The $3.8 (private equity) trillion industry is entering the later stages of a selling cycle that, since 2012, has earned its members the most profit ever. They’re now under pressure to put a record $1.2 trillion in new money to work -- $150 billion of which is parked at Blackstone, Carlyle, Apollo and KKR & Co. -- while supporting their energy holdings amid oil’s decline.
Oil’s 58 percent tumble since June has rippled through markets, erasing $15.1 billion from the portfolios of more than a dozen private equity firms, according to data compiled by Bloomberg on 28 publicly traded energy producers.
Carlyle Group LP is expected to lead the decline with a 73 percent drop, driven by its energy holdings, and Apollo Global Management LLC is expected to report a 63 percent drop in earnings. Blackstone Group LP, the most diversified of the buyout firms, should be least affected, with an estimated 32 percent slide.
How might Carlyle's historic 30% annual return on equity be impacted? It could simply become a marketing line for co-founders.