The Carlyle Group Inc. Q2 FY2025 earnings call

• Delivered an exceptionally strong second quarter with record FRE, AUM, and DE.
• Showed significant progress against the strategic plan with global momentum.
• Noted strong organic inflows of $51 billion over 12 months, reflecting investor confidence.
• Highlighted positive macro environment with improving markets, reduced uncertainty, and accelerating M&A activity.
• Emphasized strong performance in segments like Global Credit, Carlyle AlpInvest, Global Private Equity, and Global Wealth.
• Announced leadership appointments to solidify scale, focus, alignment, and agility.
• Highlighted significant capital return to investors, with $15 billion returned over 12 months, 3x the industry average.

FRE: Record $323 million in Q2, up 18% year-over-year. First half FRE totaled $634 million, up 18% with a 48% margin. AUM: Hit record $465 billion. DE: First half DE was $886 million, the highest ever. Organic Inflows: $51 billion of organic inflows over the past 12 months. Global Credit: FRE was $111 million in Q2, up 37% year-over-year; asset-based finance AUM up 40% year-over-year. Carlyle AlpInvest: Had a record quarter with fee revenues up more than 50% and FRE nearly doubling over the past year. Global Private Equity: Tenth U.S. real estate fund closed at $9 billion, nearly 15% larger than its predecessor; U.S. buyout funds appreciated 17% to 20% over the last 12 months. Global Wealth: Assets in CAPM increased sixfold over the last year; launched a partnership with UBS for private equity secondary solutions.

• Revised full-year FRE growth outlook to approximately 10% (up from prior 6%), with potential upside if markets improve.
• Full-year inflows expected to be $50 billion (up from prior ~$40 billion).

• Market uncertainties and geopolitical stress could impact actual results.
• Dependence on macroeconomic conditions and regulatory changes affecting business segments.

Q: Bill Katz asks about the driver of FRE growth and 2026 opportunity A: Harvey and John discuss the revised outlook, momentum across the platform, and potential upside due to improved market conditions and strong performance across segments Q: Steven Chubak asks about retail commentary and fundraising A: Harvey talks about the wealth strategy, partnerships with world-class partners like UBS, and potential impact of an executive order on the retirement space Q: Alex Blostein asks about the credit business outlook A: Harvey discusses the convergence of insurance credit, private credit, and the importance of collaborative partnerships in driving growth in the credit business Q: Ben Budish asks about AlpInvest and the Solutions business A: John talks about CAPM's exceptional growth, larger fundraising for co-investment and secondaries funds, and the consistent growth potential of the AlpInvest business Q: Brian McKenna asks about Global Private Equity collaboration A: John and Harvey discuss collaboration across the Carlyle platform, strong performance in Global Private Equity, and focus on performance and realizations Q: Patrick Davitt asks about CP VII and realized fees A: John talks about the performance of CP VII, focus on continued performance to drive realizations and carry, and the significant accrued carry on the balance sheet Q: Brian Bedell asks about capital markets fees A: Harvey and John discuss the strategy behind capital markets fees, organic opportunities for growth, and the high-quality nature of the capital markets revenue stream Q: Ken Worthington asks about the wealth path forward A: Harvey talks about brand recognition, diversification of the platform, and developing client-centered solutions to meet long-term needs Q: Glenn Schorr asks about performance in the face of raised capital A: John and Harvey discuss industry tailwinds, the hyperscaler position of Carlyle in the secondaries business, and the solutions-oriented approach of the business Q: Michael Cyprys asks about private wealth product development A: Harvey talks about client-centered solutions, developing products that deliver long-term performance, and considering fundamental client needs Q: Dan Fannon asks about the insurance opportunity update A: John talks about Fortitude's growth, active pipeline, and strategic flexibility in attacking the flow segment of the insurance business Q: Kyle Voigt asks about GPE management fees and LP receptivity A: Harvey discusses positive LP engagement, strong performance and capital return in Global Private Equity, and the favorable macro environment impact on LP receptivity