Carlyle Group LP, the second-largest U.S. private-equity company, tumbled the most since going public in May after reporting fourth-quarter profit that fell short of analysts’ estimates.

Economic net income, a measure of profit excluding some costs tied to the firm’s initial public offering, declined 28 percent to $182.2 million from $254.2 million a year earlier, as fund holdings appreciated at a slower pace, Washington-based Carlyle said today in a statement. After-tax economic net income was 47 cents a share, missing the 68 cents-a-share average estimate of 12 analysts in a Bloomberg survey.

Carlyle, like competitors Blackstone Group LP and Apollo Global Management LLC, is diversifying into areas such as commodities, real estate and credit as it seeks to reduce its reliance on traditional leveraged buyouts, which tend to produce volatile earnings. Fourth-quarter profit was held down because holdings appreciated 4 percent during the quarter, compared with 7 percent in the prior year, Carlyle executives said today in a conference call with analysts and investors.

Some of the decrease in economic net income was also because of “differences in the composition of our funds experiencing appreciation,” William Conway, Carlyle’s co-chief executive officer, said during the call. “Our funds not yet accruing carry experienced greater appreciation in 2012,” he said, referring to carried interest, or the share of profits generated by the firm’s funds.

Shares Fall

Carlyle fell 7.9 percent to $33.77 at 1:54 p.m. in New York trading after losing as much as 13 percent earlier, the biggest intraday decline since its IPO last year. The shares gained 67 percent through yesterday since the May 2 public offering, which raised $671 million by selling 30.5 million shares for $22 each, below the proposed range.

Carlyle said today it hasn’t started collecting carried interest from its flagship buyout fund, the $13.7 billion Carlyle Partners V pool that began investing in 2007, even though it has generated 1.5 times its invested capital.

“It isn’t science; it’s a little bit art,” Conway said regarding the decision of when to book a fund’s profits. “We have an enormous profit built in so far. Accrued carry on the fund is in excess of $800 million.”

Fund Values

The value of the firm’s corporate private-equity funds increased 5 percent during the quarter, compared with 9 percent at Apollo, 7 percent at Blackstone and 4 percent at KKR & Co., the firm run by Henry Kravis and George Roberts. Together, the 4 percent gain in all of Carlyle’s so-called carry funds, which also include real estate and the firm’s hedge funds-of-funds, compared with a 1 percent decline for the Standard & Poor’s 500 index during the fourth quarter.