CGABL — The Carlyle Group Inc. 4.625% Subordinated Notes due 2061

Summary of The Carlyle Group Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Fee-Related Earnings (FRE): Achieved a record $1.24 billion for 2025, up 12% year-over-year, with a margin of 47%.
• Distributable Earnings (DE): Totaled $1.7 billion for the year ($4.20 per share), an 11% increase from 2024. Q4 DE was $436 million ($1.01 per share).
• Total Fee Revenues: Reached a record $2.6 billion for 2025, a 10% organic growth rate. Q4 fee revenues were $670 million, up 2% year-over-year.
• Assets Under Management (AUM): Closed the year at a record $477 billion, driven by strong investment performance and fundraising.
• Capital Returned: Returned $1.2 billion to shareholders through dividends and share buybacks in 2025.

2. Strategic Updates and Business Highlights

• Record Inflows: Generated $54 billion in inflows for 2025, exceeding the $40 billion target, with significant contributions from Global Credit and Carlyle AlpInvest.
• Investment Performance: Notable appreciation in private equity funds, with the latest U.S. Buyout fund up 17%.
• Carlyle AlpInvest: Achieved record FRE of $274 million, driven by strong fundraising and scale benefits.
• Global Credit: Delivered record FRE of $402 million, with a 20% organic CAGR over the past three years.
• Wealth Management Growth: Evergreen wealth AUM nearly doubled year-over-year, with strong demand for private equity solutions.

3. Forward Guidance and Outlook

• 2026 Expectations: Entering 2026 with strong momentum, expecting continued growth supported by a diversified fundraising pipeline and improving capital market conditions.
• Strategic Focus: Continued investment in growth initiatives, particularly in Global Wealth and insurance solutions.
• Shareholder Update: A detailed multi-year financial target and strategic direction will be shared during the shareholder update on February 26.

4. Bad News, Challenges, or Points of Concern

• Market Volatility: Recent market volatility raises concerns about sustainability in monetization momentum and potential impacts on exit strategies.
• Economic Fragility: While the economic engine appears strong, there are indications of market fragility that could affect future performance.
• Competitive Pressures: The need to navigate a complex macro environment with potential headwinds in capital markets and investor sentiment.

5. Notable Q&A Insights

• Monetization Sustainability: CEO Harvey Schwartz expressed cautious optimism about the sustainability of monetization momentum, citing strong January data from their portfolio.
• CLO Performance: The company remains confident in its CLO business, with expectations for continued strong performance despite recent market concerns.
• Direct Lending Strategy: The firm is positioning for growth in direct lending, having added key personnel to enhance origination capabilities.
• Wealth Management Branding: Emphasis on the global brand and diversification strategies resonating well with clients, with ongoing efforts to enhance the Carlyle story in the wealth channel.

Overall, The Carlyle Group Inc. reported a strong performance in 2025, achieving record financial metrics and demonstrating robust growth across various business segments, while also acknowledging potential challenges ahead in a volatile market environment.