Becker Business Podcast
Host: Scott Becker
Episode: Carlyle Group & Private Equity Strikes Out
Date: November 1, 2025

Episode Overview

In this episode, Scott Becker analyzes the latest challenges facing Carlyle Group, a major player in the private equity sector. He breaks down the firm's recent financial performance, explores the broader difficulties encountered by private equity funds, and discusses the implications for the industry. The focus is on how respected firms like Carlyle are struggling with revenues, fee income, and lack of exits despite growth in assets under management.

Key Discussion Points and Insights

1. Carlyle Group’s Reputation and Current Standing

• Carlyle Group is one of the most highly regarded private equity funds.
  • "Carlyle Group is one of the best regarded of the private equity funds." (00:13)
• "It's been one of the few funds that's been up year to date in the private equity business..." (00:17)

2. Unique Position in a Challenging Sector

• Private equity funds overall are struggling, while public company stocks have been performing well.
  • "The private equity business is famously struggling from...public company stocks doing well and...private equity funds not getting exits with their sponsored companies and more so seeing lots of challenges there." (00:19)

3. Recent Financial Performance and Setbacks

• Carlyle’s positive streak reversed, with the stock down 5-6% on the day.
• Despite asset growth, revenues and fee income sharply missed expectations.
  • "Their assets under management have risen. They're up to 474 billion...But even with that, revenues missed by 20% and were down significantly year over year." (00:35)
  • "This is not something you're seeing a lot of, their fee income also missed estimates." (00:45)

4. The Double Hit: Fees and Exits

• Most funds have been struggling primarily with exits, but Carlyle missed targets for both fee income and exits.
  • "Typically when you're seeing what's been known to private equity funds is they've been doing okay in fees, not well in exits. Here they missed on fees and exits and revenues. And so the stock is down 5%." (00:48)

5. Possible Explanations for Fee Income Decline

• Scott identifies two major factors:
  • Carlyle may be offering more discounts to attract or retain investor funds, resulting in lower fees.
  • Carlyle may not be deploying enough capital, reducing the management fees it earns.
    • "Either they're giving more discounts to raise funds so they're not getting their full fee...or second, that essentially they're not deploying enough capital and thus they're not getting enough management fees." (01:01)

6. Broader Industry Implications

• The struggles at Carlyle reflect larger, systemic issues for private equity as an asset class.
  • "...a challenging report on earnings for Carlyle Group is intemic to a lot of the private equity business as well." (01:14)

Notable Quotes and Memorable Moments

• On Carlyle’s standing:
  "Carlyle Group is one of the best regarded of the private equity funds." (00:13)

• On the unique pressure facing private equity:
  "The private equity business is famously struggling from...public company stocks doing well and...private equity funds not getting exits..." (00:19)

• On the concerning trend:
  "Here they missed on fees and exits and revenues." (00:48)

• On possible underlying causes:
  "Either they're giving more discounts to raise funds...or essentially they're not deploying enough capital..." (01:01)

Important Timestamps

• 00:13: Carlyle's reputation and recent positive performance
• 00:19: Broader PE sector context
• 00:35: Assets under management up, but revenues down
• 00:45-00:48: Fee income and exits both miss expectations
• 01:01: Scott explains potential reasons for fee income drop
• 01:14: Impact on private equity industry as a whole

Tone and Language

Scott Becker maintains a measured, analytical tone throughout, combining respect for Carlyle’s historical strengths with clear-eyed commentary on the headwinds now facing both the firm and the broader private equity industry.

Summary

This episode offers a concise, insightful look at Carlyle Group’s unexpected financial setbacks amidst an increasingly tough environment for private equity. Scott Becker lays out the facts, explores why this moment matters, and underscores the ripple effects for the whole industry—making this a must-listen segment for anyone tracking the business of private investing.