NEW YORK, Aug 5 (Reuters) - Private equity firm Carlyle

Group ( CG ) reported a larger-than expected 11.7% year-on-year

drop in second-quarter distributable earnings on Monday, as

record revenue from management and transaction fees did not

offset a big drop in performance fees.

The decline was due to Carlyle generating less cash from

asset sales. This resulted in smaller profit, because Carlyle

gets a cut of the cash generated as performance fees. Fees it

receives for managing investors' money jumped, but were not

enough to make up the difference.

Distributable earnings, which measures cash that can be

returned to shareholders, dropped to $343 million from $389

million a year earlier. This translated into after-tax

distributable earnings of 78 cents per share, which fell short

of the average Wall Street analyst estimate of 83 cents,

according to LSEG data.

The Washington, D.C.-based firm reported fee-related

earnings of $273 million, its highest ever and a 32% increase

from the previous year. Its fee-related earnings margin came in

at 46%, up from 34% in the same quarter last year.

Carlyle's assets under management rose 13% from the prior

quarter to $435 billion.

Carlyle's corporate private equity funds rose 2% during the

quarter, real estate funds appreciated 1%, infrastructure and

natural resources funds gained 3%, and global credit funds

appreciated 3%. Last month, bigger rival Blackstone

reported that its core private equity funds appreciated by 2%,

and opportunistic real estate funds grew by 0.3%.

Carlyle raised $12.4 billion from investors during the

quarter, primarily driven by commitments in real estate and the

closing of four new collateralized loan obligations.

The alternative asset manager raised $2.8 billion for its

fifth Japan buyout fund in the quarter, marking the largest

Japan-focused buyout fund ever.

Carlyle spent $4 billion on new acquisitions and retained

$83 billion of unspent capital. Together with private equity

firm KKR, it won an auction for a $10 billion student

loan book from Discover Financial Services ( DFS ) in June.