Here's why the Carlyle Group can't spend its massive pile of cash

By Portia Crowe

Carlyle Group is sitting on a mountain of cash.

The private equity behemoth, which has $192.8 billion in total assets under management, reported second-quarter earnings on Wednesday.

It said it was holding $62.8 billion in "dry powder" - money it has raised but hasn't yet spent.

The firm raised $4.7 billion in the quarter, according to a note from UBS, with new funds in the pipeline.

Great news, right?

The thing is, Carlyle doesn't look likely to invest those new funds any time soon. Despite all the fundraising in Q2, they only invested $1.6 billion.

That's because Carlyle thinks the market is overvalued.

Co-CEO Bill Conway laid it out in a call with investors:

"There are several factors driving this year's cautious investment pace. Most importantly, we think prices in many asset classes are high."

Of course, it's not just overpriced stocks on his mind.

"Our caution is further driven by uncertainties in Greece, fluctuations in the Chinese stock markets, continued high levels of leverage, and the significant movement in energy prices," Conway said.

Carlyle was hit hard by bad energy investments last quarter. Now, they plan to back out of energy for a while.