising efforts will improve, especially as it targets buyouts in Japan and real estate in the coming quarters.
Despite their diverging fortunes, both KKR and Carlyle remain focused on their long-term growth goals and are working to adapt to the challenging financial market conditions by making necessary adjustments to their operations in order to keep moving forward.
Overall, KKR and Carlyle are trying to make the most out of a challenging environment, with KKR seeing an uptick in fundraising and expanding its investment operations, while Carlyle is navigating the impact of underperformance in fundraising and a tough market backdrop by cutting expenses and focusing on areas with more promising investment opportunities. They are both focused on maintaining their long-term growth goals in the face of ongoing market challenges.
