CG — The Carlyle Group Inc.

Summary of The Carlyle Group Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Fee-Related Earnings (FRE): Record $1.24 billion for 2025, up 12% year-over-year; FRE margin at 47%.
• Distributable Earnings (DE): $1.7 billion for 2025 ($4.20 per share), an 11% increase from the previous year; Q4 DE was $436 million ($1.01 per share).
• Total Fee Revenues: Record $2.6 billion for the year, a 10% organic growth rate; Q4 fee revenues were $670 million, up 2% year-over-year.
• Inflows: $54 billion for 2025, significantly above the $40 billion target, marking a 32% year-over-year increase.
• Assets Under Management (AUM): Reached a record $477 billion.
• Realized Proceeds: $34 billion in 2025, nearly 20% higher year-over-year.

2. Strategic Updates and Business Highlights:

• Global Private Equity: Strong performance with significant monetizations; Carlyle was the top private equity sponsor globally by IPO proceeds, with notable transactions including Medline's $7 billion IPO.
• Carlyle AlpInvest: Achieved record FRE of $274 million, driven by strong fundraising and growth in institutional and global wealth segments.
• Global Credit: Record FRE of $402 million, with a 21% increase from the prior year; CLO inflows rose by almost 20%.
• Global Wealth: Nearly doubled evergreen wealth AUM year-over-year; launched CPAP, a private equity solution for individual investors.
• Operational Investments: Expanded wealth organization by 50% and added key leadership in direct lending.

3. Forward Guidance and Outlook:

• 2026 Expectations: Entering 2026 with strong momentum; anticipating continued growth in fee-related earnings and capital deployment.
• Market Conditions: Generally constructive for deployment and realization activity despite recent market volatility.
• Future Events: A shareholder update scheduled for February 26, 2026, to provide multi-year financial targets and strategic direction.

4. Bad News, Challenges, or Points of Concern:

• Market Volatility: Recent market fluctuations may impact future monetization momentum; management cautious about extrapolating short-term volatility into long-term trends.
• Credit Market Risks: Concerns about credit quality and potential impacts on CLO performance due to recent market conditions.
• Competitive Pressures: The need to maintain a competitive edge in a rapidly evolving market landscape, particularly in direct lending and wealth management.

5. Notable Q&A Insights:

• Sustainability of Monetization: CEO Harvey Schwartz expressed confidence in the sustainability of monetization momentum, citing positive January data from their portfolio.
• CLO Performance: Justin Plouffe reassured that their CLO business remains strong and well-positioned despite recent market volatility.
• Direct Lending Strategy: Carlyle is strategically positioning itself for growth in direct lending, having added key talent and resources to enhance origination capabilities.
• Branding in Wealth Channel: Emphasis on global brand recognition and diversification as key drivers for success in the wealth channel, with ongoing efforts to enhance client engagement.

Overall, The Carlyle Group Inc. reported a strong performance in 2025, exceeding financial targets and demonstrating resilience in a challenging market environment. The firm is optimistic about future growth while remaining cautious of potential market headwinds.