Carlyle credit fund reports 30pc rise in originations in Q1
Carlyle Secured Lending reported a 30 per cent increase in originations during the first quarter of the year, as leveraged buyout activity ticked up.
The specialty finance company generated net investment income of $0.54 (£0.43) per share during the first quarter. This represents an annualized yield of almost 13 per cent.
As a result, the board has authorised a second quarter dividend of $0.47 per share.
Carlyle’s net asset value was $17.7 per share as of 31 March 2024. This is a rise of 0.5 per cent on the previous quarter.
Justin Plouffe, president, chief executive, and director of Carlyle Secured Lending, said that the reopening of the syndicated loan market and tighter terms drove overall refinancing activity and a rebalancing of private and public credit markets during the first three months of the year.
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“Leveraged buyout activity has picked up in 2024,” he added. “And the broader M&A market is expected to become more active in the second half of the year, which we expect to result in an uptick in origination volume.”
Carlyle has seen pricing pressure increase, particularly in the US upper middle market. However, Plouffe said that the company’s core middle market continues to be comparatively less volatile.
“Our pipeline continues to expand with both regular way and differentiated deal flow,” said Plouffe.
“We remain focused on our core middle market strategy and benefit from the differentiation provided by our access to the ONE Carlyle platform while maintaining our ability to be dynamic in response to market changes, while increasing origination activity is a positive for our strategy, we are most focused on the overall credit performance of our existing portfolio.”
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Carlyle’s portfolio comprises of 174 investments in 131 companies across more than 25 industries. The average exposure in any single portfolio companies is less than one per cent, and 95 per cent of Carlyle’s investments are in senior secured loans.
Its aim is on making senior secured floating rate investments to US companies backed by high-quality sponsors, primarily in the core middle market.
Plouffe said that market demand for private credit remains high, and the company continues to focus on sourcing transactions with significant equity cushions, attractive leverage levels, strong documentation and attractive spreads relative to the market and historical originations “through our disciplined underwriting, prudent portfolio construction and conservative approach to risk management with attractive new originations of stable portfolio and reduced non-accruals.”
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