Carlyle Group Inc.
CG 10-Q Quarter ended Sept. 30, 2025
CARLYLE GROUP INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED
September 30, 2025
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM TO
Commission File Number:
001-35538
The
Carlyle Group Inc.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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(Address of principal executive offices) (Zip Code)
(
202
)
729-5626
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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4.625% Subordinated Notes due 2061 of Carlyle
Finance L.L.C.
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As of
November 4, 2025
, there were
360,410,486
shares of common stock of the registrant outstanding.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes
ý
No
¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files).
Yes
ý
No
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
1
TABLE OF CONTENTS
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Page
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Item 1.
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Unaudited Condensed Consolidated Financial Statements –
September 30, 2025
and
2024
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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2
Forward-Looking Statements
This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements
include, but are not limited to, statements related to our expectations, estimates, beliefs, projections, future plans and strategies,
anticipated events or trends, and similar expressions and statements that are not historical facts, including our expectations
regarding the performance of our business, our financial results, our liquidity and capital resources, contingencies, and our
dividend policy. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,”
“expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,”
“estimates,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements
are subject to various risks, uncertainties, and assumptions. Accordingly, there are or will be important factors that could cause
actual outcomes or results to differ materially from those indicated in these statements including, but not limited to, those
described in this Quarterly Report on Form 10-Q and under the section entitled “Risk Factors” in our Annual Report on Form
10-K for the year ended
December 31, 2024
, filed with the U.S. Securities and Exchange Commission (“SEC”) on February 27,
2025, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s
website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other
cautionary statements that are included in this Quarterly Report on Form 10-Q and in our other periodic filings with the SEC.
We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new
information, future developments, or otherwise, except as required by applicable law.
Website and Social Media Disclosure
We use our website (www.carlyle.com), our corporate Facebook page (www.facebook.com/onecarlyle), our corporate X
account (@OneCarlyle or www.x.com/onecarlyle), our corporate Instagram account (@onecarlyle or www.instagram.com/
onecarlyle), our corporate LinkedIn account (www.linkedin.com/company/the-carlyle-group), our corporate YouTube channel
(www.youtube.com/user/onecarlyle), and our corporate WeChat account (ID: gh_3e34f090ec20) as channels of distribution of
material company information. For example, financial and other material information regarding our company is routinely
posted on and accessible at www.carlyle.com. Accordingly, investors should monitor these channels, in addition to following
our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email
alerts and other information about Carlyle when you enroll your email address by visiting the “Email Alerts” section at http://
ir.carlyle.com/email-alerts. The contents of our website and social media channels are not, however, a part of this Quarterly
Report on Form 10-Q and are not incorporated by reference herein.
Carlyle does not conduct any public solicitations (including print and online articles, advertisements, or postings on social
media sites, messaging applications such as Telegram, WeChat, or WhatsApp, or other public platforms) with respect to
investments, fundraising, cryptocurrency, or opening accounts on social media sites. Any investment-related communication
received from these platforms purporting to be from a Carlyle professional is fraudulent and should be reported to authorities.
On January 1, 2020, we completed our conversion from a Delaware limited partnership named The Carlyle Group L.P.
into a Delaware Corporation named The Carlyle Group Inc. (the conversion, together with such restructuring steps and related
transactions, the “Conversion”).
Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q to “Carlyle,” the “Company,”
“we,” “us,” and “our” refer to The Carlyle Group Inc. and its consolidated subsidiaries. When we refer to our “senior Carlyle
professionals,” we are referring to the partner-level personnel of our firm. References in this Quarterly Report on Form 10-Q to
the ownership of the senior Carlyle professionals include the ownership of personal planning vehicles of these individuals.
When we refer to the “Carlyle Holdings partnerships” or “Carlyle Holdings,” we are referring to Carlyle Holdings I L.P.,
Carlyle Holdings II L.P., and Carlyle Holdings III L.P., which prior to the Conversion were the holding partnerships through
which the Company and our senior Carlyle professionals and other holders of Carlyle Holdings partnership units owned their
respective interests in our business.
“Carlyle funds,” “our funds,” and “our investment funds” refer to the investment funds and vehicles advised by Carlyle.
“Carry funds” generally refers to closed-end investment vehicles, in which commitments are drawn down over a specified
investment period, and in which the general partner receives a special residual allocation of income from limited partners,
which we refer to as carried interest, in the event that specified investment returns are achieved by the fund. Disclosures
referring to carry funds will also include the impact of certain commitments that do not earn carried interest, but are either part
3
of or associated with our carry funds. The rate of carried interest, as well as the share of carried interest allocated to Carlyle,
may vary across the carry fund platform. Carry funds generally include the following investment vehicles across our three
business segments:
•
Global Private Equity: Buyout, growth, real estate, and infrastructure & natural resources funds advised by Carlyle, as
well as certain energy funds advised by our strategic partner NGP Energy Capital Management (“NGP”) in which
Carlyle is entitled to receive a share of carried interest (“NGP Carry Funds”);
•
Global Credit: Opportunistic credit, aviation finance, and other closed-end credit funds advised by Carlyle; and
•
Carlyle AlpInvest (formerly, Global Investment Solutions): Funds and vehicles advised by AlpInvest Partners B.V.
and its affiliates (“AlpInvest”), which include global private equity programs that pursue secondary purchases and
financing of existing portfolios, managed co-investment programs, and primary fund investments.
Carry funds specifically exclude certain legacy Abingworth funds in which Carlyle is not entitled to receive a share of
carried interest, collateralized loan obligation vehicles (“CLOs”), our business development companies and associated managed
accounts, as well as capital raised from strategic third-party investors which directly invest in Fortitude (defined below)
alongside a carry fund.
For an explanation of the fund acronyms used throughout this Quarterly Report on Form 10-Q, refer to “Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operation – Our Global Investment Offerings.”
“Fortitude” refers to FGH Parent, L.P. (“FGH Parent”), the direct parent of Fortitude Group Holdings, LLC (“Fortitude
Holdings”). See Note
4
,
Investments
, to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly
Report on Form 10-Q for more information regarding the Company’s strategic investment in Fortitude.
“Fee-earning assets under management” or “Fee-earning AUM” refers to the assets we manage or advise from which we
derive recurring fund management fees. Our Fee-earning AUM is generally based on one of the following, once fees have been
activated:
(a)
the amount of limited partner capital commitments, generally for carry funds where the original investment period
has not expired and for AlpInvest carry funds during the commitment fee period;
(b)
the remaining amount of limited partner invested capital at cost, generally for carry funds and certain co-investment
vehicles where the original investment period has expired;
(c)
the amount of aggregate fee-earning collateral balance of our CLOs and other securitization vehicles, as defined in
the fund indentures (pre-2020 CLO vintages are generally exclusive of equities and defaulted positions) as of the
quarterly cut-off date;
(d)
the external investor portion of the net asset value of certain carry funds;
(e)
the fair value of Fortitude’s general account assets invested under the strategic advisory services agreement;
(f)
the gross assets (including assets acquired with leverage) of certain cross-platform credit and direct lending
products, excluding cash and cash equivalents for one of our business development companies (included in “Fee-
earning AUM based on fair value and other” in the table below); and
(g)
the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee
period has expired and certain carry funds where the investment period has expired.
“Assets under management” or “AUM” refers to the assets we manage or advise. Our AUM generally equals the sum of
the following:
(a)
the aggregate fair value of our carry funds and related co-investment vehicles, and separately managed accounts,
plus the capital that Carlyle is entitled to call from investors in those funds and vehicles (including Carlyle
commitments to those funds and vehicles and those of senior Carlyle professionals and employees) pursuant to the
terms of their capital commitments to those funds and vehicles;
4
(b)
the amount of aggregate collateral balance and principal cash or aggregate principal amount of the notes of our
CLOs and other structured products (inclusive of all positions);
(c)
the net asset value of certain carry funds;
(d)
the fair value of Fortitude’s general account assets covered by the strategic advisory services agreement; and
(e)
the gross assets (including assets acquired with leverage) of certain cross-platform credit and direct lending
products, plus the capital that Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their
capital commitments to those vehicles.
We include in our calculation of AUM and Fee-earning AUM the NGP Carry Funds that are advised by NGP. Our
calculation of AUM also includes third-party capital raised for the investment in Fortitude through a Carlyle-affiliated
investment fund and from strategic investors which directly invest in Fortitude alongside the fund. The total AUM and Fee-
earning AUM related to the strategic advisory services agreement with Fortitude is inclusive of the net asset value of
investments in Carlyle products. These amounts are also reflected in the AUM and Fee-earning AUM of the strategy in which
they are invested.
For most of our carry funds, total AUM includes the fair value of the capital invested, whereas Fee-earning AUM
includes the amount of capital commitments or the remaining amount of invested capital, depending on whether the original
investment period for the fund has expired. As such, Fee-earning AUM may be greater than total AUM when the aggregate fair
value of the remaining investments is less than the cost of those investments.
Our calculations of AUM and Fee-earning AUM may differ from the calculations of other asset managers. As a result,
these measures may not be comparable to similar measures presented by other asset managers. In addition, our calculation of
AUM (but not Fee-earning AUM) includes uncalled commitments to, and the fair value of invested capital in, our investment
funds from Carlyle and our personnel, regardless of whether such commitments or invested capital are subject to management
fees, incentive fees or performance allocations. Our calculations of AUM or Fee-earning AUM are not based on any definition
of AUM or Fee-earning AUM that is set forth in the agreements governing the investment funds that we manage or advise.
“Performance Fee Eligible AUM” represents the AUM of funds for which we are entitled to receive performance
allocations, inclusive of the fair value of investments in those funds (which we refer to as “Performance Fee Eligible Fair
Value”) and their Available Capital. Performance Fee Eligible Fair Value is “Performance Fee-Generating” when the associated
fund has achieved the specified investment returns required under the terms of the fund’s agreement and is accruing
performance revenue as of the quarter-end reporting date. Funds whose performance allocations are treated as fee related
performance allocations are excluded from these metrics.
“Perpetual Capital” refers to the assets we manage or advise which have an indefinite term and for which there is no
immediate requirement to return capital to investors upon the realization of investments made with such capital, except as
required by applicable law. Perpetual Capital may be materially reduced or terminated under certain conditions, including
reductions from changes in valuations and payments to investors, including through elections by investors to redeem their
investments, dividend payments, and other payment obligations, as well as the termination of or failure to renew the respective
investment advisory agreements. Perpetual Capital includes: (a) assets managed under the strategic advisory services agreement
with Fortitude, (b) our Core Plus real estate fund, (c) our business development companies and certain other direct lending
products, (d) Carlyle Tactical Private Credit Fund (“CTAC”), (e) our closed-end tender offer Carlyle AlpInvest Private Markets
(“CAPM”) and Carlyle AlpInvest Private Markets Secondaries (“CAPS”) funds, and (f) certain other structured credit products.
“Legacy Energy Funds” include Energy III, Energy IV, and Renew II and are managed with Riverstone and its affiliates.
The investment periods for these funds have expired and the remaining investments in each fund are being disposed of in the
ordinary course of business. The impact of these funds is no longer significant to our results of operations.
“Metropolitan” or “MRE” refers to Metropolitan Real Estate Management, LLC, which was included in the Carlyle
AlpInvest business segment prior to its sale on April 1, 2021.
5
PART I – FINANCIAL INFORMATION
Item 1.
Financial Statements
The Carlyle Group Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
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September 30,
2025
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December 31,
2024
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(Unaudited)
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Assets
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Cash and cash equivalents
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$
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$
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Cash and cash equivalents held at Consolidated Funds
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Investments, including accrued performance allocations of
$
September 30, 2025
and
December 31, 2024
, respectively
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Investments of Consolidated Funds
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Due from affiliates and other receivables, net
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Due from affiliates and other receivables of Consolidated Funds, net
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Fixed assets, net
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Lease right-of-use assets, net
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Deposits and other
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Intangible assets, net
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Deferred tax assets
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Total assets
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$
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$
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Liabilities and equity
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Debt obligations
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$
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$
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Loans payable of Consolidated Funds
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Accounts payable, accrued expenses and other liabilities
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Accrued compensation and benefits
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Due to affiliates
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Deferred revenue
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Deferred tax liabilities
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Other liabilities of Consolidated Funds
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Lease liabilities
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Accrued giveback obligations
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Total liabilities
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Commitments and contingencies
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Common stock,
$
2024
, respectively)
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Additional paid-in-capital
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Retained earnings
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Accumulated other comprehensive loss
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(
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(
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Non-controlling interests in consolidated entities
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Total equity
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Total liabilities and equity
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$
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$
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See accompanying notes.
6
The Carlyle Group Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollars in millions, except share and per share data)
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2025
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2024
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2025
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2024
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Revenues
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|||||||
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Fund management fees
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$
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$
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$
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$
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Incentive fees
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Investment income (loss)
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Performance allocations
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(
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Principal investment income
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Total investment income (loss)
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(
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Interest and other income
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Interest and other income of Consolidated Funds
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Total revenues
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Expenses
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Compensation and benefits
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Cash-based compensation and benefits
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Equity-based compensation
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Performance allocations and incentive fee related compensation
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(
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Total compensation and benefits
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(
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General, administrative and other expenses
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Interest
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Interest and other expenses of Consolidated Funds
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Other non-operating income
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(
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(
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(
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Total expenses
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Other income (loss)
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Net investment income (loss) of Consolidated Funds
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(
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Income before provision (benefit) for income taxes
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Provision (benefit) for income taxes
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(
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Net income
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Net income attributable to non-controlling interests in consolidated entities
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Net income attributable to The Carlyle Group Inc.
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$
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$
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$
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$
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Net income attributable to The Carlyle Group Inc. per common share (see Note 12)
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Basic
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$
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$
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$
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$
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Diluted
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$
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$
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$
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$
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Weighted-average common shares
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Basic
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Diluted
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Substantially all revenue is earned from affiliates of the Company. See accompanying notes.
7
The Carlyle Group Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(Dollars in millions)
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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|||||
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2025
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2024
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2025
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2024
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Net income
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$
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$
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$
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$
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|||
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Other comprehensive income (loss)
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|||||||
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Foreign currency translation adjustments
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(
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Defined benefit plans
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|||||||
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Unrealized income (loss) for the period
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(
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(
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Reclassification adjustment for gain during the period, included in
cash-based compensation and benefits expense
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(
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(
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(
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Other comprehensive income (loss)
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(
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Comprehensive income
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Comprehensive income attributable to non-controlling interests in
consolidated entities
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Comprehensive income (loss) attributable to The Carlyle Group Inc.
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$
(
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$
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$
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$
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See accompanying notes.
8
The Carlyle Group Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
(Dollars and shares in millions)
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Common
Shares
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Common
Stock
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Additional
Paid-in-
Capital
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Retained
Earnings
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Accumulated
Other
Comprehensive
Loss
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Non-
controlling
Interests in
Consolidated
Entities
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Total
Equity
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|||||||
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Balance at June 30, 2025
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$
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$
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$
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$
(
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$
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$
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||||||
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Shares repurchased
|
(
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(
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—
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(
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—
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—
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(
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||||||
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Net shares issued for equity-based awards
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—
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—
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(
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—
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—
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(
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||||||
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Equity-based compensation
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—
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—
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—
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—
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||||||
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Dividend-equivalent rights on certain equity-
based awards
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—
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—
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(
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—
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—
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||||||
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Contributions
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—
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—
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—
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—
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—
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||||||
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Dividends and distributions
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—
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—
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—
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(
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—
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(
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(
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||||||
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Net income
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—
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—
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—
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|
—
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|
||||||
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Currency translation adjustments
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—
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—
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—
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—
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(
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(
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(
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||||||
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Defined benefit plans, net
|
—
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—
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—
|
—
|
(
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—
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(
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||||||
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Balance at September 30, 2025
|
|
$
|
$
|
$
|
$
(
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$
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$
|
||||||
|
Common
Shares
|
Common
Stock
|
Additional
Paid-in-
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Non-
controlling
Interests in
Consolidated
Entities
|
Total
Equity
|
|||||||
|
Balance at December 31, 2024
|
|
$
|
$
|
$
|
$
(
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$
|
$
|
||||||
|
Shares repurchased
|
(
|
(
|
—
|
(
|
—
|
—
|
(
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||||||
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Net shares issued for equity-based awards
|
|
—
|
—
|
(
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—
|
—
|
(
|
||||||
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Equity-based compensation
|
—
|
|
|
—
|
—
|
—
|
|
||||||
|
Dividend-equivalent rights on certain equity-
based awards
|
—
|
—
|
|
(
|
—
|
—
|
|
||||||
|
Initial consolidation of a Consolidated Entity
|
—
|
—
|
—
|
—
|
—
|
|
|
||||||
|
Contributions
|
—
|
—
|
—
|
—
|
—
|
|
|
||||||
|
Dividends and distributions
|
—
|
—
|
—
|
(
|
—
|
(
|
(
|
||||||
|
Net income
|
—
|
—
|
—
|
|
—
|
|
|
||||||
|
Currency translation adjustments
|
—
|
—
|
—
|
—
|
|
|
|
||||||
|
Defined benefit plans, net
|
—
|
—
|
—
|
—
|
(
|
—
|
(
|
||||||
|
Balance at September 30, 2025
|
|
$
|
$
|
$
|
$
(
|
$
|
$
|
9
|
Common
Shares
|
Common
Stock
|
Additional
Paid-in-
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Non-
controlling
Interests in
Consolidated
Entities
|
Total
Equity
|
|||||||
|
Balance at June 30, 2024
|
|
$
|
$
|
$
|
$
(
|
$
|
$
|
||||||
|
Shares repurchased
|
(
|
(
|
—
|
(
|
—
|
—
|
(
|
||||||
|
Net shares issued for equity-based awards
|
|
—
|
—
|
(
|
—
|
—
|
(
|
||||||
|
Equity-based compensation
|
—
|
|
|
—
|
—
|
—
|
|
||||||
|
Dividend-equivalent rights on certain equity-
based awards
|
—
|
—
|
|
(
|
—
|
—
|
|
||||||
|
Contributions
|
—
|
—
|
—
|
—
|
—
|
|
|
||||||
|
Dividends and distributions
|
—
|
—
|
—
|
(
|
—
|
(
|
(
|
||||||
|
Net income
|
—
|
—
|
—
|
|
—
|
|
|
||||||
|
Currency translation adjustments
|
—
|
—
|
—
|
—
|
|
|
|
||||||
|
Change in ownership interests of a Consolidated
Entity
|
—
|
—
|
—
|
|
—
|
(
|
|
||||||
|
Defined benefit plans, net
|
—
|
—
|
—
|
—
|
|
—
|
|
||||||
|
Balance at September 30, 2024
|
|
$
|
$
|
$
|
$
(
|
$
|
$
|
||||||
|
Common
Shares
|
Common
Stock
|
Additional
Paid-in-
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Non-
controlling
Interests in
Consolidated
Entities
|
Total
Equity
|
|||||||
|
Balance at December 31, 2023
|
|
$
|
$
|
$
|
$
(
|
$
|
$
|
||||||
|
Shares repurchased
|
(
|
(
|
—
|
(
|
—
|
—
|
(
|
||||||
|
Net shares issued for equity-based awards
|
|
—
|
—
|
(
|
—
|
—
|
(
|
||||||
|
Equity-based compensation
|
—
|
|
|
—
|
—
|
—
|
|
||||||
|
Dividend-equivalent rights on certain equity-
based awards
|
—
|
—
|
|
(
|
—
|
—
|
|
||||||
|
Contributions
|
—
|
—
|
—
|
—
|
—
|
|
|
||||||
|
Dividends and distributions
|
—
|
—
|
—
|
(
|
—
|
(
|
(
|
||||||
|
Net income
|
—
|
—
|
—
|
|
—
|
|
|
||||||
|
Currency translation adjustments
|
—
|
—
|
—
|
—
|
|
|
|
||||||
|
Change in ownership interests of a Consolidated
Entity
|
—
|
—
|
—
|
|
—
|
(
|
|
||||||
|
Defined benefit plans, net
|
—
|
—
|
—
|
—
|
|
—
|
|
||||||
|
Balance at September 30, 2024
|
|
$
|
$
|
$
|
$
(
|
$
|
$
|
See accompanying notes.
10
The Carlyle Group Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in millions)
|
|
Nine Months Ended September 30,
|
||
|
|
2025
|
2024
|
|
|
Cash flows from operating activities
|
|||
|
Net income
|
$
|
$
|
|
|
Adjustments to reconcile net income to net cash flows from operating activities:
|
|||
|
Depreciation and amortization
|
|
|
|
|
Equity-based compensation
|
|
|
|
|
Non-cash performance allocations and incentive fees, net
|
|
(
|
|
|
Non-cash principal investment income
|
(
|
(
|
|
|
Other non-cash amounts
|
|
|
|
|
Consolidated Funds related:
|
|||
|
Realized/unrealized (gain) loss on investments of Consolidated Funds
|
(
|
(
|
|
|
Realized/unrealized (gain) loss from loans payable of Consolidated Funds
|
(
|
|
|
|
Purchases of investments by Consolidated Funds
|
(
|
(
|
|
|
Proceeds from sales and settlements of investments by Consolidated Funds
|
|
|
|
|
Non-cash interest income, net
|
(
|
(
|
|
|
Change in cash and cash equivalents held at Consolidated Funds
|
|
(
|
|
|
Change in other receivables held at Consolidated Funds
|
(
|
(
|
|
|
Change in other liabilities held at Consolidated Funds
|
|
|
|
|
Purchases of investments
|
(
|
(
|
|
|
Proceeds from the sale of investments
|
|
|
|
|
Payments of contingent consideration
|
(
|
(
|
|
|
Changes in deferred taxes, net
|
(
|
|
|
|
Change in due from affiliates and other receivables
|
(
|
(
|
|
|
Change in deposits and other
|
(
|
(
|
|
|
Change in accounts payable, accrued expenses and other liabilities
|
|
|
|
|
Change in accrued compensation and benefits
|
(
|
(
|
|
|
Change in due to affiliates
|
|
(
|
|
|
Change in lease right-of-use assets and lease liabilities
|
(
|
(
|
|
|
Change in deferred revenue
|
|
|
|
|
Net cash used in operating activities
|
(
|
(
|
|
|
Cash flows from investing activities
|
|||
|
Purchases of corporate treasury investments
|
|
(
|
|
|
Proceeds from corporate treasury investments
|
|
|
|
|
Purchases of fixed assets, net
|
(
|
(
|
|
|
Net cash used in investing activities
|
(
|
(
|
|
11
|
|
Nine Months Ended September 30,
|
||
|
|
2025
|
2024
|
|
|
Cash flows from financing activities
|
|||
|
Borrowings under credit facilities
|
|
|
|
|
Repayments under credit facilities
|
|
(
|
|
|
Issuance of
|
|
|
|
|
Payments on CLO borrowings
|
(
|
(
|
|
|
Proceeds from CLO borrowings, net of financing costs
|
|
|
|
|
Net borrowings on loans payable of Consolidated Funds
|
|
|
|
|
Dividends to common stockholders
|
(
|
(
|
|
|
Payment of deferred consideration for Carlyle Holdings units
|
|
(
|
|
|
Contributions from non-controlling interest holders
|
|
|
|
|
Distributions to non-controlling interest holders
|
(
|
(
|
|
|
Common shares repurchased and net share settlement of equity-based awards
|
(
|
(
|
|
|
Change in due to/from affiliates financing activities
|
|
|
|
|
Net cash provided by financing activities
|
|
|
|
|
Effect of foreign exchange rate changes
|
|
|
|
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
|
(
|
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
|
|
|
|
Cash, cash equivalents and restricted cash, end of period
|
$
|
$
|
|
|
Supplemental non-cash disclosures
|
|||
|
Initial consolidation of Consolidated Funds
|
$
|
$
|
|
|
Net asset impact of deconsolidation of Consolidated Funds
|
$
(
|
$
(
|
|
|
Reconciliation of cash, cash equivalents and restricted cash, end of period:
|
|||
|
Cash and cash equivalents
|
$
|
$
|
|
|
Restricted cash
|
|
|
|
|
Total cash, cash equivalents and restricted cash, end of period
|
$
|
$
|
|
|
Cash and cash equivalents held at Consolidated Funds
|
$
|
$
|
|
See accompanying notes.
12
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Carlyle is one of the world’s largest global investment firms that deploys private capital across its business and conducts
its operations through
three
reportable segments: Global Private Equity, Global Credit, and Carlyle AlpInvest (see Note
15
,
Segment Reporting
). The Global Private Equity segment advises buyout, growth, real estate, and infrastructure & natural
resources funds. The Global Private Equity segment also includes the NGP Carry Funds advised by NGP. The Global Credit
segment advises funds and vehicles that pursue investment strategies including insurance solutions, liquid credit, opportunistic
credit, direct lending, asset-backed finance, aviation finance, infrastructure credit, cross-platform credit products, and global
capital markets. The Carlyle AlpInvest segment (formerly, Global Investment Solutions) advises global private equity programs
that pursue secondary purchases and financing of existing portfolios, managed co-investment programs, and primary fund
investments. Carlyle typically serves as the general partner, investment manager, or collateral manager, making day-to-day
The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles
generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its consolidated
subsidiaries. In addition, certain Carlyle-affiliated funds, related co-investment entities, and certain CLOs managed by the
Company (collectively, the “Consolidated Funds”) have been consolidated in the accompanying financial statements. The
consolidation of the Consolidated Funds generally has a gross-up effect on assets, liabilities and cash flows, and generally has
no effect on the net income attributable to the Company. The economic ownership interests of the other investors in the
Consolidated Funds are reflected as non-controlling interests in consolidated entities in the accompanying condensed
consolidated financial statements. All of the investments held and notes issued by the Consolidated Funds are presented at their
estimated fair values in the Company’s condensed consolidated balance sheets. Interest and other income of the Consolidated
Funds, interest expense and other expenses of the Consolidated Funds, and net investment income (losses) of Consolidated
Funds are included in the Company’s condensed consolidated statements of operations.
Management has determined that the Company’s funds are investment companies under U.S. GAAP for the purposes of
financial reporting. U.S. GAAP for an investment company requires investments to be recorded at estimated fair value and the
unrealized gains and/or losses in an investment’s fair value are recognized on a current basis in the statements of operations.
Additionally, the funds do not consolidate their majority-owned and controlled investments (the “Portfolio Companies”). In the
preparation of these condensed consolidated financial statements, the Company has retained the specialized accounting for the
funds.
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for
interim financial information. These statements, including notes, have not been audited, exclude some of the disclosures
required for annual financial statements, and should be read in conjunction with the audited consolidated financial statements
included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2024
filed with the U.S. Securities
and Exchange Commission (“SEC”) on February 27, 2025. The operating results presented for interim periods are not
necessarily indicative of the results that may be expected for any other interim period or for the entire year. In the opinion of
management, the condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals,
which are necessary for the fair presentation of the financial condition and results of operations for the interim periods
presented.
The Company consolidates all entities that it controls either through a majority voting interest or as the primary
beneficiary of variable interest entities (“VIEs”).
The Company evaluates (1) whether it holds a variable interest in an entity, (2) whether the entity is a VIE, and (3)
whether the Company’s involvement would make it the primary beneficiary. In evaluating whether the Company holds a
variable interest, fees (including management fees, incentive fees and performance allocations) that are customary and
commensurate with the level of services provided, and where the Company does not hold other economic interests in the entity
13
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
that would absorb more than an insignificant amount of the expected losses or returns of the entity, are not considered variable
interests. The Company considers all economic interests, including indirect interests, to determine if a fee is considered a
variable interest.
For those entities where the Company holds a variable interest, the Company determines whether each of these entities
qualifies as a VIE and, if so, whether or not the Company is the primary beneficiary. The assessment of whether the entity is a
VIE is generally performed qualitatively, which requires judgment. These judgments include: (a) determining whether the
equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial
support, (b) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the economic
performance of the entity, (c) determining whether two or more parties’ equity interests should be aggregated, and (d)
determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to
receive returns from an entity.
For entities that are determined to be VIEs, the Company consolidates those entities where it has concluded it is the
primary beneficiary. The primary beneficiary is defined as the variable interest holder with (a) the power to direct the activities
of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity
or the right to receive benefits from the entity that could potentially be significant to the VIE. In evaluating whether the
Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly
by the Company.
As of
September 30, 2025
, assets and liabilities of the consolidated VIEs reflected in the condensed consolidated balance
sheets were
$
12.4
billion
and
$
10.3
billion
, respectively. As of
December 31, 2024
, assets and liabilities of the consolidated
VIEs reflected in the consolidated balance sheets were
$
8.9
billion
and
$
7.7
billion
, respectively.
Except to the extent of the
consolidated assets of the VIEs, the holders of the consolidated VIEs’ liabilities generally do not have recourse to the Company.
The Company’s Consolidated Funds
are primarily CLOs, which are VIEs that issue loans payable that are backed by
diversified collateral asset portfolios consisting primarily of loans or structured debt. In exchange for managing the collateral
for the CLOs, the Company earns investment management fees, including in some cases subordinated management fees and
contingent incentive fees. In cases where the Company consolidates the CLOs (primarily because of a retained interest that is
significant to the CLO), those management fees and contingent incentive fees have been eliminated as intercompany
transactions.
As of
September 30, 2025
, the Company held
$
392.5
million
of investments in these CLOs which represents its
maximum risk of loss.
The Company’s investments in these CLOs are generally subordinated to other interests in the entities
and entitle the Company to receive a pro rata portion of the residual cash flows, if any, from the entities. Investors in the CLOs
have no recourse against the Company for any losses sustained in the CLO structure. The Company’s Consolidated Funds also
include certain investment funds in the Global Private Equity segment that are accounted for as consolidated VIEs due to the
Company providing financing to bridge investment purchases. As of
September 30, 2025
, the Company held
$
890.1
million
of
notes receivable and investments related to these investment funds which represents its maximum risk of loss. The Company’s
Consolidated Funds also include certain funds in the Global Credit and Carlyle AlpInvest segments that are accounted for as
consolidated VIEs due to the Company having either a significant direct interest in these funds or significant
indirect interest
via the Company’s investment in Fortitude (see Note
4
,
Investments
).
Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities. Under the voting
interest entity model, the Company consolidates those entities it controls through a majority voting interest.
All significant inter-entity transactions and balances of entities consolidated have been eliminated.
The Company holds variable interests in certain VIEs that are not consolidated because the Company is not the primary
beneficiary, including its investments in certain credit vehicles and certain AlpInvest vehicles, as well as its strategic investment
in NGP Management Company, L.L.C. (“NGP Management” and, together with its affiliates, “NGP”). Refer to Note
4
,
Investments
, for information on the strategic investment in NGP. The Company’s involvement with such entities is in the form
of direct or indirect equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets
recognized by the Company relating to its variable interests in these unconsolidated entities.
14
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
interests in these non-consolidated VIEs were as follows:
|
|
As of
|
||
|
|
September 30,
2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Investments
|
$
|
$
|
|
|
Accrued performance allocations
|
|
|
|
|
Management fee receivables
|
|
|
|
|
Total
|
$
|
$
|
|
These amounts represent the Company’s maximum exposure to loss related to the unconsolidated VIEs as of
September 30, 2025
and
December 31, 2024
.
The preparation of financial statements in conformity with U.S. GAAP requires management to make assumptions and
estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting
period. Management’s estimates are based on historical experiences and other factors, including expectations of future events
that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the
process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and
their resulting impact on performance allocations and incentive fees involve a higher degree of judgment and complexity and
these assumptions and estimates may be significant to the condensed consolidated financial statements and the resulting impact
on performance allocations and incentive fees. Actual results could differ from these estimates and such differences could be
material.
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606,
Revenue from
Contracts with Customers
. Revenue is recognized when the Company transfers promised goods or services to customers in an
amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
ASC 606 includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, which includes
assessing the collectability of the consideration to which it will be entitled in exchange for the goods or services transferred to
the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the
transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a
performance obligation.
The Company accounts for performance allocations that represent a performance-based capital allocation from fund
limited partners to the Company (commonly known as “carried interest”) as earnings from financial assets within the scope of
ASC 323,
Investments—Equity Method and Joint Ventures
, and therefore are not in the scope of ASC 606. In accordance with
ASC 323, the Company records equity method income (losses) as a component of investment income based on the change in its
proportionate claim on net assets of the investment fund, including performance allocations, assuming the investment fund was
liquidated as of each reporting date pursuant to each fund’s governing agreements.
See Note
4
,
Investments
, for additional
information on the components of investments and investment income. Performance fees that do not meet the definition of
performance-based capital allocations are in the scope of ASC 606 and are included in incentive fees in the condensed
consolidated statements of operations.
The calculation of unrealized performance revenues utilizes investment valuations of the
funds’ underlying investments, which are derived using the policies, methodologies and templates prepared by the Company’s
valuation group, as described in Note
3
,
Fair Value Measurement
.
While the determination of who is the customer in a contractual arrangement will be made on a contract-by-contract
basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts.
The customer determination impacts the Company’s analysis of the accounting for contract costs.
15
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Fund Management Fees
The Company provides management services to funds in which it holds a general partner interest or to funds or certain
portfolio companies with which it has an investment advisory or investment management agreement. The Company considers
the performance obligations in its contracts with its funds to be the promise to provide (or to arrange for third parties to provide)
investment management services related to the management, policies and operations of the funds.
As it relates to the Company’s performance obligation to provide investment management services, the Company
typically satisfies this performance obligation over time as the services are rendered, as the funds simultaneously receive and
consume the benefits provided as the Company performs the service. The transaction price is the amount of consideration to
which the Company expects to be entitled in exchange for transferring the promised services to the funds. Management fees
earned from each investment management contract over the contract life represent variable consideration because the
consideration the Company is entitled to varies based on fluctuations in the basis for the management fee, for example fund net
asset value (“NAV”) or assets under management (“AUM”). Given that the management fee basis is susceptible to market
factors outside of the Company’s influence, management fees are constrained and, therefore, estimates of future period
management fees are generally not included in the transaction price. Revenue recognized for the investment management
services provided is generally the amount determined at the end of the period because that is when the uncertainty for that
period is resolved.
For closed-end carry funds in the Global Private Equity segment, management fees generally range from
1.0
%
to
2.0
%
of
limited partners’ capital commitments during the fund’s commitment period. For closed-end carry funds in the Global Credit
segment, management fees generally range from
1.0
%
to
2.0
%
of limited partners’ invested capital. Following the expiration or
termination of the investment period, management fees generally are based on the lower of cost or fair value of invested capital
and the rate charged may also be reduced. These terms may vary for certain separately managed accounts, longer-dated carry
funds, and other closed-end funds. The Company will receive management fees during a specified period of time, which is
generally
ten years
from the initial closing date, or, in some instances, from the final closing date, but such termination date
may be earlier in certain limited circumstances or later if extended for successive
one
-year
periods, typically up to a maximum
of
two years
. Depending upon the contracted terms of investment advisory or investment management and related agreements,
these fees are generally called semi-annually in advance and are recognized as earned over the subsequent
six
month
period.
For certain longer-dated carry funds and certain other closed-end funds, management fees are called quarterly over the life of
the funds.
Within the Global Credit segment, for CLOs and other structured products, management fees generally range from
0.4
%
to
0.5
%
based on the total par amount of assets or the aggregate principal amount of the notes in the CLO and are generally due
quarterly in arrears based on the terms and recognized over the respective period. Management fees for the CLOs and other
structured products are governed by indentures and collateral management agreements. The Company will receive management
fees for the CLOs, generally
five
to
ten years
after issuance, including after the CLO redemption date until all eligible assets are
disposed of or at such time the collateral manager waives fees at its discretion. Management fees for the business development
companies are due quarterly in arrears at annual rates that range from
1.0
%
of capital under management to
1.5
%
of gross
assets, excluding cash and cash equivalents. Management fees for CTAC are due monthly in arrears at an annual rate of
1.0
%
of
the month-end value of the CTAC’s net assets. Carlyle Aviation Partners’ funds have varying management fee arrangements
depending on the strategy of the particular fund.
Under the strategic advisory services agreement with Fortitude, the Company
earns a recurring management fee based on Fortitude’s general account assets, which adjusts within an agreed upon range based
on Fortitude’s overall profitability and is due quarterly in arrears. Management fees for certain of our perpetual capital
strategies and separately managed accounts in Global Credit have annual rates that generally range from
0.10
%
to
0.75
%
, which
are charged based on invested capital or the fair value of the underlying assets, though management fee arrangements vary
depending on the strategy of the particular account.
Management fees for the Company’s carry fund vehicles in the Carlyle AlpInvest segment generally range from
0.25
%
to
the commitment fee period, the management fees generally range from
0.25
%
to
1.5
%
on (i) the net invested capital, (ii) the
lower of cost or net asset value of the capital invested, or (iii) the net asset value for unrealized investments. Management fees
for the Carlyle AlpInvest carry fund vehicles are generally due quarterly in advance and recognized over the related quarter.
The investment advisers to the CAPM funds are entitled to receive a monthly management fee equal to
1.25
%
on an annualized
basis of the fund’s net asset value as of the last day of the month.
16
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
covered by separate contractual agreements, recognizes fees for these services when the performance obligation has been
satisfied and collection is reasonably assured.
The Company is generally required to offset its fund management fees earned
from the funds that have invested in the portfolio companies to which the service has been provided by a percentage of the
transaction and advisory fees allocable to those funds. This amount is referred to as the “rebate offset,” and is generally
100
%
.
Transaction and advisory fees allocable to funds that do not pay fund management fees do not have a rebate offset. The
Company also recognizes underwriting fees from the Company’s loan syndication and capital markets business, Carlyle Global
$
21.1
million
and
$
25.1
million
for the
three months ended September 30, 2025 and 2024
, respectively, and
$
143.6
million
and
$
75.1
million
for the
nine months ended September 30, 2025 and 2024
, respectively, net of rebate offsets as defined in the
respective fund limited partnership agreements.
Carlyle funds pursuant to the limited partnership agreements, including amounts related to the pursuit of actual, proposed, or
unconsummated investments, professional fees, expenses associated with the acquisition, holding and disposition of
investments, and other fund administrative expenses. For the professional fees that the Company arranges for the investment
funds, the Company concluded that the nature of its promise is to arrange for the services to be provided and it does not control
the services provided by third parties before they are transferred to the customer. Therefore, the Company concluded it is acting
in the capacity of an agent. Accordingly, the reimbursement for these professional fees paid on behalf of the investment funds is
presented on a net basis in general, administrative and other expenses in the condensed consolidated statements of operations.
The Company also incurs certain costs, primarily employee travel and entertainment costs, employee compensation and
systems costs, for which it receives reimbursement from the investment funds in connection with its performance obligation to
provide investment and management services. For reimbursable travel, compensation and systems costs, the Company
concluded it controls the services provided by its employees and the resources used to develop applicable systems before they
are transferred to the customer and therefore is a principal. Accordingly, the reimbursement for these costs incurred by the
Company to manage the fund limited partnerships are presented on a gross basis in interest and other income in the condensed
consolidated statements of operations and the expense in general, administrative and other expenses or cash-based
compensation and benefits expenses in the condensed consolidated statements of operations.
Incentive Fee
s
The Company is also entitled to receive performance-based incentive fees when the return on assets under management
exceeds certain benchmark returns or other performance targets. In such arrangements, incentive fees are recognized when the
performance benchmark has been achieved. Incentive fees are variable consideration because they are contingent upon the
investment vehicle achieving stipulated investment return hurdles. Investment returns are highly susceptible to market factors
outside of the Company’s influence. Accordingly, incentive fees are constrained until all uncertainty is resolved. Estimates of
future period incentive fees are generally not included in the transaction price because these estimates are constrained. The
transaction price for incentive fees is generally the amount determined at the end of each accounting period to which they relate
because that is when the uncertainty for that period is resolved, as these fees are not subject to clawback.
Investment Income (Loss), including Performance Allocations
Investment income (loss) represents the unrealized and realized gains and losses resulting from the Company’s equity
method investments, including any associated general partner performance allocations, and other principal investments,
including CLOs.
General partner performance allocations consist of the allocation of profits from certain of the funds to which the
Company is entitled (commonly known as carried interest).
For closed-end carry funds in the Global Private Equity and Global Credit segments, the Company is generally entitled to
a
20
%
allocation (or approximately
2
%
to
12.5
%
for most of the Carlyle AlpInvest segment carry fund vehicles) of the net
realized income or gain as a carried interest after returning the invested capital, the allocation of preferred returns of generally
agreement). These terms may vary on longer-dated funds, certain credit funds, and external co-investment vehicles.
Carried
interest is recognized upon appreciation of the funds’ investment values above certain return hurdles set forth in each respective
17
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
partnership agreement. The Company recognizes revenues attributable to performance allocations based upon the amount that
would be due pursuant to the fund partnership agreement at each period end as if the funds were terminated at that date.
Accordingly, the amount recognized as investment income for performance allocations reflects the Company’s share of the
gains and losses of the associated funds’ underlying investments measured at their then-current fair values relative to the fair
values as of the end of the prior period. Because of the inherent uncertainty, these estimated values may differ significantly
from the values that would have been used had a ready market for the investments existed, and it is reasonably possible that the
difference could be material.
Carried interest is ultimately realized when: (i) an underlying investment is profitably disposed of, (ii) certain costs borne
by the limited partner investors have been reimbursed, (iii) the fund’s cumulative returns are in excess of the preferred return,
and (iv) the Company has decided to collect carry rather than return additional capital to limited partner investors. Realized
carried interest may be required to be returned by the Company in future periods if the fund’s investment values decline below
certain levels. When the fair value of a fund’s investments remains constant or falls below certain return hurdles, previously
recognized performance allocations are reversed. In all cases, each fund is considered separately in this regard, and for a given
fund, performance allocations can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s
investments at their then-current fair values, previously recognized and distributed carried interest would be required to be
Company accrued
$
44.6
million
and
$
44.0
million
, respectively, for giveback obligations.
Company receives or is due cash income, such as dividends or distributions. Unrealized principal investment income (loss)
results from the Company’s proportionate share of the investee’s unrealized earnings, including changes in the fair value of the
underlying investment, as well as the reversal of unrealized gain (loss) at the time an investment is realized. As it relates to the
Company’s investments in NGP (see Note
4
,
Investments
), principal investment income includes the related amortization of the
basis difference between the Company’s carrying value of its investment and the Company’s share of underlying net assets of
the investee, as well as the compensation expense associated with compensatory arrangements provided by the Company to
employees of its equity method investee, and impairment charges.
Interest Income
Interest income is recognized when earned. For debt securities representing non-investment grade beneficial interests in
securitizations, the effective yield is determined based on the estimated cash flows of the security. Changes in the effective
yield of these securities due to changes in estimated cash flows are recognized on a prospective basis as adjustments to interest
income in future periods.
Interest income earned by the Company is included in interest and other income in the accompanying
million
for the
three months ended September 30, 2025 and 2024
, respectively, and
$
412.4
million
and
$
449.9
million
for the
nine months ended September 30, 2025 and 2024
, respectively, and is included in interest and other income of Consolidated
Funds in the accompanying condensed consolidated statements of operations.
The Company measures all expected credit losses for financial assets held at the reporting date in accordance with ASC
326,
Financial Instruments—Credit Losses
, based on historical experience, current conditions, and reasonable and supportable
forecasts. The Company assesses the collection risk characteristics of the outstanding amounts in its due from affiliates balance
into the following pools of receivables:
•
Reimbursable fund expenses receivables,
•
Management fee receivables,
•
Incentive fee receivables,
•
Transaction fee receivables,
•
Portfolio fee receivables, and
•
Notes receivable.
The Company generally utilizes either historical credit loss information or discounted cash flows to calculate expected
credit losses for each pool. The Company’s receivables are predominantly with its investment funds, which have low risk of
credit loss based on the Company’s historical experience. Historical credit loss data may be adjusted for current conditions and
18
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
reasonable and supportable forecasts, including the Company’s expectation of near-term realization based on the liquidity of the
Cash-Based Compensation and Benefits
– Cash-based compensation and benefits includes salaries, bonuses
(discretionary awards and guaranteed amounts), performance payment arrangements, and benefits paid and payable to Carlyle
employees. Bonuses are accrued over the service period to which they relate.
Equity-Based Compensation
– Compensation expense relating to the issuance of equity-based awards is measured at fair
value on the grant date. The compensation expense for awards that vest over a future service period is recognized over the
relevant service period on a straight-line basis. The compensation expense for awards that do not require future service is
recognized immediately. Cash settled equity-based awards are classified as liabilities and are re-measured at the end of each
reporting period. The compensation expense for awards that contain performance conditions is recognized when it is probable
that the performance conditions will be achieved. The compensation expense for awards that contain market conditions is based
on a grant-date fair value that factors in the probability that the market conditions will be achieved and is recognized over the
requisite service period on a straight-line basis.
Certain equity-based awards contain dividend-equivalent rights, which are subject to the same terms and conditions,
including with respect to vesting and settlement, that apply to the related award. Dividend-equivalents are accounted for as a
reclassification from retained earnings to additional paid-in capital at the time dividends are declared and do not result in
incremental compensation expense.
Equity-based awards issued to non-employees are generally recognized as general, administrative and other expenses,
except to the extent they are recognized as part of the Company’s equity method earnings because they are issued to employees
of equity method investees.
The Company recognizes equity-based award forfeitures in the period they occur as a reversal of previously recognized
compensation expense for awards that vest based on service and/or performance conditions. The reduction in compensation
expense is determined based on the specific awards forfeited during that period. Furthermore, the Company recognizes all
excess tax benefits and deficiencies as income tax benefit or expense in the condensed consolidated statements of operations.
For awards with a market condition (e.g., achievement of certain stock price hurdles) that are forfeited due to the market
condition not being achieved, the related equity-based compensation expense is not reversed.
Performance Allocations and Incentive Fee Related Compensation –
A portion of the performance allocations and
incentive fees and certain other interests earned is due to employees and advisors of the Company. These amounts are
accounted for as profit sharing interests in compensation expense in a systematic and rational manner in conjunction with the
recognition of the related performance allocations and incentive fee revenue and, until paid, are recognized as a component of
the accrued compensation and benefits liability. The liability is measured assuming the hypothetical liquidation of the
associated funds’ underlying investments as of the measurement date. Accordingly, upon a reversal of performance allocations
or incentive fee revenue, the related compensation expense, if any, is also reversed. As any vesting requirement is accelerated
upon realization, the service period is not considered substantive when recording the liability based on the hypothetical
liquidation value.
As of
September 30, 2025
and
December 31, 2024
, the Company recorded a liability of
$
4.7
billion
and
$
4.8
billion
, respectively, related to the portion of accrued performance allocations and incentive fees due to employees and
advisors, which was included in accrued compensation and benefits in the accompanying condensed consolidated balance
The Carlyle Group Inc. is a corporation for U.S. federal income tax purposes and thus is subject to U.S. federal, state, and
local corporate income taxes. Tax positions taken by the Company are subject to periodic audit by U.S. federal, state, local, and
foreign taxing authorities. The interim provision for income taxes is calculated using the discrete effective tax rate method as
allowed by ASC 740,
Accounting for Income Taxes
. The discrete method is applied when the application of the estimated
annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. In addition, the
discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on
that basis.
19
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred
tax assets and liabilities for the expected future consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial
statement reporting and the tax basis of assets and liabilities using enacted tax rates in effect for the period in which the
difference is expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the
period of the change in the provision for income taxes. Further, deferred tax assets are recognized for the expected realization of
available net operating loss and tax credit carry forwards. A valuation allowance is recorded on the Company’s gross deferred
tax assets when it is “more likely than not” that such asset will not be realized. When evaluating the realizability of the
Company’s deferred tax assets, all evidence, both positive and negative, is evaluated. Items considered in this analysis include
the ability to carry back losses, the reversal of temporary differences, tax planning strategies, and expectations of future
earnings. The Company accounts for the valuation allowance assessment on its deferred tax assets and without regard to the
Company’s potential future corporate alternative minimum tax (“CAMT”) status or global minimum tax status under the Pillar
Two Global Anti-Base Erosion (“GloBE”) model rules of the Organization for Economic Co-operation and Development
(“OECD”). Therefore, the Company accounts for CAMT and the global minimum tax in the period as incurred. Lastly, the
Company accounts for the tax on global intangible low-taxed income (“GILTI”) as incurred and therefore has not recorded
deferred taxes related to GILTI on its foreign subsidiaries.
Under U.S. GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is “more
likely than not” to be sustained upon examination. The Company analyzes its tax filing positions in all of the U.S. federal, state,
local, and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these
jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is
established, which is included in accounts payable, accrued expenses and other liabilities in the condensed consolidated
financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax positions in the
provision for income taxes. If recognized, the entire amount of unrecognized tax positions would be recorded as a reduction in
the provision for income taxes.
Non-controlling interests in consolidated entities represent the component of equity in consolidated entities held by third-
party investors. These interests are adjusted for general partner allocations which occur during the reporting period. Any change
in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between
the controlling and non-controlling interests. Transaction costs incurred in connection with such changes in ownership of a
subsidiary are recorded as a direct charge to equity.
The Company computes earnings per common share in accordance with ASC 260,
Earnings Per Share
. Basic earnings
per common share is calculated by dividing net income (loss) attributable to the common shares of the Company by the
weighted-average number of common shares outstanding for the period. Diluted earnings per common share reflects the
assumed conversion of all dilutive securities. The Company applies the treasury stock method to determine the dilutive
weighted-average common shares outstanding for certain equity-based compensation awards. For certain equity-based
compensation awards that contain performance or market conditions, the number of contingently issuable common shares is
included in diluted earnings per common share based on the number of common shares, if any, that would be issuable under the
terms of the awards if the end of the reporting period were the end of the contingency period, if the result is dilutive.
The underlying entities that the Company manages and invests in (and in certain cases, consolidates) are primarily
investment companies which account for their investments at estimated fair value.
The fair value measurement accounting guidance under ASC 820,
Fair Value Measurement
, establishes a hierarchical
disclosure framework which ranks the observability of market price inputs used in measuring financial instruments at fair value.
The observability of inputs is impacted by a number of factors, including the type of financial instrument, the characteristics
specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions
between market participants. Financial instruments with readily available quoted prices, or for which fair value can be measured
20
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
from quoted prices in active markets, will generally have a higher degree of market price observability and a lesser degree of
judgment applied in determining fair value.
Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs
used in the determination of fair values, as follows:
Level I
– inputs to the valuation methodology are quoted prices available in active markets for identical
instruments as of the reporting date. The type of financial instruments in this category include unrestricted
securities, such as equities and derivatives, listed in active markets. The Company does not adjust the quoted price
for these instruments, even in situations where the Company holds a large position and a sale could reasonably
impact the quoted price.
Level II
– inputs to the valuation methodology are other than quoted prices in active markets, which are either
directly or indirectly observable as of the reporting date. The types of financial instruments in this category
include less liquid and restricted securities listed in active markets, securities traded in other than active markets,
government and agency securities, and certain over-the-counter derivatives where the fair value is based on
observable inputs.
Level III
– inputs to the valuation methodology are unobservable and significant to overall fair value
measurement. The inputs into the determination of fair value require significant management judgment or
estimation. The types of financial instruments in this category include investments in privately-held entities, non-
investment grade residual interests in securitizations, collateralized loan obligations, and certain over-the-counter
derivatives where the fair value is based on unobservable inputs.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such
cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is
based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the
significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to
the financial instrument.
In certain cases, debt and equity securities (including corporate treasury investments) are valued on the basis of prices
from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the
value of a particular investment, pricing services may use certain information with respect to transactions in such investments,
quotations from dealers, pricing matrices, market transactions in comparable investments, and various relationships between
investments.
In the absence of observable market prices, the Company values its investments and its funds’ investments using
valuation methodologies applied on a consistent basis. For some investments little market activity may exist. Management’s
determination of fair value is then based on the best information available in the circumstances and may incorporate
management’s own assumptions and involve a significant degree of judgment, taking into consideration a combination of
internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Investments for
which market prices are not observable include private investments in the equity and debt of operating companies and real
assets, CLO investments and CLO loans payable and fund investments. The valuation technique for each of these investments is
described below:
Investments in Operating Companies and Real Assets –
The fair values of private investments in operating companies
and real assets are generally determined by reference to the income approach (including the discounted cash flow
method and the income capitalization method) and the market approach (including the comparable publicly traded
company method and the comparable transaction method). Valuations under these approaches are typically derived by
reference to investment-specific inputs (such as projected cash flows, earnings before interest, taxes, depreciation and
amortization (“EBITDA”), and net operating income) combined with market-based inputs (such as discount rates,
EBITDA multiples and capitalization rates). In many cases, the investment-specific inputs are unaudited at the time
received. Management may also adjust the market-based inputs to account for differences between the subject
investment and the companies, assets or investments used to derive the market-based inputs. Adjustments to
observable valuation measures are frequently made upon the initial investment to calibrate the initial investment
valuation to industry observable inputs. Such adjustments are made to align the investment to observable industry
21
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
inputs for differences in size, profitability, projected growth rates, geography, capital structure, and other factors as
applicable. The adjustments are then reviewed with each subsequent valuation to assess how the investment has
evolved relative to the observable inputs. Additionally, the investment may be subject to certain specific risks and/or
development milestones which are also taken into account in the valuation assessment. Option pricing models and
similar tools may also be considered but do not currently drive a significant portion of operating company or real asset
valuations and are used primarily to value warrants, derivatives, certain restrictions, and other atypical investment
instruments.
Credit-Oriented Investments –
The fair values of credit-oriented investments (including corporate treasury
investments) are generally determined on the basis of prices between market participants provided by reputable dealers
or pricing services. In determining the value of a particular investment, pricing services may use certain information
with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in
comparable investments, and various relationships between investments. Specifically, for investments in distressed
debt and corporate loans and bonds, the fair values are generally determined by valuations of comparable investments.
In some instances, the Company may utilize other valuation techniques, including the discounted cash flow method.
CLO Investments and CLO Loans Payable
– The Company measures the financial liabilities of its consolidated CLOs
based on the fair value of the financial assets of its consolidated CLOs, as the Company believes the fair value of the
financial assets are more observable. The fair values of the CLO loan and bond assets are primarily based on
quotations from reputable dealers or relevant pricing services. In situations where valuation quotations are unavailable,
the assets are valued based on similar securities, market index changes, and other factors. The Company performs
certain procedures to ensure the reliability of the quotations from pricing services for its CLO assets and CLO
structured asset positions, which generally includes corroborating prices with a discounted cash flow analysis.
Generally, the loan and bond assets of the CLOs are not publicly traded and are classified as Level III. The fair values
of the CLO structured asset positions are determined based on both discounted cash flow analyses and third party
quotes. Those analyses consider the position size, liquidity, current financial condition of the CLOs, the third party
financing environment, reinvestment rates, recovery lags, discount rates, and default forecasts and are compared to
broker quotations from market makers and third party dealers.
The Company measures the CLO loan payables held by third party beneficial interest holders on the basis of the fair
value of the financial assets of the CLO and the beneficial interests held by the Company. The Company continues to
measure the CLO loans payable that it holds at fair value based on relevant pricing services or discounted cash flow
analyses, as described above.
Fund Investments
– The Company’s primary and secondary investments in external funds are generally valued as its
proportionate share of the most recent net asset value provided by the third-party general partners of the underlying
fund partnerships, adjusted for subsequent cash flows received from or distributed to the underlying fund partnerships.
The Company also adjusts for any changes in the market prices of public securities held by the underlying fund
partnerships and may also apply a market adjustment to reflect the estimated change in the fair value of the underlying
fund partnerships’ non-public investments from the date of the most recent net asset value provided by the third-party
general partners.
Investment professionals with responsibility for the underlying investments are responsible for preparing the investment
valuations pursuant to the policies, methodologies, and templates prepared by the Company’s valuation group, which is a team
made up of dedicated valuation professionals reporting to the Company’s Chief Accounting Officer. The valuation group is
responsible for maintaining the Company’s valuation policy and related guidance, templates, and systems that are designed to
be consistent with the guidance found in ASC 820. These valuations, inputs, and preliminary conclusions are reviewed by the
fund management teams. The valuations are then reviewed and approved by the respective fund valuation subcommittees,
which include the respective fund head(s), segment head, chief financial officer, and chief accounting officer, as well as
members of the valuation group. The valuation group compiles the aggregate results and significant matters and presents them
for review and approval by the global valuation committee, which includes the Company’s Chief Executive Officer, Chief Risk
Officer, Chief Financial Officer, Chief Accounting Officer, and the business segment heads, and is observed by the Chief
Compliance Officer, the Chief Audit Executive, the Company’s Audit Committee, and others. Additionally, each quarter a
sample of valuations are reviewed by external valuation firms. Valuations of the funds’ investments are used in the calculation
of accrued performance allocations, or “carried interest.”
22
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Investments include (i) the Company’s ownership interests (typically general partner interests) in the Funds, including the
Company’s investment in Fortitude held through Carlyle FRL (which are accounted for as equity method investments), (ii) the
Company’s investment in NGP (which is accounted for as an equity method investment), (iii) the investments held by the
Consolidated Funds (which are presented at fair value in the Company’s condensed consolidated financial statements), and (iv)
certain credit-oriented investments, including investments in the CLOs and the common shares of Carlyle Secured Lending,
Inc. (“CGBD,” see Note
4
,
Investments
, and Note
9
,
Related Party Transactions
, for more information), which are accounted
for as trading securities.
Upon the sale of a security or other investment, the realized net gain or loss is computed on a weighted average cost
basis, with the exception of the investments held by the CLOs, which compute the realized net gain or loss on a first in, first out
basis. Securities transactions are recorded on a trade date basis.
The Company accounts for all investments in which it has or is otherwise presumed to have significant influence,
including investments in the unconsolidated Funds and the Company’s investment in NGP, using the equity method of
accounting. The carrying value of equity method investments is determined based on amounts invested by the Company,
adjusted for the equity in earnings or losses of the investee (including performance allocations) allocated based on the
respective partnership agreement, less distributions received. The Company evaluates its equity method investments for
impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be
recoverable.
Cash and cash equivalents include cash held at banks and cash held for distributions, including investments with original
maturities of less than three months when purchased.
The Company is subject to credit risk should a financial institution be
unable to fulfil its obligations and if balances held at a financial institution exceed insured limits.
Cash and cash equivalents held at Consolidated Funds consists of cash and cash equivalents held by the Consolidated
Funds, which, although not legally restricted, is not available to fund the general liquidity needs of the Company.
Restricted cash primarily represents cash held by the Company’s foreign subsidiaries due to certain government
December 31, 2024
, the Company held restricted cash of
$
4.7
million
and
$
0.5
million
, respectively, which are included in
Deposits and other in the condensed consolidated balance sheets.
Corporate treasury investments represent investments in U.S. Treasury and government agency obligations, commercial
paper, certificates of deposit, other investment grade securities and other investments with original maturities of greater than
three months when purchased. These investments are accounted for as trading securities in which changes in the fair value of
each investment are recorded through investment income (loss). Any interest earned on debt investments is recorded through
interest and other income.
The Company uses derivative instruments primarily to reduce its exposure to changes in foreign currency exchange rates.
Derivative instruments are recognized at fair value in the condensed consolidated balance sheets with changes in fair value
23
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
As it relates to certain European CLOs sponsored by the Company, securities sold under agreements to repurchase
(“Repurchase Agreements”) are accounted for as collateralized financing transactions. The Company provides securities to
counterparties to collateralize amounts borrowed under Repurchase Agreements on terms that permit the counterparties to
repledge or resell the securities to others. As of
September 30, 2025
,
$
325.9
million
of securities were transferred to
counterparties under Repurchase Agreements and are included within investments in the condensed consolidated balance
sheets. Cash received under Repurchase Agreements is recognized as a liability within debt obligations in the condensed
Fixed assets consist of furniture, fixtures and equipment, leasehold improvements, computer hardware and software, and
fractional shares in corporate aircraft, and are stated at cost, less accumulated depreciation and amortization. Depreciation is
recognized on a straight-line method over the assets’ estimated useful lives, which for leasehold improvements are the lesser of
the lease terms or the life of the asset, and
three
to
seven years
for other fixed assets. Fixed assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
The Company accounts for its leases in accordance with ASC 842,
Leases
, and recognizes a lease liability and right-of-
use (“ROU”) asset in the condensed consolidated balance sheets for contracts that it determines are leases or contain a lease.
The Company’s leases primarily consist of operating leases for office space in various countries around the world. The
Company also has operating leases for office equipment and vehicles, which are not significant. The Company does not
separate non-lease components from lease components for its office space and equipment operating leases and instead accounts
for each separate lease component and its associated non-lease component as a single lease component. ROU assets represent
the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to
make lease payments arising from the leases. The Company’s ROU assets and lease liabilities are recognized at lease
commencement based on the present value of lease payments over the lease term. Lease ROU assets include initial direct costs
incurred by the Company and are presented net of deferred rent and lease incentives. Absent an implicit interest rate in the
lease, the Company uses its incremental borrowing rate, adjusted for the effects of collateralization, based on the information
available at commencement in determining the present value of lease payments. The Company’s lease terms may include
options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. Lease
expense for lease payments is recognized on a straight-line basis over the lease term. Lease ROU assets are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
The Company does not recognize a lease liability or ROU asset on the balance sheet for short-term leases. Instead, the
Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is
defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to
purchase the underlying asset that the lessee is reasonably certain to exercise. When determining whether a lease qualifies as a
short-term lease, the Company evaluates the lease term and the purchase option in the same manner as all other leases.
ROU assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable.
The Company’s intangible assets consist of acquired contractual rights to earn future fee income, including management
and advisory fees, customer relationships, and acquired trademarks. Finite-lived intangible assets are amortized over their
estimated useful lives, which range from
four
to
eight years
, and are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be recoverable.
Goodwill represents the excess of cost over the identifiable net assets of businesses acquired and is recorded in the
functional currency of the acquired entity. Goodwill is recognized as an asset and is reviewed for impairment annually as of
October 1 and between annual tests when events and circumstances indicate that impairment may have occurred.
24
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Deferred revenue represents management fees and other revenue received prior to the balance sheet date, which has not
yet been earned.
Deferred revenue also includes transaction and portfolio advisory fees received by the Company that are
required to offset fund management fees pursuant to the related fund agreements.
The Company’s accumulated other comprehensive income (loss) comprise foreign currency translation adjustments and
income (loss) as of
September 30, 2025
and
December 31, 2024
were as follows:
|
|
As of
|
||
|
|
September 30,
2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Currency translation adjustments
|
$
(
|
$
(
|
|
|
Unrealized losses on defined benefit plans
|
(
|
(
|
|
|
Total
|
$
(
|
$
(
|
|
Non-U.S. dollar denominated assets and liabilities are translated at period-end rates of exchange, and the condensed
(losses) resulting from transactions outside of the functional currency of an entity of
$
2.9
million
and
$(
10.2
) million
for the
three months ended September 30, 2025 and 2024
, respectively, and
$(
22.2
) million
and
$(
9.2
) million
for the
nine months
ended September 30, 2025 and 2024
, respectively, are included in general, administrative and other expenses in the condensed
consolidated statements of operations.
The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the Financial
Accounting Standards Board (“FASB”). ASUs not listed below were assessed and either determined to be not applicable or
expected to have minimal impact on the Company’s condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09,
Improvements to Income Tax Disclosure
, which requires disclosure
of disaggregated information about a reporting entity’s effective tax rate reconciliation, using both percentages and reporting
currency amounts for specific standardized categories, as well as disclosure of income taxes paid disaggregated by jurisdiction.
The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company
does not expect the adoption of this guidance to have a material impact on the Company’s condensed consolidated financial
statements.
In November 2024, the FASB issued ASU 2024-03,
Disaggregation of Income Statement Expenses
, which requires
disaggregated disclosures of certain categories of expenses on an annual and interim basis including employee compensation,
depreciation, and intangible asset amortization for each income statement line item that contains those expenses. The guidance
is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The
Company is currently evaluating the impact of adopting this guidance on its condensed consolidated financial statements.
25
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
fair value hierarchy levels as disclosed in Note
2
,
Summary of Significant Accounting Policies
, as of
September 30, 2025
:
|
(Dollars in millions)
|
Level I
|
Level II
|
Level III
|
Total
|
|||
|
Assets
|
|||||||
|
Investments of Consolidated Funds
(1)
:
|
|||||||
|
Equity securities
(2)
|
$
|
$
|
$
|
$
|
|||
|
Bonds
|
|
|
|
|
|||
|
Loans
|
|
|
|
|
|||
|
|
|
|
|
||||
|
Investments in CLOs and other:
|
|||||||
|
Investments in CLOs
|
|
|
|
|
|||
|
Other investments
(3)
|
|
|
|
|
|||
|
Foreign currency forward contracts
|
|
|
|
|
|||
|
Subtotal
|
$
|
$
|
$
|
$
|
|||
|
Investments measured at net asset value
|
|
||||||
|
Total
|
$
|
||||||
|
Liabilities
|
|||||||
|
Loans payable of Consolidated Funds
(4)(5)
|
$
|
$
|
$
|
$
|
|||
|
Foreign currency forward contracts
|
|
|
|
|
|||
|
Total
|
$
|
$
|
$
|
$
|
(1)
This balance excludes
$
1.3
billion
of Investments of Consolidated Funds that are included in Investments measured at net asset
value, which relate to certain consolidated investment fund of funds in the Company’s Carlyle AlpInvest segment.
(2)
This balance includes
$
845.3
million
related to investments that have been bridged by the Company to investment funds and are
accounted for as consolidated VIEs as of
September 30, 2025
.
(3)
The Level III balance excludes
$
63.0
million
related to three corporate investments in equity securities which the Company has
elected to account for under the measurement alternative for equity securities without readily determinable fair values pursuant to
ASC 321,
Investments–Equity Securities
. As a non-recurring fair value measurement, the fair value of these equity securities is
excluded from the tabular Level III rollforward disclosures.
(4)
Senior and subordinated notes issued by CLO vehicles are valued based on the more observable fair value of the CLO financial
assets, less (i) the fair value of any beneficial interest held by the Company and (ii) the carrying value of any beneficial interests that
represent compensation for services.
(5)
Loans payable of Consolidated Funds balance excludes
$
928.9
million
of senior notes measured at amortized cost and a
$
61.9
million
revolving credit balance, which related to certain consolidated investment fund of funds in the Company’s Carlyle
AlpInvest segment.
26
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis by the
above fair value hierarchy levels as of
December 31, 2024
:
|
(Dollars in millions)
|
Level I
|
Level II
|
Level III
|
Total
|
|||
|
Assets
|
|||||||
|
Investments of Consolidated Funds
(1)
:
|
|||||||
|
Equity securities
(2)
|
$
|
$
|
$
|
$
|
|||
|
Bonds
|
|
|
|
|
|||
|
Loans
|
|
|
|
|
|||
|
Other
|
|
|
|
|
|||
|
|
|
|
|
||||
|
Investments in CLOs and other:
|
|||||||
|
Investments in CLOs
|
|
|
|
|
|||
|
Other investments
(3)
|
|
|
|
|
|||
|
|
|
|
|
||||
|
Subtotal
|
$
|
$
|
$
|
$
|
|||
|
Investments measured at net asset value
|
|
||||||
|
Total
|
$
|
||||||
|
Liabilities
|
|||||||
|
Loans payable of Consolidated Funds
(4)(5)
|
$
|
$
|
$
|
$
|
|||
|
Foreign currency forward contracts
|
|
|
|
|
|||
|
Total
|
$
|
$
|
$
|
$
|
(1)
This balance excludes
$
312.6
million
of Investments of Consolidated Funds that are included in Investments measured at net asset
value, which relate to certain consolidated investment fund of funds in the Company’s Carlyle AlpInvest segment.
(2)
This balance includes
$
441.9
million
related to investments that have been bridged by the Company to investment funds and are
accounted for as consolidated VIEs as of
December 31, 2024
.
(3)
The Level III balance excludes
$
55.4
million
related to three corporate investments in equity securities which the Company has
elected to account for under the measurement alternative for equity securities without readily determinable fair values pursuant to
ASC 321,
Investments–Equity Securities
. As a non-recurring fair value measurement, the fair value of these equity securities is
excluded from the tabular Level III rollforward disclosures.
(4)
Senior and subordinated notes issued by CLO vehicles are valued based on the more observable fair value of the CLO financial
assets, less (i) the fair value of any beneficial interests held by the Company and (ii) the carrying value of any beneficial interests that
represent compensation for services.
(5)
Loans payable of Consolidated Funds balance excludes a
$
55.1
million
revolving credit balance.
27
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
determine fair value are as follows (Dollars in millions):
|
Financial Assets
|
|||||||||||
|
Three Months Ended September 30, 2025
|
|||||||||||
|
|
Investments of Consolidated Funds
|
|
|
||||||||
|
|
Equity
securities
|
Bonds
|
Loans
|
Investments in
CLOs
|
Other
investments
|
Total
|
|||||
|
Balance, beginning of period
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
|
Initial consolidation/deconsolidation of funds
(1)
|
|
(
|
(
|
(
|
|
(
|
|||||
|
Purchases
|
|
|
|
|
|
|
|||||
|
Sales and distributions
|
(
|
(
|
(
|
(
|
(
|
(
|
|||||
|
Settlements
|
|
|
(
|
|
|
(
|
|||||
|
Realized and unrealized gains (losses), net
|
|||||||||||
|
Included in earnings
|
(
|
|
(
|
|
(
|
(
|
|||||
|
Included in other comprehensive income
|
|
(
|
(
|
(
|
|
(
|
|||||
|
Balance, end of period
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
|
Changes in unrealized gains (losses) included in earnings
related to financial assets still held at the reporting date
|
$
(
|
$
|
$
(
|
$
|
$
(
|
$
(
|
|||||
|
Changes in unrealized gains (losses) included in other
comprehensive income related to financial assets still held at
the reporting date
|
$
|
$
|
$
|
$
(
|
$
|
$
(
|
|||||
|
Financial Assets
|
|||||||||||
|
Nine Months Ended September 30, 2025
|
|||||||||||
|
|
Investments of Consolidated Funds
|
|
|
||||||||
|
|
Equity
securities
|
Bonds
|
Loans
|
Investments in
CLOs
|
Other
investments
|
Total
|
|||||
|
Balance, beginning of period
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
|
Initial consolidation/deconsolidation of funds
(2)
|
|
(
|
(
|
|
|
(
|
|||||
|
Transfer out related to the Exchange
(3)
|
|
|
|
|
(
|
(
|
|||||
|
Purchases
|
|
|
|
|
|
|
|||||
|
Sales and distributions
|
(
|
(
|
(
|
(
|
(
|
(
|
|||||
|
Settlements
|
|
(
|
(
|
|
|
(
|
|||||
|
Realized and unrealized gains (losses), net
|
|||||||||||
|
Included in earnings
|
|
|
(
|
|
|
(
|
|||||
|
Included in other comprehensive income
|
|
|
|
|
|
|
|||||
|
Balance, end of period
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
|
Changes in unrealized gains (losses) included in earnings
related to financial assets still held at the reporting date
|
$
(
|
$
|
$
(
|
$
|
$
|
$
(
|
|||||
|
Changes in unrealized gains (losses) included in other
comprehensive income related to financial assets still held at
the reporting date
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
(1)
As a result of the initial consolidation of
three
funds and deconsolidation of
one
fund during the
three months ended September 30,
2025
.
(2)
As a result of the initial consolidation of
four
funds and deconsolidation of
two
funds during the
nine months ended September 30,
2025
.
(3)
Represents the exchange of the BDC Preferred Shares, which were valued using Level III inputs, for common shares of CGBD, which
are valued using Level I inputs. See Note
9
,
Related Party Transactions
, for more information.
28
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Financial Assets
|
|||||||||||
|
Three Months Ended September 30, 2024
|
|||||||||||
|
Investments of Consolidated Funds
|
|||||||||||
|
Equity
securities
|
Bonds
|
Loans
|
Investments in
CLOs
|
Other
investments
|
Total
|
||||||
|
Balance, beginning of period
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
|
Deconsolidation of funds
(1)
|
|
(
|
(
|
|
|
(
|
|||||
|
Purchases
|
|
|
|
|
|
|
|||||
|
Sales and distributions
|
(
|
(
|
(
|
(
|
(
|
(
|
|||||
|
Settlements
|
|
|
(
|
|
|
(
|
|||||
|
Realized and unrealized gains (losses), net
|
|||||||||||
|
Included in earnings
|
(
|
|
(
|
(
|
(
|
(
|
|||||
|
Included in other comprehensive income
|
|
|
|
|
|
|
|||||
|
Balance, end of period
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
|
Changes in unrealized gains (losses) included in earnings
related to financial assets still held at the reporting date
|
$
(
|
$
|
$
(
|
$
(
|
$
(
|
$
(
|
|||||
|
Changes in unrealized gains (losses) included in other
comprehensive income related to financial assets still held at
the reporting date
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
|
Financial Assets
|
|||||||||||
|
Nine Months Ended September 30, 2024
|
|||||||||||
|
|
Investments of Consolidated Funds
|
|
|
||||||||
|
|
Equity
securities
|
Bonds
|
Loans
|
Investments in
CLOs
|
Other
investments
|
Total
|
|||||
|
Balance, beginning of period
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
|
Deconsolidation of funds
(1)
|
|
(
|
(
|
|
|
(
|
|||||
|
Purchases
|
|
|
|
|
|
|
|||||
|
Sales and distributions
|
(
|
(
|
(
|
(
|
(
|
(
|
|||||
|
Settlements
|
|
|
(
|
|
|
(
|
|||||
|
Realized and unrealized gains (losses), net
|
|||||||||||
|
Included in earnings
|
(
|
|
|
|
(
|
|
|||||
|
Included in other comprehensive income
|
|
|
|
|
|
|
|||||
|
Balance, end of period
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
|
Changes in unrealized gains (losses) included in earnings
related to financial assets still held at the reporting date
|
$
(
|
$
|
$
|
$
|
$
(
|
$
(
|
|||||
|
Changes in unrealized gains (losses) included in other
comprehensive income related to financial assets still held at
the reporting date
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||
(1)
As
a result of the deconsolidation of
three
funds during each of the
three and nine months ended September 30, 2024
.
29
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Financial Liabilities
|
|||
|
Loans Payable of Consolidated Funds
|
|||
|
Three Months Ended September 30,
|
|||
|
|
2025
|
2024
|
|
|
Balance, beginning of period
|
$
|
$
|
|
|
Initial consolidation/deconsolidation of funds
(1)
|
(
|
(
|
|
|
Borrowings
|
|
|
|
|
Paydowns
|
(
|
(
|
|
|
Sales
|
(
|
|
|
|
Realized and unrealized (gains) losses, net
|
|||
|
Included in earnings
|
(
|
(
|
|
|
Included in other comprehensive income
|
(
|
|
|
|
Balance, end of period
|
$
|
$
|
|
|
Changes in unrealized (gains) losses included in earnings related to
financial liabilities still held at the reporting date
|
$
(
|
$
(
|
|
|
Changes in unrealized (gains) losses included in other comprehensive
income related to financial liabilities still held at the reporting date
|
$
|
$
|
|
|
Financial Liabilities
|
|||
|
Loans Payable of Consolidated Funds
|
|||
|
|
Nine Months Ended September 30,
|
||
|
|
2025
|
2024
|
|
|
Balance, beginning of period
|
$
|
$
|
|
|
Initial consolidation/deconsolidation of funds
(2)
|
(
|
(
|
|
|
Borrowings
|
|
|
|
|
Paydowns
|
(
|
(
|
|
|
Sales
|
(
|
(
|
|
|
Realized and unrealized (gains) losses, net
|
|||
|
Included in earnings
|
(
|
|
|
|
Included in other comprehensive income
|
|
|
|
|
Balance, end of period
|
$
|
$
|
|
|
Changes in unrealized (gains) losses included in earnings related to
financial liabilities still held at the reporting date
|
$
(
|
$
|
|
|
Changes in unrealized (gains) losses included in other comprehensive
income related to financial liabilities still held at the reporting date
|
$
|
$
|
|
(1)
As a result of the initial consolidation of
three
funds and deconsolidation of
one
fund during the
three months ended
September 30, 2025
, and the deconsolidation of
three
funds during the
three months ended September 30, 2024
.
(2) As a result of the initial consolidation of
four
funds and deconsolidation of
two
funds during the
nine months ended
September 30, 2025
, and the deconsolidation of
three
funds during the
nine months ended September 30, 2024
.
Realized and unrealized gains and losses included in earnings for Level III investments for investments in CLOs and
other investments are included in investment income (loss), and such gains and losses for investments of Consolidated Funds
and loans payable of the Consolidated Funds are included in net investment gains (losses) of Consolidated Funds in the
condensed consolidated statements of operations.
Gains and losses included in other comprehensive income for all Level III financial asset and liabilities are included in
accumulated other comprehensive loss and non-controlling interests in consolidated entities.
30
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Fair Value at
|
Valuation Technique(s)
|
Unobservable Input(s)
|
Range
(Weighted Average)
|
Impact to
Valuation
from Increase
in Input
|
|||||
|
(Dollars in millions)
|
September 30,
2025
|
||||||||
|
Assets
|
|||||||||
|
Investments of Consolidated
Funds:
|
|||||||||
|
Equity securities
|
$
|
Consensus Pricing
|
Indicative Quotes ($ per share)
|
|
Higher
|
||||
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
|||||
|
Terminal Growth Rate
|
|
Higher
|
|||||||
|
Comparable Multiple
|
EBITDA Multiple
|
|
Higher
|
||||||
|
TCF Multiple
|
|
Higher
|
|||||||
|
|
Comparable Multiple
|
Market Approach
|
|
Higher
|
|||||
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
|||||
|
Constant Prepayment Rate
|
|
Lower
|
|||||||
|
Constant Default Rate
|
|
Lower
|
|||||||
|
Recovery Rate
|
|
Higher
|
|||||||
|
|
Other
(1)
|
N/A
|
N/A
|
N/A
|
|||||
|
Bonds
|
|
Consensus Pricing
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
Loans
|
|
Consensus Pricing
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
|||||
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
|||||
|
Constant Prepayment Rate
|
|
Lower
|
|||||||
|
Constant Default Rate
|
|
Lower
|
|||||||
|
Recovery Rate
|
|
Higher
|
|||||||
|
|
Other
(1)
|
N/A
|
N/A
|
N/A
|
|||||
|
|
|||||||||
|
Investments in CLOs:
|
|||||||||
|
Senior secured notes
|
|
Consensus Pricing with
Discounted Cash Flow
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
Discount Margins (Basis
Points)
|
|
Lower
|
|||||||
|
Default Rates
|
|
Lower
|
|||||||
|
Recovery Rates
|
|
Higher
|
|||||||
|
Subordinated notes and
preferred shares
|
|
Consensus Pricing with
Discounted Cash Flow
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
Discount Rates
|
(
|
Lower
|
|||||||
|
Default Rates
|
|
Lower
|
|||||||
|
Recovery Rates
|
|
Higher
|
|||||||
|
Other investments:
|
|||||||||
|
Aviation subordinated
notes
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
||||
|
|
Other
(1)
|
N/A
|
N/A
|
N/A
|
|||||
|
Total
|
$
|
||||||||
|
Liabilities
|
|||||||||
|
Loans payable of Consolidated
Funds:
|
|||||||||
|
Senior secured notes
|
$
|
Other
(2)
|
N/A
|
N/A
|
N/A
|
||||
|
Subordinated notes and
preferred shares
|
|
Consensus Pricing with
Discounted Cash Flow
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
Discount Rates
|
|
Lower
|
|||||||
|
Default Rates
|
|
Lower
|
|||||||
|
Recovery Rates
|
|
Higher
|
|||||||
|
Total
|
$
|
31
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
(1)
Fair value approximates transaction price that was in close proximity to the reporting date.
(2)
Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of the CLO financial assets,
less (i) the fair value of any beneficial interests held by the Company and (ii) the carrying value of any beneficial interests that represent
compensation for services.
32
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The following table summarizes quantitative information about the Company’s Level III inputs as of
December 31, 2024
:
|
Fair Value at
|
Valuation Technique(s)
|
Unobservable Input(s)
|
Range
(Weighted Average)
|
Impact to
Valuation
from
Increase in
Input
|
|||||
|
(Dollars in millions)
|
December 31, 2024
|
||||||||
|
Assets
|
|||||||||
|
Investments of Consolidated
Funds:
|
|||||||||
|
Equity securities
|
$
|
Consensus Pricing
|
Indicative Quotes ($ per share)
|
|
Higher
|
||||
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
|||||
|
Terminal Growth Rate
|
|
Higher
|
|||||||
|
Comparable Multiple
|
EBITDA Multiple
|
|
Higher
|
||||||
|
TCF Multiple
|
|
Higher
|
|||||||
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
|||||
|
Constant Prepayment Rate
|
|
Lower
|
|||||||
|
Constant Default Rate
|
|
Lower
|
|||||||
|
Recovery Rate
|
|
Higher
|
|||||||
|
|
Other
(1)
|
N/A
|
N/A
|
N/A
|
|||||
|
Bonds
|
|
Consensus Pricing
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
Loans
|
|
Consensus Pricing
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
|||||
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
|||||
|
Constant Prepayment Rate
|
|
Lower
|
|||||||
|
Constant Default Rate
|
|
Lower
|
|||||||
|
Recovery Rate
|
|
Higher
|
|||||||
|
Other
|
|
Other
(1)
|
N/A
|
N/A
|
N/A
|
||||
|
|
|||||||||
|
Investments in CLOs
|
|||||||||
|
Senior secured notes
|
|
Discounted Cash Flow
with Consensus Pricing
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
Discount Margins (Basis
Points)
|
|
Lower
|
|||||||
|
Default Rates
|
|
Lower
|
|||||||
|
Recovery Rates
|
|
Higher
|
|||||||
|
Subordinated notes and
preferred shares
|
|
Discounted Cash Flow
with Consensus Pricing
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
Discount Rate
|
|
Lower
|
|||||||
|
Default Rates
|
|
Lower
|
|||||||
|
Recovery Rates
|
|
Higher
|
|||||||
|
Other investments:
|
|||||||||
|
BDC preferred shares
|
|
Other
(2)
|
Net Asset Value per Share
|
|
Lower
|
||||
|
Aviation subordinated
notes
|
|
Discounted Cash Flow
|
Discount Rates
|
|
Lower
|
||||
|
Loans
|
|
Consensus Pricing
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
Total
|
$
|
||||||||
|
Liabilities
|
|||||||||
|
Loans payable of Consolidated
Funds:
|
|||||||||
|
Senior secured notes
|
$
|
Other
(3)
|
N/A
|
N/A
|
N/A
|
||||
|
Subordinated notes and
preferred shares
|
|
Discounted Cash Flow
with Consensus Pricing
|
Indicative Quotes (% of Par)
|
|
Higher
|
||||
|
Discount Rates
|
|
Lower
|
|||||||
|
Default Rates
|
|
Lower
|
|||||||
|
Recovery Rates
|
|
Higher
|
|||||||
|
Total
|
$
|
(1)
Fair value approximates transaction price that was in close proximity to the reporting date.
(2)
See Note
9
,
Related Party Transactions
, for more information.
33
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
(3)
Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of the CLO financial assets,
less (i) the fair value of any beneficial interests held by the Company and (ii) the carrying value of any beneficial interests that represent
compensation for services.
|
|
As of
|
||
|
|
September 30,
2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Accrued performance allocations
|
$
|
$
|
|
|
Principal equity method investments, excluding performance allocations
|
|
|
|
|
Principal investments in CLOs
|
|
|
|
|
Other investments
|
|
|
|
|
Total
|
$
|
$
|
|
|
|
As of
|
||
|
|
September 30,
2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Global Private Equity
|
$
|
$
|
|
|
Global Credit
|
|
|
|
|
Carlyle AlpInvest
|
|
|
|
|
Total
|
$
|
$
|
|
Approximately
17
%
and
20
%
of accrued performance allocations at
September 30, 2025
and
December 31, 2024
,
respectively, was related to Carlyle Partners VII, L.P., one of the Company’s Global Private Equity funds.
Accrued performance allocations are shown gross of the Company’s accrued performance allocations and incentive fee
related compensation (see Note
7
,
Accrued Compensation and Benefits
), and accrued giveback obligations, which are
separately presented in the condensed consolidated balance sheets.
The components of the accrued giveback obligations are as
follows:
|
|
As of
|
||
|
|
September 30,
2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Global Private Equity
|
$
(
|
$
(
|
|
|
Global Credit
|
(
|
(
|
|
|
Total
|
$
(
|
$
(
|
|
The Company’s principal equity method investments (excluding performance allocations) include its fund investments in
Global Private Equity, Global Credit, and Carlyle AlpInvest typically as general partner interests, and its investments in
Fortitude through a Carlyle-affiliated fund (included within Global Credit) and NGP (included within Global Private Equity),
which are not consolidated.
Principal investments are related to the following segments:
34
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
|
As of
|
||
|
|
September 30,
2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Global Private Equity
(1)
|
$
|
$
|
|
|
Global Credit
(2)
|
|
|
|
|
Carlyle AlpInvest
|
|
|
|
|
Total
|
$
|
$
|
|
(1)
The balance includes
$
642.2
million
and
$
912.0
million
as of
September 30, 2025
and
December 31, 2024
, respectively, related to
the Company’s equity method investments in NGP.
(2)
The balance includes
$
739.5
million
and
$
723.5
million
as of
September 30, 2025
and
December 31, 2024
, respectively, related to
the Company’s investment in Fortitude.
Investment in Fortitude
In November 2018, the Company acquired a
19.9
%
interest in Fortitude Group Holdings, LLC (“Fortitude Holdings”), a
wholly owned subsidiary of American International Group, Inc. (“AIG”). Fortitude Holdings owns
100
%
of the outstanding
common shares of Fortitude Reinsurance Company Ltd., a Bermuda domiciled reinsurer (“Fortitude Re”). The Company paid
$
381
million
in cash at closing and paid
$
95
million
in additional deferred consideration in 2024. In May 2020, the initial
purchase price was adjusted upward by
$
99.5
million
in accordance with the purchase agreement as Fortitude Holdings chose
not to distribute a planned non-pro rata dividend to AIG, of which the Company paid
$
79.6
million
in May 2020. The
remaining
$
19.9
million
was paid in 2024.
In June 2020, Carlyle FRL, L.P. (“Carlyle FRL”), a Carlyle-affiliated investment fund, and T&D United Capital Co., Ltd.
(“T&D”), a strategic third-party investor, acquired a
51.6
%
ownership interest and
25.0
%
ownership interest, respectively, in
Fortitude Holdings from AIG. At closing, the Company contributed its existing
19.9
%
interest in Fortitude Holdings to Carlyle
FRL, such that Carlyle FRL held a
71.5
%
interest in Fortitude Holdings. Taken together, Carlyle FRL and T&D had
96.5
%
ownership of Fortitude Holdings. In October 2021, Carlyle FRL, T&D and an affiliate of AIG contributed the entirety of their
interest in Fortitude Holdings to FGH Parent, L.P. (“FGH Parent”), a newly-formed entity interposed as the direct parent of
Fortitude Holdings, in exchange for an equivalent ownership interest in FGH Parent. References to “Fortitude” prior to this
restructuring refer to Fortitude Holdings and refer to FGH Parent for subsequent periods.
In March 2022, the Company raised
$
2.0
billion
in third-party equity capital from certain investors in Carlyle FRL and
T&D, and committed
$
100
million
from the Company for additional equity capital in Fortitude. Upon Fortitude calling the
remaining commitments from the capital raise in May 2023, the Company’s indirect ownership of Fortitude decreased to
Parent held indirectly through the fund, reducing Carlyle FRL’s ownership in FGH Parent to
38.5
%
. Following the additional
capital contributions in 2022 and 2023, Carlyle FRL and its strategic third-party investors collectively hold a
97.5
%
interest in
FGH Parent.
In
November 2024, Fortitude declared and paid a
$
200.0
million
dividend, of which Carlyle FRL’s share was
$
76.9
million
. The Company received a distribution from Carlyle FRL of
$
21.0
million
related to this dividend, of which
$
7.9
million
was recognized as realized principal investment income, and the balance as return of capital. In September 2025,
Fortitude declared and paid a
$
300.0
million
dividend,
$
31.4
million
of which was distributed to the Company from Carlyle
FRL and recognized as realized principal investment income on the condensed consolidated statements of operations for the
three and nine months ended September 30, 2025. As of
September 30, 2025
, the carrying value of the Company’s investment
in Carlyle FRL, which is an investment company that accounts for its investment in Fortitude at fair value, was
$
739.5
million
,
relative to equity invested of
$
666.8
million
.
The Company has an asset management relationship with Fortitude pursuant to which Fortitude committed to allocate
assets in asset management strategies and vehicles of the Company and its affiliates. As of
September 30, 2025
, Fortitude, its
affiliates and certain Fortitude reinsurance counterparties have committed approximately
$
23.3
billion
of capital to-date to
various Carlyle strategies. On April 1, 2022, the Company entered into a strategic advisory services agreement with certain
subsidiaries of Fortitude through Carlyle Insurance Solutions Management L.L.C. (“CISM”), an investment adviser. Under the
agreement, CISM provides Fortitude with certain services, including business development and growth, transaction origination
35
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
and execution, and capital management services in exchange for a recurring management fee based on Fortitude’s general
account assets, which adjusts within an agreed range based on Fortitude’s overall profitability. Third-party investors who
participated in the March 2022 capital raise also made a minority investment in CISM, which is reflected as non-controlling
interest in consolidated entities in the condensed consolidated financial statements.
Investment in NGP
The Company has equity interests in NGP Management Company, L.L.C. (“NGP Management”), the general partners of
certain carry funds advised by NGP, and principal investments in certain NGP funds as described below. These investments are
included in the Global Private Equity segment. NGP Management serves as the investment advisor to the NGP Energy Funds.
The Company does not control NGP and accounts for its investments in NGP under the equity method of accounting.
|
As of
|
|||
|
September 30,
2025
|
December 31,
2024
|
||
|
(Dollars in millions)
|
|||
|
Investment in NGP Management
|
$
|
$
|
|
|
Investments in NGP general partners - accrued performance allocations
|
|
|
|
|
Principal investments in NGP funds
|
|
|
|
|
Total investments in NGP
|
$
|
$
|
|
NGP Restructuring
.
On March 31, 2025, the Company restructured the terms of its strategic investment in NGP (the
“Restructuring”) to further align the interests of the Company and NGP. The Restructuring eliminated previous restrictions on
the Company’s ability to pursue domestic energy strategies, established a new capital markets fees arrangement with NGP, and
terminated the Company’s obligation to grant up to
$
10
million
of its common shares to NGP annually following a final grant
made with respect to 2030. Additionally, in order to facilitate the development of future funds while substantially maintaining
the Company’s economics on existing funds, the Restructuring reduced the Company’s allocation of the management fee
related revenues of NGP Management related to future funds, as well as its share of the performance allocations received by
current and future NGP fund general partners, as discussed further below.
Prior to the Restructuring, the Company’s equity interests in NGP Management entitled the Company to an allocation of
income equal to
55.0
%
of the management fee related revenues earned by NGP Management. Subsequent to the Restructuring,
for all funds that held an initial closing after December 31, 2024, the Company’s allocations of income for the management fee
related revenues will be based on a sliding scale of the total annual management fee related revenues accrued from all such
funds in the aggregate up to
55.0
%
, including all management fees being retained by NGP for the years 2025 through 2028 on
such future NGP funds. The Company identified the reduction of its allocation of the management fee related revenues of NGP
Management as an indicator of impairment and performed an impairment analysis. As a result of the Restructuring, the
Company concluded that the carrying value of its investment in NGP Management was impaired and recorded an impairment
charge of
$
92.5
million
during the first quarter of 2025, representing the difference in the carrying value of the investment of
$
352.5
million
and its fair value of
$
260.0
million
at the time of Restructuring. The Company utilized a discounted cash flow
method for determining the fair value of its equity method investment, which is a Level III valuation within the fair value
hierarchy and utilizes significant unobservable assumptions, including discount rates and long-term growth rates. The allocation
of management fee related revenues for existing NGP funds remains unchanged, including the Company’s interest in
management fees from NGP XI, NGP XII, and NGP XIII.
The impairment charge created new basis differences with an estimated fair value of
$
165
million
within the equity
method investment. These basis differences will be amortized over an estimated useful life ranging from
five
to
seven years
as a
reduction of principal investment income.
The Company’s investment in the general partners of the NGP Carry Funds entitled it to
47.5
%
(
38.0
%
to
42.75
%
in the
case of certain funds) of the performance allocations received by certain current and future NGP fund general partners prior to
the Restructuring. In connection with the Restructuring, the Company’s allocation of the performance allocations from existing
NGP Carry Funds was reduced to a range of
35.1
%
to
43.8
%
, which resulted in a
$
38
million
reduction in accrued performance
36
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
allocations during the first quarter of 2025. The Company’s interest in the performance allocations from future NGP Carry
Funds will be based on a sliding scale of the fee paying capital raised in each future NGP Carry Fund, up to
47.5
%
of the
performance allocations received by future NGP Carry Funds.
The impairment charge related to the investment in NGP Management and the reduction in accrued performance
allocations from NGP Carry Funds are recorded in Principal investment income (loss) in the condensed consolidated statements
of operations and excluded from Distributable Earnings, as defined in Note
15
,
Segment Reporting
.
Investment in NGP Management
. As referenced above, the Company’s equity interests in NGP Management entitle the
Company to an allocation of income equal to
55.0
%
of the management fee related revenues earned by existing funds, and up to
for the years 2025 through 2028 on such future NGP funds. The Company records investment income (loss) for its equity
income allocation from NGP management fee related revenues and also records its share of any allocated expenses from NGP
Management, as well as expenses associated with the compensatory elements of the investment and any impairment charges.
and nine months ended September 30, 2025
and
2024
were as follows:
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Management fee related revenues from NGP Management
|
$
|
$
|
$
|
$
|
|||
|
Expenses related to the investment in NGP Management
|
(
|
(
|
(
|
(
|
|||
|
Amortization of basis differences and impairment of investment in NGP
Management
|
(
|
|
(
|
|
|||
|
Net investment income from NGP Management
|
$
|
$
|
$
(
|
$
|
|||
Management fee related revenues from NGP Management were primarily driven by NGP XI, NGP XII, and NGP XIII
during the
three and nine months ended September 30, 2025
and
2024
. These funds calculate management fees as
1.5
%
of the
limited partners’ commitments less any return of capital or write-offs during the investment period. Following the investment
period, the basis on which fund management fees are generally calculated is further reduced by a reserve for future management
fees and operating costs.
Investment in the General Partners of NGP Carry Funds
. As referenced above, the Company’s investment in the general
partners of the NGP Carry Funds entitle it to up to
47.5
%
of the performance allocations received by NGP fund general
partners. The Company records its equity income allocation from NGP performance allocations in principal investment income
(loss) from equity method investments rather than performance allocations in its condensed consolidated statements of
operations. The Company recognized net investment earnings (losses) related to these performance allocations of
$
23.8
million
and
$
14.9
million
for the
three months ended September 30, 2025 and 2024
, respectively, and
$
22.9
million
and
$
33.2
million
for the
nine months ended September 30, 2025 and 2024
, respectively, in its condensed consolidated statements of operations.
The
nine months ended September 30, 2025
included the
$
38.0
million
reduction related to the Restructuring.
Principal Investments in NGP Funds
. The Company also holds principal investments in the NGP Carry Funds. The
Company recognized net investment earnings (losses) related to principal investment income (loss) in its condensed
consolidated statements of operations of
$
3.3
million
and
$
2.5
million
for the
three months ended September 30, 2025 and
2024
, respectively, and
$
8.8
million
and
$
5.2
million
for the
nine months ended September 30, 2025 and 2024
, respectively.
37
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Principal Investments in CLOs and Other Investments
Principal investments in CLOs as of
September 30, 2025
and
December 31, 2024
were
$
380.7
million
and
$
378.9
million
, respectively, and consisted of investments in CLO senior and subordinated notes. A portion of the Company’s principal
investments in CLOs is collateral to CLO term loans (see Note
6
,
Borrowings
). As of
September 30, 2025
other investments
include the Company’s investment in common shares of CGBD at fair value of
$
37.6
million
. As of
December 31, 2024
, other
investments include the Company’s investment in preferred shares of CGBD (the “BDC Preferred Shares”) at fair value of
$
53.4
million
, which were exchanged for common shares effective March 27, 2025 (see Note
9
,
Related Party Transactions
).
Investment Income (Loss)
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Performance allocations
|
|||||||
|
Realized
|
$
|
$
|
$
|
$
|
|||
|
Unrealized
|
(
|
|
(
|
|
|||
|
(
|
|
|
|
||||
|
Principal investment income (loss) from equity method investments
(excluding performance allocations)
|
|||||||
|
Realized
|
|
|
|
|
|||
|
Unrealized
|
|
|
(
|
|
|||
|
|
|
|
|
||||
|
Principal investment income (loss) from investments in CLOs and other
investments
|
|||||||
|
Realized
|
|
(
|
|
|
|||
|
Unrealized
(1)
|
|
(
|
|
(
|
|||
|
|
(
|
|
|
||||
|
Total
|
$
(
|
$
|
$
|
$
|
|||
(1)
The
three and nine months ended September 30, 2024
each included the reversal of
$
48.5
million
of previously recorded unrealized
investment income on the BDC Preferred Shares (see Note
9
,
Related Party Transactions
for more information). The
nine months
ended September 30, 2024
included investment gain of
$
5.3
million
associated with the remeasurement of corporate investments,
resulting from observable price changes pursuant to ASC 321,
Investments–Equity Securities
.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Global Private Equity
|
$
(
|
$
|
$
(
|
$
|
|||
|
Global Credit
|
|
|
|
|
|||
|
Carlyle AlpInvest
|
|
|
|
|
|||
|
Total
|
$
(
|
$
|
$
|
$
|
|||
months ended September 30, 2025
and
2024
,
as well as the total revenue recognized, including performance allocations as well
as fund management fees and principal investment income:
38
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Three Months Ended September 30, 2025
|
Nine Months Ended September 30, 2025
|
|||||
|
(Dollars in millions)
|
(Dollars in millions)
|
|||||
|
Global Private Equity
|
Carlyle Asia Partners V, L.P.
|
$
(
|
Global Private Equity
|
Carlyle Partners VII, L.P.
|
$
(
|
|
|
Global Private Equity
|
Carlyle Partners VII, L.P.
|
(
|
Global Private Equity
|
Carlyle Asia Partners V, L.P.
|
(
|
|
|
Three Months Ended September 30, 2024
|
Nine Months Ended September 30, 2024
|
|||||
|
(Dollars in millions)
|
(Dollars in millions)
|
|||||
|
Global Private Equity
|
Carlyle Partners VII, L.P.
|
$
|
Global Private Equity
|
Carlyle Partners VII, L.P.
|
$
|
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Global Private Equity
|
$
|
$
|
$
(
|
$
|
|||
|
Global Credit
|
|
|
|
|
|||
|
Carlyle AlpInvest
|
|
|
|
|
|||
|
Total
|
$
|
$
|
$
|
$
|
|||
Principal investment income for Global Private Equity for the
nine months ended September 30, 2025
included the
impairment charge related to the investment in NGP Management of
$
92.5
million
and the reduction in accrued performance
allocations from NGP Carry Funds of
$
38.0
million
related to the Restructuring. Principal investment income for Global Private
Equity for the
three and nine months ended September 30, 2024
included the Company’s equity income allocation from NGP
performance allocations of
$
14.9
million
and
$
33.2
million
, respectively.
Investments of Consolidated Funds
The Company consolidates the financial positions and results of operations of certain CLOs in which it is the primary
beneficiary. During the
nine months ended September 30, 2025
, the Company became the primary beneficiary of
four
additional CLOs. Investments in Consolidated Funds as of
September 30, 2025
and
December 31, 2024
also included
$
845.3
million
and
$
441.9
million
, respectively, related to investments that have been bridged by the Company to investment
funds and are accounted for as consolidated VIEs.
There were no individual investments with a fair value greater than
five
percent of the Company’s total assets for any
period presented.
39
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Interest and Other Income of Consolidated Funds
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Interest income from investments
|
$
|
$
|
$
|
$
|
|||
|
Other income
|
|
|
|
|
|||
|
Total
|
$
|
$
|
$
|
$
|
|||
Net Investment Income (Loss) of Consolidated Funds
Net investment income (loss) of Consolidated Funds
includes net realized gains (losses) from sales of investments and
unrealized gains (losses) resulting from changes in fair value of the Consolidated Funds’ investments.
The components of
Net
investment income (loss) of Consolidated Funds
are as follows:
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Gains (losses) from investments of Consolidated Funds
|
$
|
$
(
|
$
|
$
|
|||
|
Gains (losses) from liabilities of CLOs
|
|
|
|
(
|
|||
|
Total
|
$
|
$
|
$
|
$
(
|
|||
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Realized gains (losses)
|
$
|
$
(
|
$
|
$
(
|
|||
|
Net change in unrealized gains (losses)
|
|
(
|
|
|
|||
|
Total
|
$
|
$
(
|
$
|
$
|
|||
2024
:
|
As of
|
|||
|
September 30,
2025
|
December 31,
2024
|
||
|
(Dollars in millions)
|
|||
|
Acquired contractual rights
|
$
|
$
|
|
|
Accumulated amortization
|
(
|
(
|
|
|
Finite-lived intangible assets, net
|
|
|
|
|
Goodwill
|
|
|
|
|
Intangible Assets, net
|
$
|
$
|
|
As discussed in Note
2
,
Summary of Significant Accounting Policies
, the Company reviews its intangible assets for
impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable,
40
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
and considers factors including, but not limited to, expected cash flows from its interest in future management fees and the
ability to raise new funds.
The Company recorded
no
impairment losses of intangible assets for the periods presented
.
Intangible asset amortization expense was
$
32.8
million
and
$
32.7
million
for the
three months ended September 30,
2025 and 2024
, respectively, and
$
98.2
million
and
$
98.0
million
for the
nine months ended September 30, 2025 and 2024
,
respectively, and is included in general, administrative, and other expenses in the condensed consolidated statements of
operations
.
Certain intangible assets are held by entities of which the functional currency is not the U.S. dollar. Any
corresponding currency translation is recorded in accumulated other comprehensive income (loss).
millions):
|
Year ending December 31,
|
|
|
2025 (excluding the nine months ended September 30, 2025)
|
$
|
|
2026
|
|
|
2027
|
|
|
2028
|
|
|
2029
|
|
|
Thereafter
|
|
|
$
|
Th
e Company borrows and enters into credit agreements for its general operating and investment purposes.
The
Company’s debt obligations consist of the following:
|
|
September 30, 2025
|
December 31, 2024
|
|||||
|
|
Borrowing
Outstanding
|
Carrying
Value
|
Borrowing
Outstanding
|
Carrying
Value
|
|||
|
(Dollars in millions)
|
|||||||
|
CLO Borrowings
(See below)
|
$
|
$
|
$
|
$
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
Total debt obligations
|
$
|
$
|
$
|
$
|
|||
Senior Credit Facility
As of
September 30, 2025
, the senior credit facility included
$
1.0
billion
in a revolving credit facility, which was
amended in May 2025 to extend the maturity date from
April 29, 2027
to
May 29, 2030
. The Company’s borrowing capacity is
subject to the ability of the financial institutions in the banking syndicate to fulfill their respective obligations under the
revolving credit facility. Principal amounts outstanding under the revolving credit facility accrue interest, at the option of the
borrowers, either (a) at an alternate base rate plus an applicable margin not to exceed
0.50
%
per annum, or (b) at SOFR (or
similar benchmark rate for non-U.S. dollar borrowings) plus a
0.10
%
adjustment and an applicable margin not to exceed
1.50
%
per annum (at
September 30, 2025
, the interest rate was
5.23
%
). The Company made
no
borrowings under the revolving credit
facility during the
three and nine months ended September 30, 2025
and
2024
, and there was
no
amount outstanding as of
September 30, 2025
.
41
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Global Credit Revolving Credit Facility
Certain subsidiaries of the Company are parties to a revolving line of credit, primarily intended to support certain lending
activities within the Global Credit segment. As currently amended, the Global Credit Revolving Credit Facility provides for a
revolving line of credit with a capacity of
$
300
million
, which matures in
September 2027
, and a second revolving line of credit
with a capacity of
$
200
million
, which the Company amended in August 2025 to extend the maturity date to
August 19, 2026
.
The Company’s borrowing capacity is subject to the ability of the financial institutions in the banking syndicate to fulfill their
respective obligations under the Global Credit Revolving Credit Facility. Principal amounts outstanding accrue interest at
applicable SOFR or Eurocurrency rates plus an applicable margin of
2.00
%
or an alternate base rate plus an applicable margin
of
1.00
%
. During the
three and nine months ended September 30, 2025
, the Company made
no
borrowings under the Global
Credit Revolving Credit Facility. During the
three months ended September 30, 2024
, the Company made
no
borrowings under
the Global Credit Revolving Credit Facility. During the
nine months ended September 30, 2024
, the Company made
borrowings under the Global Credit Revolving Credit Facility of
$
5.0
million
and
€
5.0
million
, which were repaid
during the
period
. As of
September 30, 2025
, there was
no
borrowing outstanding under the Global Credit Revolving Credit Facility.
CLO Borrowings
For certain of the Company’s CLOs, the Company finances a portion of its investment in the CLOs through the proceeds
received from term loans and other financing arrangements with financial institutions.
The Company’s outstanding CLO
borrowings consist of the following (Dollars in millions):
|
Formation Date
|
Borrowing
Outstanding
September 30,
2025
|
Borrowing
Outstanding
December 31, 2024
|
Maturity Date (1)
|
Interest Rate as of
September 30, 2025
|
|||||||
|
February 28, 2017
|
$
|
$
|
September 21, 2029
|
|
(2)
|
||||||
|
December 6, 2017
|
|
|
N/A
|
N/A
|
(5)
|
||||||
|
March 15, 2019
|
|
|
March 15, 2032
|
|
(3)
|
||||||
|
August 20, 2019
|
|
|
August 15, 2032
|
|
(3)
|
||||||
|
September 15, 2020
|
|
|
April 15, 2033
|
|
(3)
|
||||||
|
January 8, 2021
|
|
|
January 15, 2034
|
|
(3)
|
||||||
|
March 30, 2021
|
|
|
March 15, 2032
|
|
(3)
|
||||||
|
April 21, 2021
|
|
|
April 15, 2033
|
|
(3)
|
||||||
|
May 21, 2021
|
|
|
November 17, 2031
|
|
(3)
|
||||||
|
June 4, 2021
|
|
|
January 16, 2034
|
|
(3)
|
||||||
|
June 10, 2021
|
|
|
November 17, 2031
|
|
(3)
|
||||||
|
July 15, 2021
|
|
|
July 15, 2034
|
|
(3)
|
||||||
|
July 20, 2021
|
|
|
July 20, 2034
|
|
(3)
|
||||||
|
August 4, 2021
|
|
|
August 15, 2032
|
|
(3)
|
||||||
|
October 27, 2021
|
|
|
October 15, 2035
|
|
(3)
|
||||||
|
January 6, 2022
|
|
|
February 15, 2035
|
|
(3)
|
||||||
|
February 22, 2022
|
|
|
November 10, 2035
|
|
(3)
|
||||||
|
September 5, 2023
|
|
|
N/A
|
N/A
|
(5)
|
||||||
|
April 25, 2024
|
|
|
April 25, 2037
|
|
(3)
|
||||||
|
December 19, 2024
|
|
|
January 15, 2039
|
|
(3)
|
||||||
|
March 10, 2025
|
|
|
April 15, 2038
|
|
(3)
|
||||||
|
July 10, 2025
|
|
|
August 15, 2038
|
|
(4)
|
||||||
|
August 19, 2025
|
|
|
October 15, 2038
|
|
(4)
|
||||||
|
$
|
$
|
(1)
Maturity date is earlier of date indicated or the date that the CLO is dissolved.
(2)
Incurs interest at EURIBOR plus applicable margins as defined in the agreement.
(3)
Incurs interest at the average effective interest rate of each class of purchased securities plus
0.50
%
spread percentage.
(4)
Incurs interest at the average effective interest rate of each class of purchased securities plus
0.55
%
spread percentage.
(5)
Term loan was fully repaid during the
nine months ended September 30, 2025
.
42
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The CLO term loans are secured by the Company’s investments in the respective CLO, have a general unsecured interest
in the Carlyle entity that manages the CLO, and generally do not have recourse to any other Carlyle entity. Interest expense for
the
three months ended September 30, 2025 and 2024
was
$
3.7
million
and
$
6.2
million
, respectively. Interest expense for the
nine months ended September 30, 2025 and 2024
was
$
11.5
million
and
$
19.2
million
, respectively. The fair value of the
outstanding balance of the CLO term loans at
September 30, 2025
approximated par value based on current market rates for
similar debt instruments. These CLO term loans are classified as Level III within the fair value hierarchy.
European CLO Financing
–
February 28, 2017
A subsidiary of the Company is a party to a financing agreement with several financial institutions. As of
September 30,
2025
, the financing agreement provided the Company with a term loan of
€
11.4
million
(
$
13.4
million
at
September 30, 2025
).
This term loan is secured by the Company’s investments in the retained notes in certain European CLOs that were formed in
2014 and 2015. This term loan will mature on the earlier of September 21, 2029 or the date that the certain European CLO
retained notes have been redeemed. The Company may prepay the term loan in whole or in part at any time. Interest on this
term loan accrues at EURIBOR plus applicable margins (
4.56
%
at
September 30, 2025
).
Master Credit Agreement – Term Loans
The Company assumed liabilities under master credit agreements previously entered into by CBAM under which a
financial institution provided term loans to CBAM for the purchase of eligible interests in CLOs. Term loans issued under these
master credit agreements are secured by the Company’s investment in the respective CLO as well as any senior management
fee and subordinated management fee payable by each CLO. Term loans generally bear interest at SOFR plus a weighted
average spread over SOFR on the CLO notes, which is due quarterly. As of
September 30, 2025
, all outstanding CLO term
loans under this agreement have been repaid.
CLO Repurchase Agreements
On February 5, 2019, the Company entered into a master credit facility agreement (the “Carlyle CLO Financing Facility”)
to finance a portion of the risk retention investments in certain European CLOs managed by the Company. Each transaction
entered into under the Carlyle CLO Financing Facility will bear interest at a rate based on the weighted average effective
interest rate of each class of securities that have been sold plus a spread to be agreed upon by the parties. As of
September 30,
2025
,
€
214.1
million
(
$
251.5
million
) was outstanding under the Carlyle CLO Financing Facility. Additional borrowings may
be made on terms agreed upon by the Company and the counterparty subject to the terms and conditions of the Carlyle CLO
Financing Facility.
Each transaction entered into under the CLO Financing Facility provides for payment netting and, in the case of a default
or similar event with respect to the counterparty to the CLO Financing Facility, provides for netting across transactions.
Generally, upon a counterparty default, the Company can terminate all transactions under the CLO Financing Facility and offset
amounts it owes in respect of any one transaction against collateral, if any, or other amounts it has received in respect of any
other transactions under the CLO Financing Facility; provided, however, that in the case of certain defaults, the Company may
only be able to terminate and offset solely with respect to the transaction affected by the default. During the term of a
transaction entered into under the CLO Financing Facility, the Company will deliver cash or additional securities acceptable to
the counterparty if the securities sold are in default. Upon termination of a transaction, the Company will repurchase the
previously sold securities from the counterparty at a previously determined repurchase price. The CLO Financing Facility may
be terminated at any time upon certain defaults or circumstances agreed upon by the parties.
The Repurchase Agreements may result in credit exposure in the event the counterparty to the transaction is unable to
fulfill its contractual obligations. The Company minimizes the credit risk associated with these activities by monitoring
counterparty credit exposure and collateral values. Other than margin requirements, the Company is not subject to additional
terms or contingencies which would expose the Company to additional obligations based upon the performance of the securities
pledged as collateral.
The Company assumed liabilities under a master credit facility agreement previously entered into by CBAM (the
“CBAM CLO Financing Facility,” together with the Carlyle CLO Financing Facility, the “CLO Financing Facilities”) to
finance a portion of the risk retention investments in certain European CLOs managed by CBAM. The maximum facility
amount is
€
100.0
million
, but may be expanded on such terms agreed upon by the Company and the counterparty subject to the
43
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
terms and conditions of the CBAM CLO Financing Facility. Each transaction entered into under the CBAM CLO Financing
Facility will bear interest at a rate based on the weighted average effective interest rate of each class of securities that have been
sold plus a spread to be agreed upon by the parties. As of
September 30, 2025
,
€
63.4
million
(
$
74.4
million
) was outstanding
under the CBAM CLO Financing Facility.
Senior Notes
The Company and c
ertain indirect subsidiaries of the Company have issued long term borrowings
in the form of senior
notes, on which interest is payable semi-annually in arrears.
The following table provides information regarding these senior
notes (Dollars in millions):
|
Interest Expense
|
|||||||||||||
|
Fair Value
(1)
As of
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||
|
Aggregate
Principal
Amount
|
September
30, 2025
|
December
31, 2024
|
2025
|
2024
|
2025
|
2024
|
|||||||
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
$
|
$
|
$
|
$
|
||||||||||
(1)
Including accrued interest. Fair value is based on indicative quotes and the notes are classified as Level II within the fair
value hierarchy.
(2)
Issued in September 2019 at
99.841
%
of par.
(3)
Issued in September 2025 at
99.767
%
of par.
(4)
Issued
$
400.0
million
in aggregate principal at
99.583
%
of par in March 2013. An additional
$
200.0
million
in aggregate
principal was issued at
104.315
%
of par in March 2014, and is treated as a single class with the outstanding
$
400.0
million
in senior notes previously issued.
The issuers may redeem the senior notes, in whole at any time or in part from time to time, at a price equal to the greater
of (i)
100
%
of the principal amount of the notes being redeemed and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest on any notes being redeemed (less interest accrued to the date of redemption)
discounted to the redemption date on a semiannual basis at the Treasury Rate plus
40
basis points (
30
basis points in the case of
the
3.500
%
senior notes and
20
basis points in the case of the
5.050
%
senior notes), plus in each case accrued and unpaid
interest on the principal amounts being redeemed.
44
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Subordinated Notes
In May 2021, an indirect subsidiary of the Company issued
$
435.0
million
aggregate principal amount of
4.625
%
Subordinated Notes due May 15, 2061 (the “Subordinated Notes”), on which interest is payable quarterly accruing from May
11, 2021. In June 2021, an additional
$
65.0
million
aggregate principal amount of these Subordinated Notes were issued and
are treated as a single series with the already outstanding
$
435.0
million
aggregate principal amount. The Subordinated Notes
are unsecured and subordinated obligations of the issuer, and are fully and unconditionally guaranteed (the “Guarantees”),
jointly and severally, on a subordinated basis, by the Company, each of the Carlyle Holdings partnerships, and CG Subsidiary
Holdings L.L.C., an indirect subsidiary of the Company (collectively, the “Guarantors”). The Consolidated Funds are not
guarantors, and as such, the assets of the Consolidated Funds are not available to service the Subordinated Notes under the
Guarantee. The Subordinated Notes may be redeemed at the issuer’s option, in whole or in part, at any time and from time to
time on or after June 15, 2026, prior to their stated maturity, at a redemption price equal to their principal amount plus any
accrued and unpaid interest to, but excluding, the date of redemption. If interest due on the Subordinated Notes is deemed to no
longer be deductible in the U.S., a “Tax Redemption Event,” the Subordinated Notes may be redeemed, in whole, but not in
part, within
120
days
of the occurrence of such event at a redemption price equal to their principal amount plus accrued and
unpaid interest to, but excluding, the date of redemption. In addition, the Subordinated Notes may be redeemed, in whole, but
not in part, at any time prior to May 15, 2026, within
90
days
of the rating agencies determining that the Subordinated Notes
should no longer receive partial equity treatment pursuant to the rating agency’s criteria, a “rating agency event,” at a
redemption price equal to
102
%
of their principal amount plus any accrued and unpaid interest to, but excluding, the date of
redemption.
As of
September 30, 2025
and
December 31, 2024
, the fair value of the Subordinated Notes was
$
359.6
million
and
$
356.4
million
, respectively. Fair value is based on active market quotes and the notes are classified as Level I within the fair
value hierarchy.
For both the
three months ended September 30, 2025 and 2024
, the Company incurred
$
5.8
million
of interest
expense on the Subordinated Notes. For both the
nine months ended September 30, 2025 and 2024
, the Company incurred
$
17.6
million
of interest expense on the Subordinated Notes.
Debt Covenants
The Company is subject to various financial covenants under its loan agreements including, among other items,
maintenance of a minimum amount of management fee-earning assets. The Company is also subject to various non-financial
covenants under its loan agreements and the indentures governing its senior notes. The Company was in compliance with all
financial and non-financial covenants under its various loan agreements as of
September 30, 2025
.
Loans payable of Consolidated Funds primarily represent amounts due to holders of debt securities issued by the CLOs.
45
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
|
As of September 30, 2025
|
||||||||
|
|
Borrowing
Outstanding
|
Fair Value
|
Weighted
Average
Interest Rate
|
|
Weighted
Average
Remaining
Maturity in
Years
|
||||
|
Senior secured notes
(1)
|
$
|
$
|
|
|
|||||
|
Subordinated notes
|
|
|
N/A
|
(3)
|
|
||||
|
Revolving credit facilities
(2)
|
|
|
|
|
|||||
|
Total
|
$
|
$
|
|||||||
|
|
As of December 31, 2024
|
||||||||
|
|
Borrowing
Outstanding
|
Fair Value
|
Weighted
Average
Interest Rate
|
|
Weighted
Average
Remaining
Maturity in
Years
|
||||
|
Senior secured notes
|
$
|
$
|
|
|
|||||
|
Subordinated notes
|
|
|
N/A
|
(3)
|
|
||||
|
Revolving credit facilities
(2)
|
|
|
|
|
|||||
|
Total
|
$
|
$
|
|||||||
(1)
Borrowing Outstanding as of
September 30, 2025
includes
$
928.9
million
of senior secured notes that are measured at amortized
cost, which approximates fair value. These senior secured notes are classified as Level III within the fair value hierarchy.
(2)
Fair Value as of
September 30, 2025
and
December 31, 2024
reflects the amortized cost of outstanding revolving credit balances
which approximates fair value.
(3)
The subordinated notes do not have contractual interest rates, but instead receive distributions from the excess cash flows of the
CLOs.
Loans payable of the CLOs are collateralized by the assets held by the CLOs and the assets of one CLO may not be used
to satisfy the liabilities of another. This collateral consisted of cash and cash equivalents, corporate loans, corporate bonds and
other securities. As of
September 30, 2025
and
December 31, 2024
, the fair value of the CLO assets was
$
9.6
billion
and
$
7.9
billion
, respectively.
|
|
As of
|
||
|
|
September 30,
2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Accrued performance allocations and incentive fee related compensation
|
$
|
$
|
|
|
Accrued bonuses
|
|
|
|
|
Realized performance allocations and incentive fee related compensation not yet paid
|
|
|
|
|
Other
|
|
|
|
|
Total
|
$
|
$
|
|
46
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Realized
|
$
|
$
|
$
|
$
|
|||
|
Unrealized
|
(
|
|
(
|
|
|||
|
Total
|
$
(
|
$
|
$
|
$
|
|||
The Company and its unconsolidated affiliates have unfunded commitments totaling
$
4.0
billion
as of
September 30,
2025
, of which approximately
$
3.4
billion
is subscribed individually by senior Carlyle professionals, advisors and other
professionals. In addition to these unfunded commitments, the Company may from time to time exercise its right to purchase
additional interests in its investment funds that become available in the ordinary course of their operations.
Under the Carlyle Global Capital Markets platform, certain subsidiaries of the Company may act as an underwriter,
syndicator or placement agent for security offerings and loan originations. The Company earns fees in connection with these
activities and bears the risk of the sale of such securities and placement of such loans, which may be longer dated. As of
September 30, 2025
, the Company had
no
material commitments related to the origination and syndication of loans and
securities under the Carlyle Global Capital Markets platform.
From time to time, the Company or its subsidiaries may enter into agreements to guarantee certain obligations of the
investment funds related to, for example, credit facilities or equity commitments. Certain consolidated subsidiaries of the
Company are the guarantors of revolving credit facilities for certain funds in the Carlyle AlpInvest segment. The guarantee is
limited to the lesser of the total amount drawn under the credit facilities or the total of net asset value of the guarantor
subsidiaries plus any uncalled capital of the applicable general partner. The outstanding balances are secured by uncalled capital
commitments from the underlying funds and the Company believes the likelihood of any material funding under this guarantee
to be remote. The Company had
no
material outstanding guarantees under the credit facilities as of
September 30, 2025
.
Certain consolidated subsidiaries of the Company were the guarantors of a credit agreement for a fund in the Carlyle
AlpInvest segment, with a maximum potential amount to be funded of
$
25.0
million
. The credit agreement and related
guarantee expired in August 2025 with no funding required by the Company.
A liability for potential repayment of previously received performance allocations of
$
44.6
million
at
September 30, 2025
was shown as accrued giveback obligations in the condensed consolidated balance sheets, representing the giveback obligation
that would need to be paid if the funds were liquidated at their current fair values at
September 30, 2025
. However, the ultimate
giveback obligation, if any, generally is not paid until the end of a fund’s life or earlier if the giveback becomes fixed and early
payment is agreed upon by the fund’s partners (see Note
2
,
Summary of Significant Accounting Policies
). The Company had
$
11.5
million
of unbilled receivables from former and current employees and senior Carlyle professionals as of
September 30,
2025
related to giveback obligations. Any such receivables are collateralized by investments made by individual senior Carlyle
professionals and employees in Carlyle-sponsored funds. In addition,
$
153.9
million
have been withheld from distributions of
carried interest to senior Carlyle professionals and employees for potential giveback obligations as of
September 30, 2025
. Such
amounts are held on behalf of the respective current and former Carlyle employees to satisfy any givebacks they may owe and
are held by entities not included in the accompanying condensed consolidated balance sheets. Current and former senior Carlyle
professionals and employees are personally responsible for their giveback obligations. As of
September 30, 2025
,
approximately
$
11.5
million
of the Company’s accrued giveback obligation is the responsibility of various current and former
senior Carlyle professionals and other former limited partners of the Carlyle Holdings partnerships, and the net accrued
giveback obligation attributable to the Company is
$
33.1
million
.
47
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
If, at
September 30, 2025
, all of the investments held by the Company’s Funds were deemed worthless, a possibility that
management views as remote, the amount of realized and distributed carried interest subject to potential giveback would be
$
1.5
billion
, on an after-tax basis where applicable, of which approximately
$
0.6
billion
would be the responsibility of current
and former senior Carlyle professionals.
In the ordinary course of business, the Company is a party to litigation, investigations, inquiries, employment-related
matters, disputes, and other potential claims. Certain of these matters are described below. The Company is not currently able to
estimate the reasonably possible amount of loss or range of loss, in excess of amounts accrued, for the matters that have not
been resolved. The Company does not believe it is probable that the outcome of any existing litigation, investigations, disputes,
or other potential claims will materially affect the Company or these financial statements in excess of amounts accrued.
The Authentix Matter
Authentix, Inc. (“Authentix”) was a majority-owned portfolio company in one of the Company’s investment funds,
Carlyle U.S. Growth Fund III, L.P. (“CGF III”). When Authentix was owned by CGF III,
two
of the Company’s employees
served on Authentix’s board of directors. After a lengthy sale process, Authentix was sold for an aggregate sale price of
$
87.5
million
. On August 7, 2020, certain of the former minority shareholders in Authentix filed suit in Delaware Chancery
Court, alleging that the Authentix board of directors, CGF III, and the Company breached various fiduciary duties by agreeing
to a sale of Authentix at an inopportune time and at a price that was too low. A trial before the Delaware Court of Chancery was
completed in early February 2024, and a decision was rendered in favor of the Company and all other defendants on all claims
on January 8, 2025. The plaintiffs appealed the decision to the Delaware Supreme Court on March 13, 2025. Oral argument on
the appeal was held on October 22, 2025, and a decision was rendered in favor of the Company and all other defendants on all
claims on November 5, 2025.
The Tax Receivable Agreement Matter
The Company came into existence on January 1, 2020, when its predecessor, The Carlyle Group, L.P. (the “PTP”),
converted from a partnership into a corporation (the “Conversion”). On July 29, 2022, an alleged stockholder of the Company,
the City of Pittsburgh Comprehensive Municipal Trust Fund (the “original Plaintiff”), filed suit in the Delaware Court of
Chancery, alleging a direct claim against the Company for breach of its certificate of incorporation and a derivative claim on
behalf of the Company against certain current and former officers and directors of the Company. As the original Plaintiff did
not actually own shares on the date of the Conversion, it stipulated to the dismissal of the derivative claims in October of 2025
and the Court has allowed Charles Blackburn (together with the original Plaintiff, “Plaintiffs”) to intervene as a new plaintiff
with respect to the derivative claims. The original Plaintiff continues as a plaintiff with respect to one direct claim. Plaintiffs
challenge the receipt, by certain officers of the PTP and certain directors of the general partner of the PTP, of a right to cash
payments associated with the elimination of a tax receivable agreement in connection with the Conversion.
Plain
tiffs are
seeking monetary damages, restitution, and an injunction preventing the Company from making any future cash payments for
the elimination of the tax receivable agreement in connection with the Conversion. By virtue of the derivative nature of the
primary claims (i.e., that the claims are aimed primarily at certain officers and directors), it is unlikely that the Company itself
will pay material damage awards based on the derivative claims, although the Company is expected to incur legal defense fees
to the extent not covered by insurance. The Delaware Court issued a ruling on the defendant’s motion to dismiss on April 24,
2024, dismissing some of the original Plaintiff’s claims but allowing most of the claims to proceed to discovery and possibly to
trial. The Company intends to contest the direct claims vigorously, and the officer and director defendants intend to continue
contesting the derivative claims vigorously.
General
The Company currently is and expects to continue to be, from time to time, subject to examinations, formal and informal
inquiries, and investigations by various U.S. and non-U.S. governmental and regulatory agencies, including but not limited to,
the SEC, Department of Justice, state attorneys general, FINRA, National Futures Association, and the U.K. Financial Conduct
Authority. The Company routinely cooperates with such examinations, inquiries and investigations, and they may result in the
commencement of civil, criminal, or administrative or other proceedings against the Company or its personnel.
48
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings and employment-
related matters, and some of the matters discussed above involve claims for potentially large and/or indeterminate amounts of
damages. Based on information known by management, management does not believe that as of the date of this filing the final
resolutions of the matters above will have a material effect upon the Company’s condensed consolidated financial statements.
However, given the potentially large and/or indeterminate amounts of damages sought in certain of these matters and the
inherent unpredictability of investigations and litigations, it is possible that an adverse outcome in certain matters could, from
time to time, have a material effect on the Company’s financial results in any particular period.
The Company accrues an estimated loss contingency liability when it is probable that such a liability has been incurred
and the amount of the loss can be reasonably estimated. As of
September 30, 2025
, the Company had recorded liabilities
aggregating to approximately
$
35
million
for litigation-related contingencies, regulatory examinations and inquiries, and other
matters. The Company evaluates its outstanding legal and regulatory proceedings and other matters each quarter to assess its
loss contingency accruals, and makes adjustments in such accruals, upward or downward, as appropriate, based on
management’s best judgment after consultation with counsel. There is no assurance that the Company’s accruals for loss
contingencies will not need to be adjusted in the future or that, in light of the uncertainties involved in such matters, the ultimate
resolution of these matters will not significantly exceed the accruals that the Company has recorded.
Indemnifications
In the normal course of business, the Company and its subsidiaries enter into contracts that contain a variety of
representations and warranties and provide general indemnifications. The Company’s maximum exposure under these
arrangements is unknown as this would involve future claims that may be made against the Company that have not yet
occurred. However, based on experience, the Company believes the risk of material loss to be remote.
In connection with the sale of the Company’s interest in its local Brazilian management entity in August 2021, the
Company provided a guarantee to the acquiring company of up to BRL
100.0
million
(
$
18.8
million
as of
September 30, 2025
)
for liabilities arising from tax-related indemnifications. This guarantee, which will expire in August 2027, would only come
into effect after all alternative remedies have been exhausted. The Company believes the likelihood of any material funding
under this guarantee to be remote.
Risks and Uncertainties
Carlyle’s funds seek investment opportunities that offer the possibility of attaining substantial capital appreciation.
Certain events particular to each industry in which the underlying investees conduct their operations, as well as general
economic, political, regulatory, and public health conditions, may have a significant negative impact on the Company’s
investments and profitability. The funds managed by the Company may also experience a slowdown in the deployment of
capital, which could adversely affect the Company’s ability to raise capital for new or successor funds and could also impact the
management fees the Company earns on its carry funds and managed accounts, and/or result in the impairment of intangible
assets and/or goodwill the case of the Company’s acquired businesses. Such events are beyond the Company’s control, and the
likelihood that they may occur and the effect on the Company cannot be predicted.
Furthermore, certain of the funds’ investments are made in private companies and there are generally no public markets
for the underlying securities at the current time. The funds’ ability to liquidate their publicly-traded investments are often
subject to limitations, including discounts that may be required to be taken on quoted prices due to the number of shares being
sold. The funds’ ability to liquidate their investments and realize value is subject to significant limitations and uncertainties,
including among others currency fluctuations and natural disasters.
The Company and the funds make investments outside of the United States. Investments outside the United States may be
subject to less developed bankruptcy, corporate, partnership and other laws (which may have the effect of disregarding or
otherwise circumventing the limited liability structures potentially causing the actions or liabilities of one fund or a portfolio
company to adversely impact the Company or an unrelated fund or portfolio company). Non-U.S. investments are subject to the
same risks associated with the Company’s U.S. investments as well as additional risks, such as fluctuations in foreign currency
exchange rates, unexpected changes in regulatory requirements, heightened risk of political and economic instability,
difficulties in managing non-U.S. investments, potentially adverse tax consequences, and the burden of complying with a wide
variety of foreign laws.
49
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Furthermore, Carlyle is exposed to economic risk concentrations related to certain large investments as well as
concentrations of investments in certain industries and geographies.
Additionally, the Company encounters credit risk. Credit risk is the risk of default by a counterparty in the Company’s
investments in debt securities, loans, leases, and derivatives that result from a borrower’s, lessee’s, or derivative counterparty’s
inability or unwillingness to make required or expected payments. The Company is subject to credit risk should a financial
institution be unable to fulfill its obligations.
The Company considers cash, cash equivalents, securities, receivables, principal equity method investments, accounts
payable, accrued expenses, other liabilities, loans, senior notes, assets, and liabilities of Consolidated Funds and contingent and
other consideration for acquisitions to be its financial instruments. Except for the senior notes, subordinated notes, and
compensatory contingent and other consideration for acquisitions, the carrying amounts reported in the condensed consolidated
balance sheets for these financial instruments equal or closely approximate their fair values. The fair value of the senior and
subordinated notes is disclosed in Note
6
,
Borrowings
.
Du
e from Affiliates and Other Receivables, Net
2024
:
|
|
As of
|
||
|
|
September 30,
2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Accrued incentive fees
|
$
|
$
|
|
|
Unbilled receivable for giveback obligations from current and former employees
|
|
|
|
|
Notes receivable and accrued interest from affiliates
|
|
|
|
|
Management fee receivable, net
|
|
|
|
|
Reimbursable expenses and other receivables from unconsolidated funds and affiliates, net
|
|
|
|
|
Total
|
$
|
$
|
|
Reimbursable expenses and other receivables from certain of the unconsolidated funds and portfolio companies relate to
advisory fees receivable and expenses paid on behalf of these entities. These costs generally represent costs related to the
pursuit of actual or proposed investments, professional fees, and expenses associated with the acquisition, holding, and
disposition of the investments. The affiliates are obligated at the discretion of the Company to reimburse the expenses. Based
on management’s determination, the Company may accrue and charge interest on amounts due from affiliate accounts at
interest rates ranging up to
7.05
%
as of
September 30, 2025
.
The accrued and charged interest to the affiliates was not
significant for any period presented.
Notes receivable includes loans that the Company has provided to certain unconsolidated funds to meet short-term
obligations to purchase investments. Notes receivable as of
September 30, 2025
and
December 31, 2024
also include interest-
bearing loans of
$
19.1
million
and
$
22.8
million
, respectively, to certain eligible Carlyle employees, which excludes Section 16
officers and other members of senior management, to finance their investments in certain Carlyle sponsored funds. These
advances accrue interest at the WSJ
Prime Rate
minus
1.00
%
floating with a floor rate of
3.50
%
(
6.25
%
as of
September 30,
2025
) and are collateralized by each borrower’s interest in the Carlyle sponsored funds.
These receivables are assessed regularly for collectability. Management fee receivable amounts determined to be
uncollectible are recorded as a reduction in revenue in the condensed consolidated statements of operations. For all other
receivables, amounts determined to be uncollectible are charged directly to general, administrative and other expenses in the
condensed consolidated statements of operations. A corresponding allowance for doubtful accounts is recorded and such
amounts were not significant for any period presented.
50
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Due to Affiliates
|
|
As of
|
||
|
|
September 30,
2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Due to affiliates of Consolidated Funds
|
$
|
$
|
|
|
Due to non-consolidated affiliates
|
|
|
|
|
Amounts owed under the tax receivable agreement
|
|
|
|
|
Other
|
|
|
|
|
Total
|
$
|
$
|
|
The Company has recorded obligations for amounts due to certain of its affiliates. The Company periodically offsets
expenses it has paid on behalf of its affiliates against these obligations.
In connection with the Company’s initial public offering, the Company entered into a tax receivable agreement with the
limited partners of the Carlyle Holdings partnerships whereby certain subsidiaries of the Partnership agreed to pay to the limited
partners of the Carlyle Holdings partnerships involved in any exchange transaction
85
%
of the amount of cash tax savings, if
any, in U.S. federal, state and local income tax realized as a result of increases in tax basis resulting from exchanges of Carlyle
Holdings Partnership units for common units of The Carlyle Group L.P.
Other Related Party Transactions
Aircraft Transactions
Entities controlled by our co-founders own aircraft that may be used for the Company’s business in the ordinary course of
its operations. The hourly rates that the Company pays for the use of these aircraft are based on current market rates for
chartering private aircraft of the same type. The Company incurred fees for the use of these aircraft of
$
0.4
million
and
$
1.4
million
for the
three and nine months ended September 30, 2025
,
respectively,
and
$
0.6
million
for both the
three and nine
months ended September 30, 2024
.
All payments were paid directly to the manager of the aircraft, and a significant portion of
the payments were ultimately paid to or were for the benefit of certain co-founders.
BDC Preferred Shares
On May 5, 2020, the Company purchased
2,000,000
of the BDC Preferred Shares from CGBD in a private placement at a
price of
$
25
per share. Prior to the Exchange, as defined and discussed below, dividends were payable on a quarterly basis in an
initial amount equal to
7.0
%
per annum payable in cash, or, at CGBD’s option,
9.0
%
per annum payable in additional BDC
Preferred Shares. The BDC Preferred Shares were convertible at the Company’s option, in whole or in part, into the number of
shares of common stock equal to
$
25
per share plus any accumulated but unpaid dividends divided by an initial conversion
price of
$
9.50
per share, subject to certain adjustments.
In August 2024, to facilitate a merger between CGBD and another Carlyle-advised BDC (the “Merger”), the Company
agreed to exchange its
2,000,000
preferred shares into newly issued common shares of CGBD at a price equal to the net asset
value per common share on the date of completion of the Merger (the “Exchange”). The Merger and the Exchange were
completed on March 27, 2025, and the Company exchanged its preferred shares for
3,004,808
newly issued common shares of
CGBD based on the net asset value of
$
16.64
per common share of CGBD on that date. The preferred shares were cancelled
following the completion of the Exchange. The newly issued common shares of CGBD are subject to a tiered lock-up
agreement with a restriction period that expires in three equal tranches of the common shares over a period of
two years
and are
recorded at fair value using Level I inputs based on the CGBD common share price.
The Company received the final dividend distribution related to its BDC Preferred Shares in the first quarter of 2025. For
the
three months ended September 30, 2024
, the Company recorded dividend income from the BDC Preferred Shares of
$
0.9
million
. For the
nine months ended September 30, 2025 and 2024
, the Company recorded dividend income from the BDC
51
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Preferred Shares of
$
0.8
million
and
$
2.6
million
, respectively. This was included in Interest and other income in the condensed
consolidated statements of operations. The Company’s investment in the BDC Preferred Shares, which was recorded at fair
value using Level III inputs based on the estimated conversion value, was
$
53.4
million
as of
December 31, 2024
, and was
included in Investments, including accrued performance allocations, in the condensed consolidated balance
sheets
.
Other Transactions
Senior Carlyle professionals and employees are permitted to participate in co-investment entities that invest in Carlyle
funds or alongside Carlyle funds. In many cases, participation is limited by law to individuals who qualify under applicable
legal requirements. These co-investment entities generally do not require senior Carlyle professionals and employees to pay
management fees or performance allocations, however, Carlyle professionals and employees are required to pay their portion of
partnership expenses.
Carried interest income from certain funds can be distributed to senior Carlyle professionals and employees on a current
basis, but is subject to repayment by the subsidiary of the Company that acts as general partner of the fund in the event that
certain specified return thresholds are not ultimately achieved. The senior Carlyle professionals and certain other investment
professionals have personally guaranteed, subject to certain limitations, the obligation of these subsidiaries in respect of this
general partner obligation. Such guarantees are several and not joint and are limited to a particular individual’s distributions
received.
The Company does business with some of its portfolio companies; all such arrangements are on a negotiated basis.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Provision (benefit) for income taxes
|
$
(
|
$
|
$
|
$
|
|||
|
Effective tax rate
|
(
|
|
|
|
|||
The effective tax rate for the
three months ended September 30, 2025 and 2024
primarily
comprised the 21% U.S. federal
corporate income tax rate, the impact of U.S. state and foreign income taxes and disallowed executive compensation, offset by
non-controlling interest and equity-based compensation deductions.
The effective tax rate for the three months ended
September 30, 2025 was negative primarily due to the tax benefit from the pretax loss incurred prior to the effect of non-
controlling interest and due to the deduction related to the excess tax benefit from the vesting of restricted stock units in the
quarter
.
The effective tax rate for the
nine months ended September 30, 2025
and
2024
primarily comprised the 21% U.S.
federal corporate income tax rate, the impact of U.S. state and foreign income taxes, and disallowed executive compensation,
primarily offset by equity-based compensation deductions and non-controlling interest. The effective tax rate for the nine
months ended September 30, 2024 also includes an increase related to other non-deductible expenses.
As of
September 30, 2025
and
December 31, 2024
, the Company had federal, state, local and foreign taxes payable of
$
90.6
million
and
$
46.2
million
, respectively, which is recorded as a component of accounts payable, accrued expenses and
other liabilities on the accompanying condensed consolidated balance sheets.
In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax
regulators. With a few exceptions, as of
September 30, 2025
, the Company’s U.S. federal income tax returns for the years
2021
through
2024
are open under the normal
three
-year statute of limitations and therefore subject to examination. State and local
tax returns are generally subject to audit from
2019
to
2024
. Foreign tax returns are generally subject to audit from
2011
to
2024
. Certain of the Company’s affiliates are currently under audit by federal, state and foreign tax authorities.
The Company does not believe that the outcome of the audits will require it to record material reserves for uncertain tax
positions or that the outcome will have a material impact on the condensed consolidated financial statements. The Company
52
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
does not believe that it has any tax positions for which it is reasonably possible that the total amounts of unrecognized tax
benefits will significantly increase or decrease within the
next twelve months
.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law. The IRA enacted a 15%
CAMT on the “adjusted financial statement income” of certain large corporations, which became effective on January 1, 2023.
The Company does not expect the IRA to have a material impact to its provision for income taxes given that any current year
payments that would be made under CAMT would be permitted to be carried forward and used as credits in future years
resulting in a deferred tax benefit. The Company will continue to monitor as additional guidance is released by U.S. Department
of the Treasury, the Internal Revenue Service, and other standard-setting bodies.
In October 2021, the OECD introduced a 15% global minimum tax under the Pillar Two GloBE model rules. There are a
number of key provisions under the rules that became effective in 2024 and others that will be phased in during 2025. Several
OECD member countries have enacted the tax legislation based on certain elements of these rules that became effective on
January 1, 2024, and additional countries have drafted or announced an intent to implement legislation. While Pillar Two has
not had a material impact to the Company’s provision for income taxes, the rules remain subject to significant negotiation and
potential change, and the timing and ultimate impact of any such changes on our tax obligations are uncertain. The Company
will continue to monitor as additional countries enact legislation, new parts of the regime come into force or additional
guidance is released by the OECD and other standard-setting bodies.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. The OBBBA extends several
provisions from the 2017 Tax Cuts and Jobs Act along with other domestic and international corporate tax provisions. The
OBBBA did not have a material impact on the Company’s provision for income taxes for the
three and nine months ended
September 30, 2025
, but the Company will continue to monitor as additional guidance is released by U.S. Department of the
Treasury, the Internal Revenue Service, and other standard-setting bodies.
|
|
As of
|
||
|
|
September
30, 2025
|
December 31,
2024
|
|
|
|
(Dollars in millions)
|
||
|
Non-Carlyle interests in Consolidated Funds
|
$
|
$
|
|
|
Non-Carlyle interests in majority-owned subsidiaries
|
|
|
|
|
Non-controlling interest in carried interest, giveback obligations and cash held for carried
interest distributions
|
|
(
|
|
|
Non-controlling interests in consolidated entities
|
$
|
$
|
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Non-Carlyle interests in Consolidated Funds
|
$
|
$
|
$
|
$
|
|||
|
Non-Carlyle interests in majority-owned subsidiaries
|
|
|
|
|
|||
|
Non-controlling interest in carried interest, giveback obligations and
cash held for carried interest distributions
|
|
|
(
|
|
|||
|
Non-controlling interests in income of consolidated entities
|
$
|
$
|
$
|
$
|
|||
53
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
|
Three Months Ended
September 30, 2025
|
Nine Months Ended
September 30, 2025
|
|||||
|
|
Basic
|
Diluted
|
Basic
|
Diluted
|
|||
|
Net income attributable to common shares
|
$
|
$
|
$
|
$
|
|||
|
Weighted-average common shares outstanding
|
|
|
|
|
|||
|
Net income per common share
|
$
|
$
|
$
|
$
|
|||
|
Three Months Ended
September 30, 2024
|
Nine Months Ended
September 30, 2024
|
||||||
|
Basic
|
Diluted
|
Basic
|
Diluted
|
||||
|
Net income attributable to common shares
|
$
|
$
|
$
|
$
|
|||
|
Weighted-average common shares outstanding
|
|
|
|
|
|||
|
Net income per common share
|
$
|
$
|
$
|
$
|
|||
|
|
Three Months Ended
September 30, 2025
|
Nine Months Ended
September 30, 2025
|
|||||
|
|
Basic
|
Diluted
|
Basic
|
Diluted
|
|||
|
The Carlyle Group Inc. weighted-average common shares outstanding
|
|
|
|
|
|||
|
Unvested restricted stock units
|
|
|
|
|
|||
|
Issuable common shares and performance-vesting restricted stock units
|
|
|
|
|
|||
|
Weighted-average common shares outstanding
|
|
|
|
|
|||
|
Three Months Ended
September 30, 2024
|
Nine Months Ended
September 30, 2024
|
||||||
|
Basic
|
Diluted
|
Basic
|
Diluted
|
||||
|
The Carlyle Group Inc. weighted-average common shares outstanding
|
|
|
|
|
|||
|
Unvested restricted stock units
|
|
|
|
|
|||
|
Issuable common shares and performance-vesting restricted stock units
|
|
|
|
|
|||
|
Weighted-average common shares outstanding
|
|
|
|
|
|||
The Company applies the treasury stock method to determine the dilutive weighted-average common shares represented
by the unvested restricted stock units. Also included in the determination of dilutive weighted-average common shares are
issuable common shares associated with the Company’s investment in NGP and performance-vesting restricted stock units.
Share Repurchase Program
The Board of Directors reset the total repurchase authorization of the Company’s previously approved share repurchase
program to
$
1.4
billion
in shares of the Company’s common stock, effective as of February 6, 2024. Under the share repurchase
program, shares of the Company’s common stock may be repurchased from time to time in open market transactions, in
privately negotiated transactions, or otherwise, including through Rule 10b5-1 plans. The timing and actual number of shares of
common stock repurchased will depend on a variety of factors, including legal requirements and price, economic, and market
conditions. In addition to repurchases of common stock, the share repurchase program is used for the payment of tax
withholding amounts upon net share settlement of equity-based awards granted pursuant to our Equity Incentive Plan or
otherwise based on the value of shares withheld that would have otherwise been issued to the award holder. The share
repurchase program may be suspended or discontinued at any time and does not have a specified expiration date. As of
54
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
September 30, 2025
,
$
369.3
million
of repurchase capacity remained under the program, which reflects both common shares
repurchased and shares retired in connection with the net share settlement of equity-based awards.
The following table presents
the Company’s shares that have been repurchased or retired as a result of net share settlement of equity-based awards during the
three and nine months ended September 30, 2025
and
2024
. Dollar amounts exclude the impact of excise taxes.
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
|
2025
|
2024
|
2025
|
2024
|
||||||||
|
Shares
|
$
|
Shares
|
$
|
Shares
|
$
|
Shares
|
$
|
||||
|
(Dollars in millions, except share data)
|
|||||||||||
|
Shares repurchased
|
|
$
|
|
$
|
|
$
|
|
$
|
|||
|
Shares retired in connection with the
net share settlement of equity-based
awards
|
|
|
|
|
|
|
|
|
|||
|
Total
|
|
$
|
|
$
|
|
$
|
|
$
|
|||
Dividends
sole discretion of the Board of Directors of the Company.
|
Dividend Record Date
|
Dividend Payment Date
|
Dividend per Common
Share
|
Dividend to Common
Stockholders
|
|||
|
(Dollars in millions, except per share data)
|
||||||
|
May 14, 2024
|
May 21, 2024
|
$
|
$
|
|||
|
August 16, 2024
|
August 26, 2024
|
|
|
|||
|
November 18, 2024
|
November 25, 2024
|
|
|
|||
|
February 21, 2025
|
February 28, 2025
|
|
|
|||
|
Total 2024 Dividend Year
|
$
|
$
|
||||
|
May 19, 2025
|
May 27, 2025
|
$
|
$
|
|||
|
August 18, 2025
|
August 28, 2025
|
|
|
|||
|
November 10, 2025
|
November 19, 2025
|
|
|
|||
|
Total 2025 Dividend Year (through Q3 2025)
|
$
|
$
|
||||
The Board of Directors will take into account general economic and business conditions, as well as the Company’s
strategic plans and prospects, business and investment opportunities, financial condition and obligations, legal, tax, and
regulatory restrictions, other constraints on the payment of dividends by the Company to its common stockholders or by
subsidiaries to the Company, and other such factors as the Board of Directors may deem relevant. In addition, the terms of the
Company’s credit facility provide certain limits on the Company’s ability to pay dividends
.
The Carlyle Group Inc. Amended and Restated 2012 Equity Incentive Plan (the “Equity Incentive Plan,” initially adopted
in May 2012 and as most recently amended and restated on May 29, 2024) is a source of equity-based awards permitting the
Company to grant to Carlyle employees, directors and consultants non-qualified options, share appreciation rights, common
shares, restricted stock units and other awards based on the Company’s shares of common stock. A total of
58,800,000
shares of
common stock are authorized for the grant of awards under the Equity Incentive Plan, of which a total of
26,197,170
shares of
the Company’s common stock remain available for grant as of
September 30, 2025
.
55
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
changes for the
nine months ended September 30, 2025
, are presented below:
|
Unvested Shares
|
Performance-
Vesting
Restricted
Stock Units
|
Weighted-
Average
Grant Date
Fair Value
|
Restricted
Stock
Units
|
Weighted-
Average
Grant Date
Fair Value
|
Unvested
Common
Shares
|
Weighted-
Average
Grant Date
Fair Value
|
|||||
|
Balance, December 31, 2024
|
|
$
|
|
$
|
|
$
|
|||||
|
Granted
(1)
|
|
$
|
|
$
|
|
$
|
|||||
|
Vested
(2)
|
|
$
|
|
$
|
|
$
|
|||||
|
Forfeited
|
|
$
|
|
$
|
|
$
|
|||||
|
Balance, September 30, 2025
|
|
$
|
|
$
|
|
$
|
(1)
Includes shares reserved for issuance upon settlement of dividend-equivalent rights carried by certain restricted stock units concurrently
with the settlement of the restricted stock units for shares.
(2)
Includes
4,620,513
shares that were retired in connection with the net share settlement of equity-based awards. The Company paid
$
257.8
million
of taxes related to the net share settlement of equity-based awards during the
nine months ended September 30, 2025
,
which is included within financing activities in the condensed consolidated statements of cash flows.
The Company recorded equity-based compensation expense, net of forfeitures, for restricted stock units of
$
90.7
million
and
$
121.6
million
for the
three months ended September 30, 2025 and 2024
, respectively, with
$
15.9
million
and
$
23.1
million
of corresponding deferred tax benefits, respectively. The Company recorded equity-based compensation expense,
net of forfeitures, for restricted stock units of
$
287.1
million
and
$
355.1
million
for the
nine months ended September 30, 2025
and 2024
, respectively, with
$
52.6
million
and
$
66.9
million
of corresponding deferred tax benefits, respectively. As of
September 30, 2025
, the total unrecognized equity-based compensation expense related to unvested restricted stock units was
$
457.8
million
, which is expected to be recognized over a weighted-average term of
1.9
years
.
Car
lyle conducts its operations through
three
reportable segments:
Global Private Equity
– The Global Private Equity segment advises buyout, growth, real estate, and infrastructure &
natural resources funds. The segment also includes the NGP Carry Funds advised by NGP.
Global Credit
– The Global Credit segment advises funds and vehicles that pursue investment strategies including
insurance solutions, liquid credit, opportunistic credit, direct lending, asset-backed finance, aviation finance,
infrastructure credit, cross-platform credit products, and global capital markets.
Carlyle AlpInvest
– The Carlyle AlpInvest segment advises global private equity programs that pursue secondary
purchases and financing of existing portfolios, managed co-investment programs, and primary fund investments.
The Company’s reportable business segments are differentiated by their various investment focuses and strategies.
Overhead costs are generally allocated based on cash-based compensation and benefits expense for each segment. The
Company’s earnings from its investment in NGP are presented in the respective operating captions within the Global Private
Equity segment.
Distributable Earnings
.
Distributable Earnings, or “DE,” is a key performance benchmark used in the Company’s
industry and is evaluated regularly by the chief operating decision maker (“CODM”), which is our Chief Executive Officer, in
making resource deployment and compensation decisions and in assessing performance of the Company’s
three
reportable
segments. The CODM also uses DE in budgeting, forecasting, and the overall management of the Company’s segments. The
CODM believes that reporting DE is helpful to understanding the Company’s business and that investors should review the
same supplemental financial measure that the CODM uses to analyze the Company’s segment performance. DE is intended to
show the amount of net realized earnings without the effects of the consolidation of the Consolidated Funds. DE is derived from
the Company’s segment reported results and is used to assess performance.
Distributable Earnings differs from income (loss) before provision for income taxes computed in accordance with U.S.
GAAP in that it includes certain tax expenses associated with certain foreign performance revenues (composed of performance
56
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
allocations and incentive fees), and does not include unrealized performance allocations and related compensation expense,
unrealized principal investment income, equity-based compensation expense, net income (loss) attributable to non-Carlyle
interests in consolidated entities, or charges (credits) related to Carlyle corporate actions and non-recurring items that affect
period-to-period comparability and are not reflective of the Company’s operational performance. Charges (credits) related to
Carlyle corporate actions and non-recurring items include: charges associated with the Conversion, charges (credits) associated
with acquisitions, dispositions or strategic investments, changes in the tax receivable agreement liability, amortization and any
impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions and dispositions,
charges associated with earn-outs and contingent consideration including gains and losses associated with the estimated fair
value of contingent considerations issued in conjunction with acquisitions or strategic investments, impairment charges
associated with lease right-of-use assets, gains and losses from the retirement of debt, charges associated with contract
terminations and employee severance, and non-recurring items that affect period-to-period comparability and are not reflective
of the Company’s operating performance. Management believes the inclusion or exclusion of these items provides investors
with a meaningful indication of the Company’s core operating performance.
Fee Related Earnings
. Fee Related Earnings, or “FRE,” is a component of DE and is used to assess the ability of the
business to cover base compensation and operating expenses from total fee revenues. FRE adjusts DE to exclude net realized
performance revenues, realized principal investment income, and net interest (interest income less interest expense). Fee
Related Earnings includes fee related performance revenues and related compensation expense. Fee related performance
revenues represent the realized portion of performance revenues that are measured and received on a recurring basis, are not
dependent on realization events, and which have no risk of giveback.
Asset information by segment is not disclosed because this information is not used by the CODM to make resource
deployment decisions or evaluate the performance of the Company’s segments.
57
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
ended September 30, 2025
:
|
Three Months Ended September 30, 2025
|
|||||||
|
Global
Private
Equity
|
Global
Credit
|
Carlyle
AlpInvest
|
Total
|
||||
|
(Dollars in millions)
|
|||||||
|
Segment Revenues
|
|||||||
|
Fund level fee revenues
|
|||||||
|
Fund management fees
|
$
|
$
|
$
|
$
|
|||
|
Portfolio advisory and transaction fees, net and other
|
|
|
|
|
|||
|
Fee related performance revenues
|
|
|
|
|
|||
|
Total fund level fee revenues
|
|
|
|
|
|||
|
Realized performance revenues
|
|
|
|
|
|||
|
Realized principal investment income (loss)
|
(
|
|
|
|
|||
|
Interest income
|
|
|
|
|
|||
|
Total revenues
|
|
|
|
|
|||
|
Segment Expenses
|
|||||||
|
Compensation and benefits
|
|||||||
|
Cash-based compensation and benefits
|
|
|
|
|
|||
|
Realized performance revenues related compensation
|
|
|
|
|
|||
|
Total compensation and benefits
|
|
|
|
|
|||
|
General, administrative, and other indirect expenses
(1)
|
|
|
|
|
|||
|
Depreciation and amortization expense
|
|
|
|
|
|||
|
Interest expense
|
|
|
|
|
|||
|
Total expenses
|
|
|
|
|
|||
|
(=) Distributable Earnings
|
$
|
$
|
$
|
$
|
|||
|
(-) Realized Net Performance Revenues
|
|
|
|
|
|||
|
(-) Realized Principal Investment Income
|
(
|
|
|
|
|||
|
(+) Net Interest
|
|
|
|
|
|||
|
(=) Fee Related Earnings
|
$
|
$
|
$
|
$
|
|||
58
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Nine Months Ended September 30, 2025
|
|||||||
|
Global
Private
Equity
|
Global
Credit
|
Carlyle
AlpInvest
|
Total
|
||||
|
(Dollars in millions)
|
|||||||
|
Segment Revenues
|
|||||||
|
Fund level fee revenues
|
|||||||
|
Fund management fees
|
$
|
$
|
$
|
$
|
|||
|
Portfolio advisory and transaction fees, net and other
|
|
|
|
|
|||
|
Fee related performance revenues
|
|
|
|
|
|||
|
Total fund level fee revenues
|
|
|
|
|
|||
|
Realized performance revenues
|
|
|
|
|
|||
|
Realized principal investment income
|
|
|
|
|
|||
|
Interest income
|
|
|
|
|
|||
|
Total revenues
|
|
|
|
|
|||
|
Segment Expenses
|
|||||||
|
Compensation and benefits
|
|||||||
|
Cash-based compensation and benefits
|
|
|
|
|
|||
|
Realized performance revenues related compensation
|
|
|
|
|
|||
|
Total compensation and benefits
|
|
|
|
|
|||
|
General, administrative, and other indirect expenses
(1)
|
|
|
|
|
|||
|
Depreciation and amortization expense
|
|
|
|
|
|||
|
Interest expense
|
|
|
|
|
|||
|
Total expenses
|
|
|
|
|
|||
|
(=) Distributable Earnings
|
$
|
$
|
$
|
$
|
|||
|
(-) Realized Net Performance Revenues
|
|
|
|
|
|||
|
(-) Realized Principal Investment Income
|
|
|
|
|
|||
|
(+) Net Interest
|
|
|
|
|
|||
|
(=) Fee Related Earnings
|
$
|
$
|
$
|
$
|
|||
(1)
General, administrative, and other indirect expenses primarily comprised professional fees, rent and other office expenses, IT expenses, travel and
entertainment expenses, and fundraising costs.
59
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The following tables present the financial data for the Company’s
three
reportable segments for the
three and nine months
ended September 30, 2024
:
|
Three Months Ended September 30, 2024
|
|||||||
|
Global
Private
Equity
|
Global
Credit
|
Carlyle
AlpInvest
|
Total
|
||||
|
(Dollars in millions)
|
|||||||
|
Segment Revenues
|
|||||||
|
Fund level fee revenues
|
|||||||
|
Fund management fees
|
$
|
$
|
$
|
$
|
|||
|
Portfolio advisory and transaction fees, net and other
|
|
|
|
|
|||
|
Fee related performance revenues
|
|
|
|
|
|||
|
Total fund level fee revenues
|
|
|
|
|
|||
|
Realized performance revenues
|
|
|
|
|
|||
|
Realized principal investment income (loss)
|
|
(
|
|
|
|||
|
Interest income
|
|
|
|
|
|||
|
Total revenues
|
|
|
|
|
|||
|
Segment Expenses
|
|||||||
|
Compensation and benefits
|
|||||||
|
Cash-based compensation and benefits
|
|
|
|
|
|||
|
Realized performance revenues related compensation
|
|
|
|
|
|||
|
Total compensation and benefits
|
|
|
|
|
|||
|
General, administrative, and other indirect expenses
(1)
|
|
|
|
|
|||
|
Depreciation and amortization expense
|
|
|
|
|
|||
|
Interest expense
|
|
|
|
|
|||
|
Total expenses
|
|
|
|
|
|||
|
(=) Distributable Earnings
|
$
|
$
|
$
|
$
|
|||
|
(-) Realized Net Performance Revenues
|
|
|
|
|
|||
|
(-) Realized Principal Investment Income (Loss)
|
|
(
|
|
|
|||
|
(+) Net Interest
|
|
|
|
|
|||
|
(=) Fee Related Earnings
|
$
|
$
|
$
|
$
|
|||
60
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
|
Nine Months Ended September 30, 2024
|
||||||
|
Global
Private
Equity
|
Global
Credit
|
Carlyle
AlpInvest
|
Total
|
||||
|
|
(Dollars in millions)
|
||||||
|
Segment Revenues
|
|||||||
|
Fund level fee revenues
|
|||||||
|
Fund management fees
|
$
|
$
|
$
|
$
|
|||
|
Portfolio advisory and transaction fees, net and other
|
|
|
|
|
|||
|
Fee related performance revenues
|
|
|
|
|
|||
|
Total fund level fee revenues
|
|
|
|
|
|||
|
Realized performance revenues
|
|
|
|
|
|||
|
Realized principal investment income
|
|
|
|
|
|||
|
Interest income
|
|
|
|
|
|||
|
Total revenues
|
|
|
|
|
|||
|
Segment Expenses
|
|||||||
|
Compensation and benefits
|
|||||||
|
Cash-based compensation and benefits
|
|
|
|
|
|||
|
Realized performance revenues related compensation
|
|
|
|
|
|||
|
Total compensation and benefits
|
|
|
|
|
|||
|
General, administrative, and other indirect expenses
(1)
|
|
|
|
|
|||
|
Depreciation and amortization expense
|
|
|
|
|
|||
|
Interest expense
|
|
|
|
|
|||
|
Total expenses
|
|
|
|
|
|||
|
(=) Distributable Earnings
|
$
|
$
|
$
|
$
|
|||
|
(-) Realized Net Performance Revenues
|
|
|
|
|
|||
|
(-) Realized Principal Investment Income
|
|
|
|
|
|||
|
(+) Net Interest
|
|
|
|
|
|||
|
(=) Fee Related Earnings
|
$
|
$
|
$
|
$
|
|||
(1)
General, administrative, and other indirect expenses primarily comprised professional fees, rent and other office expenses, IT expenses, travel and
entertainment expenses, and fundraising costs.
three months ended September 30, 2025 and 2024
:
|
|
Three Months Ended September 30, 2025
|
||||||||
|
|
Total
Reportable
Segments
|
Consolidated
Funds
|
Reconciling
Items
|
Carlyle
Consolidated
|
|||||
|
|
|||||||||
|
|
(Dollars in millions)
|
||||||||
|
Revenues
|
$
|
$
|
$
(
|
(a)
|
$
|
||||
|
Expenses
|
$
|
$
|
$
(
|
(b)
|
$
|
||||
|
Other income (loss)
|
$
|
$
|
$
|
(c)
|
$
|
||||
|
Distributable earnings
|
$
|
$
|
$
(
|
(d)
|
$
|
||||
61
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
|
Three Months Ended September 30, 2024
|
||||||||
|
|
Total
Reportable
Segments
|
Consolidated
Funds
|
Reconciling
Items
|
Carlyle
Consolidated
|
|||||
|
|
|||||||||
|
|
(Dollars in millions)
|
||||||||
|
Revenues
|
$
|
$
|
$
|
(a)
|
$
|
||||
|
Expenses
|
$
|
$
|
$
|
(b)
|
$
|
||||
|
Other income (loss)
|
$
|
$
|
$
|
(c)
|
$
|
||||
|
Distributable earnings
|
$
|
$
|
$
|
(d)
|
$
|
||||
The following tables reconcile the Total Segments to the Company’s Income (Loss) Before Provision for Taxes for the
nine months ended September 30, 2025 and 2024
.
|
|
Nine Months Ended September 30, 2025
|
||||||||
|
|
Total
Reportable
Segments
|
Consolidated
Funds
|
Reconciling
Items
|
Carlyle
Consolidated
|
|||||
|
|
|||||||||
|
|
(Dollars in millions)
|
||||||||
|
Revenues
|
$
|
$
|
$
(
|
(a)
|
$
|
||||
|
Expenses
|
$
|
$
|
$
|
(b)
|
$
|
||||
|
Other income (loss)
|
$
|
$
|
$
|
(c)
|
$
|
||||
|
Distributable earnings
|
$
|
$
|
$
(
|
(d)
|
$
|
||||
|
|
Nine Months Ended September 30, 2024
|
||||||||
|
|
Total
Reportable
Segments
|
Consolidated
Funds
|
Reconciling
Items
|
|
Carlyle
Consolidated
|
||||
|
|
|
||||||||
|
|
(Dollars in millions)
|
||||||||
|
Revenues
|
$
|
$
|
$
|
(a)
|
$
|
||||
|
Expenses
|
$
|
$
|
$
|
(b)
|
$
|
||||
|
Other income (loss)
|
$
|
$
(
|
$
|
(c)
|
$
(
|
||||
|
Distributable earnings
|
$
|
$
|
$
(
|
(d)
|
$
|
||||
(a)
The Revenues adjustment principally represents unrealized performance revenues, unrealized principal investment
income (loss) (including Fortitude), revenues earned from the Consolidated Funds which were eliminated in
consolidation to arrive at the Company’s total revenues, adjustments for amounts attributable to non-controlling
interests in consolidated entities, adjustments related to expenses associated with the investments in NGP Management
and its affiliates that are included in operating captions or are excluded from the segment results, adjustments to reflect
the reimbursement of certain costs incurred on behalf of Carlyle funds on a net basis, and the inclusion of tax expenses
associated with certain foreign performance revenues, as detailed below:
62
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
(Dollars in millions)
|
|||||||
|
Unrealized performance and fee related performance revenues
|
$
(
|
$
|
$
(
|
$
|
|||
|
Unrealized principal investment income (loss)
|
(
|
|
|
|
|||
|
Adjustments related to expenses associated with investments in NGP
Management and its affiliates
|
(
|
(
|
(
|
(
|
|||
|
Non-controlling interests and other adjustments to present certain costs on
a net basis
|
|
|
|
|
|||
|
Elimination of revenues of Consolidated Funds
|
(
|
(
|
(
|
(
|
|||
|
$
(
|
$
|
$
(
|
$
|
||||
The following table reconciles the total segments fund level fee revenue to the most directly comparable U.S. GAAP
measure, the Company’s consolidated fund management fees, for the
three and nine months ended September 30, 2025
and
2024
.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
(Dollars in millions)
|
|||||||
|
Total Reportable Segments - Fund level fee revenues
|
$
|
$
|
$
|
$
|
|||
|
Adjustments
(1)
|
(
|
(
|
(
|
(
|
|||
|
Carlyle Consolidated - Fund management fees
|
$
|
$
|
$
|
$
|
|||
(1)
Adjustments represent the reclassification of NGP management fees from principal investment income, the
reclassification of fee related performance revenues from business development companies and other products,
management fees earned from Consolidated Funds which were eliminated in consolidation to arrive at the
Company’s fund management fees, and the reclassification of certain amounts included in portfolio advisory
fees, net and other in the segment results that are included in interest and other income in the U.S. GAAP results.
(b)
The Expenses adjustment represents the elimination of intercompany expenses of the Consolidated Funds payable to the
Company, the inclusion of equity-based compensation, certain tax expenses associated with realized performance
revenues related compensation, and unrealized performance revenues related compensation, adjustments related to
expenses associated with the investment in NGP Management that are included in operating captions, adjustments to
reflect the reimbursement of certain costs incurred on behalf of Carlyle funds on a net basis, changes in the tax
receivable agreement liability, and charges and credits associated with Carlyle corporate actions and non-recurring
items, as detailed below:
63
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
(Dollars in millions)
|
|||||||
|
Unrealized performance and fee related performance revenue
compensation expense
|
$
(
|
$
|
$
(
|
$
|
|||
|
Equity-based compensation
|
|
|
|
|
|||
|
Acquisition or disposition-related charges and amortization of intangibles
and impairment
|
|
|
|
|
|||
|
Tax (expense) benefit associated with certain foreign performance
revenues related compensation
|
(
|
(
|
(
|
(
|
|||
|
Non-controlling interests and other adjustments to present certain costs on
a net basis
|
|
|
|
|
|||
|
Other adjustments
|
|
|
|
|
|||
|
Elimination of expenses of Consolidated Funds
|
(
|
|
(
|
(
|
|||
|
$
(
|
$
|
$
|
$
|
||||
(c)
The Other Income (Loss) adjustment results from the Consolidated Funds that were eliminated in consolidation to
arrive at the Company’s total Other Income (Loss).
(d)
The following table is a reconciliation of Income (Loss) Before Provision for Income Taxes to Distributable Earnings
and to Fee Related Earnings:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
(Dollars in millions)
|
|||||||
|
Income (loss) before provision for income taxes
|
$
|
$
|
$
|
$
|
|||
|
Adjustments:
|
|||||||
|
Net unrealized performance and fee related performance revenues
|
|
(
|
|
(
|
|||
|
Unrealized principal investment (income) loss
|
|
(
|
(
|
(
|
|||
|
Equity-based compensation
(1)
|
|
|
|
|
|||
|
Acquisition or disposition-related charges, including amortization of intangibles
and impairment
|
|
|
|
|
|||
|
Tax (expense) benefit associated with certain foreign performance revenues
|
(
|
(
|
(
|
(
|
|||
|
Net income attributable to non-controlling interests in consolidated entities
|
(
|
(
|
(
|
(
|
|||
|
Other adjustments
(2)
|
|
|
|
|
|||
|
Distributable Earnings
|
$
|
$
|
$
|
$
|
|||
|
Realized performance revenues, net of related compensation
(3)
|
|
|
|
|
|||
|
Realized principal investment income
(3)
|
|
|
|
|
|||
|
Net interest
|
|
|
|
|
|||
|
Fee Related Earnings
|
$
|
$
|
$
|
$
|
|||
(1)
Equity-based compensation for the
three and nine months ended September 30, 2025
and
2024
included amounts that are
presented in principal investment income and general, administrative and other expenses in the Company’s condensed
consolidated statements of operations.
(2)
Includes charges (credits) related to Carlyle corporate actions and non-recurring items that affect period-to-period
comparability and are not reflective of the Company’s operating performance.
(3)
See reconciliation to most directly comparable U.S. GAAP measure below:
64
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Three Months Ended September 30, 2025
|
|||||
|
Carlyle
Consolidated
|
Adjustments
(4)
|
Total
Reportable
Segments
|
|||
|
(Dollars in millions)
|
|||||
|
Performance revenues
|
$
(
|
$
|
$
|
||
|
Performance revenues related compensation expense
|
(
|
|
|
||
|
Net performance revenues
|
$
(
|
$
|
$
|
||
|
Principal investment income (loss)
|
$
|
$
(
|
$
|
||
|
Nine Months Ended September 30, 2025
|
|||||
|
Carlyle
Consolidated
|
Adjustments
(4)
|
Total
Reportable
Segments
|
|||
|
(Dollars in millions)
|
|||||
|
Performance revenues
|
$
|
$
|
$
|
||
|
Performance revenues related compensation expense
|
|
|
|
||
|
Net performance revenues
|
$
(
|
$
|
$
|
||
|
Principal investment income (loss)
|
$
|
$
|
$
|
||
|
Three Months Ended September 30, 2024
|
|||||
|
Carlyle
Consolidated
|
Adjustments
(4)
|
Total
Reportable
Segments
|
|||
|
(Dollars in millions)
|
|||||
|
Performance revenues
|
$
|
$
(
|
$
|
||
|
Performance revenues related compensation expense
|
|
(
|
|
||
|
Net performance revenues
|
$
|
$
(
|
$
|
||
|
Principal investment income (loss)
|
$
|
$
(
|
$
|
||
|
Nine Months Ended September 30, 2024
|
|||||
|
Carlyle
Consolidated
|
Adjustments
(4)
|
Total
Reportable
Segments
|
|||
|
(Dollars in millions)
|
|||||
|
Performance revenues
|
$
|
$
(
|
$
|
||
|
Performance revenues related compensation expense
|
|
(
|
|
||
|
Net performance revenues
|
$
|
$
(
|
$
|
||
|
Principal investment income (loss)
|
$
|
$
(
|
$
|
||
(
4) Adjustments to performance revenues and principal investment income (loss) relate to (i) unrealized performance allocations
net of related compensation expense and unrealized principal investment income, which are excluded from the segment
results, (ii) amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were
included in the segment results, (iii) amounts attributable to non-controlling interests in consolidated entities, which were
excluded from the segment results, (iv) the reclassification of NGP performance revenues, which are included in principal
investment income in the U.S. GAAP financial statements, (v) the reclassification of fee related performance revenues, which
are included in fund level fee revenues in the segment results, and (vi) the reclassification of tax expenses associated with
certain foreign performance revenues. Adjustments to principal investment income (loss) also include the reclassification of
earnings for the investments in NGP Management and its affiliates to the appropriate operating captions for the segment
results, the exclusion of charges associated with the investment in NGP Management and its affiliates that are excluded from
the segment results and the exclusion of the principal investment loss from dilution of the indirect investment in Fortitude.
65
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
In
October
2025
, the Company’s Board of Directors declared a quarterly dividend of
$
0.35
per share of common stock to
common stockholders of record at the close of business on
November 10, 2025
, payable on
November 19, 2025
.
66
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Company’s financial position as of
September 30, 2025
and
December 31, 2024
and results of operations for the
three and nine
months ended September 30, 2025
and
2024
. The supplemental statement of cash flows is presented without effects of the
Consolidated Funds.
|
|
As of September 30, 2025
|
||||||
|
|
Consolidated
Operating
Entities
|
Consolidated
Funds
|
Eliminations
|
Consolidated
|
|||
|
|
(Dollars in millions)
|
||||||
|
Assets
|
|||||||
|
Cash and cash equivalents
|
$
|
$
|
$
|
$
|
|||
|
Cash and cash equivalents held at Consolidated Funds
|
|
|
|
|
|||
|
Investments, including accrued performance allocations of
$
|
|
|
(
|
|
|||
|
Investments of Consolidated Funds
|
|
|
|
|
|||
|
Due from affiliates and other receivables, net
|
|
|
(
|
|
|||
|
Due from affiliates and other receivables of Consolidated Funds, net
|
|
|
|
|
|||
|
Fixed assets, net
|
|
|
|
|
|||
|
Lease right-of-use assets, net
|
|
|
|
|
|||
|
Deposits and other
|
|
|
|
|
|||
|
Intangible assets, net
|
|
|
|
|
|||
|
Deferred tax assets
|
|
|
|
|
|||
|
Total assets
|
$
|
$
|
$
(
|
$
|
|||
|
Liabilities and equity
|
|||||||
|
Debt obligations
|
$
|
$
|
$
|
$
|
|||
|
Loans payable of Consolidated Funds
|
|
|
(
|
|
|||
|
Accounts payable, accrued expenses and other liabilities
|
|
|
|
|
|||
|
Accrued compensation and benefits
|
|
|
|
|
|||
|
Due to affiliates
|
|
|
|
|
|||
|
Deferred revenue
|
|
|
|
|
|||
|
Deferred tax liabilities
|
|
|
|
|
|||
|
Other liabilities of Consolidated Funds
|
|
|
(
|
|
|||
|
Lease liabilities
|
|
|
|
|
|||
|
Accrued giveback obligations
|
|
|
|
|
|||
|
Total liabilities
|
|
|
(
|
|
|||
|
Common stock
|
|
|
|
|
|||
|
Additional paid-in capital
|
|
|
(
|
|
|||
|
Retained earnings
|
|
|
|
|
|||
|
Accumulated other comprehensive loss
|
(
|
|
|
(
|
|||
|
Non-controlling interests in consolidated entities
|
|
|
|
|
|||
|
Total equity
|
|
|
(
|
|
|||
|
Total liabilities and equity
|
$
|
$
|
$
(
|
$
|
|||
67
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
As of December 31, 2024
|
|||||||
|
|
Consolidated
Operating
Entities
|
Consolidated
Funds
|
Eliminations
|
Consolidated
|
|||
|
|
(Dollars in millions)
|
||||||
|
Assets
|
|||||||
|
Cash and cash equivalents
|
$
|
$
|
$
|
$
|
|||
|
Cash and cash equivalents held at Consolidated Funds
|
|
|
|
|
|||
|
Investments, including accrued performance allocations of
$
|
|
|
(
|
|
|||
|
Investments of Consolidated Funds
|
|
|
|
|
|||
|
Due from affiliates and other receivables, net
|
|
|
(
|
|
|||
|
Due from affiliates and other receivables of Consolidated Funds, net
|
|
|
|
|
|||
|
Fixed assets, net
|
|
|
|
|
|||
|
Lease right-of-use assets, net
|
|
|
|
|
|||
|
Deposits and other
|
|
|
|
|
|||
|
Intangible assets, net
|
|
|
|
|
|||
|
Deferred tax assets
|
|
|
|
|
|||
|
Total assets
|
$
|
$
|
$
(
|
$
|
|||
|
Liabilities and equity
|
|||||||
|
Debt obligations
|
$
|
$
|
$
|
$
|
|||
|
Loans payable of Consolidated Funds
|
|
|
(
|
|
|||
|
Accounts payable, accrued expenses and other liabilities
|
|
|
|
|
|||
|
Accrued compensation and benefits
|
|
|
|
|
|||
|
Due to affiliates
|
|
|
|
|
|||
|
Deferred revenue
|
|
|
|
|
|||
|
Deferred tax liabilities
|
|
|
|
|
|||
|
Other liabilities of Consolidated Funds
|
|
|
(
|
|
|||
|
Lease liabilities
|
|
|
|
|
|||
|
Accrued giveback obligations
|
|
|
|
|
|||
|
Total liabilities
|
|
|
(
|
|
|||
|
Common stock
|
|
|
|
|
|||
|
Additional paid-in capital
|
|
|
(
|
|
|||
|
Retained earnings
|
|
|
|
|
|||
|
Accumulated other comprehensive loss
|
(
|
(
|
|
(
|
|||
|
Non-controlling interests in consolidated entities
|
|
|
|
|
|||
|
Total equity
|
|
|
(
|
|
|||
|
Total liabilities and equity
|
$
|
$
|
$
(
|
$
|
|||
68
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
|
Three Months Ended September 30, 2025
|
||||||
|
|
Consolidated
Operating
Entities
|
Consolidated
Funds
|
Eliminations
|
Consolidated
|
|||
|
|
(Dollars in millions)
|
||||||
|
Revenues
|
|||||||
|
Fund management fees
|
$
|
$
|
$
(
|
$
|
|||
|
Incentive fees
|
|
|
(
|
|
|||
|
Investment income
|
|||||||
|
Performance allocations
|
(
|
|
(
|
(
|
|||
|
Principal investment income
|
|
|
|
|
|||
|
Total investment income (loss)
|
(
|
|
|
(
|
|||
|
Interest and other income
|
|
|
(
|
|
|||
|
Interest and other income of Consolidated Funds
|
|
|
|
|
|||
|
Total revenues
|
|
|
(
|
|
|||
|
Expenses
|
|||||||
|
Compensation and benefits
|
|||||||
|
Cash-based compensation and benefits
|
|
|
|
|
|||
|
Equity-based compensation
|
|
|
|
|
|||
|
Performance allocations and incentive fee related compensation
|
(
|
|
|
(
|
|||
|
Total compensation and benefits
|
(
|
|
|
(
|
|||
|
General, administrative and other expenses
|
|
|
|
|
|||
|
Interest
|
|
|
|
|
|||
|
Interest and other expenses of Consolidated Funds
|
|
|
(
|
|
|||
|
Total expenses
|
|
|
(
|
|
|||
|
Other income
|
|||||||
|
Net investment income of Consolidated Funds
|
|
|
|
|
|||
|
Income (loss) before provision (benefit) for income taxes
|
(
|
|
|
|
|||
|
Provision (benefit) for income taxes
|
(
|
|
|
(
|
|||
|
Net income
|
|
|
|
|
|||
|
Net income attributable to non-controlling interests in consolidated
entities
|
|
|
|
|
|||
|
Net income attributable to The Carlyle Group Inc.
|
$
|
$
|
$
(
|
$
|
|||
69
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
|
Nine Months Ended September 30, 2025
|
||||||
|
|
Consolidated
Operating
Entities
|
Consolidated
Funds
|
Eliminations
|
Consolidated
|
|||
|
|
(Dollars in millions)
|
||||||
|
Revenues
|
|||||||
|
Fund management fees
|
$
|
$
|
$
(
|
$
|
|||
|
Incentive fees
|
|
|
(
|
|
|||
|
Investment income
|
|||||||
|
Performance allocations
|
|
|
(
|
|
|||
|
Principal investment income
|
|
|
|
|
|||
|
Total investment income
|
|
|
(
|
|
|||
|
Interest and other income
|
|
|
(
|
|
|||
|
Interest and other income of Consolidated Funds
|
|
|
|
|
|||
|
Total revenues
|
|
|
(
|
|
|||
|
Expenses
|
|||||||
|
Compensation and benefits
|
|||||||
|
Cash-based compensation and benefits
|
|
|
|
|
|||
|
Equity-based compensation
|
|
|
|
|
|||
|
Performance allocations and incentive fee related compensation
|
|
|
|
|
|||
|
Total compensation and benefits
|
|
|
|
|
|||
|
General, administrative and other expenses
|
|
|
|
|
|||
|
Interest
|
|
|
|
|
|||
|
Interest and other expenses of Consolidated Funds
|
|
|
(
|
|
|||
|
Other non-operating income
|
(
|
|
|
(
|
|||
|
Total expenses
|
|
|
(
|
|
|||
|
Other income
|
|||||||
|
Net investment
income
of Consolidated Funds
|
|
|
|
|
|||
|
Income before provision for income taxes
|
|
|
(
|
|
|||
|
Provision for income taxes
|
|
|
|
|
|||
|
Net income
|
|
|
(
|
|
|||
|
Net income attributable to non-controlling interests in consolidated
entities
|
|
|
|
|
|||
|
Net income attributable to The Carlyle Group Inc.
|
$
|
$
|
$
(
|
$
|
|||
70
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Three Months Ended September 30, 2024
|
|||||||
|
Consolidated
Operating
Entities
|
Consolidated
Funds
|
Eliminations
|
Consolidated
|
||||
|
(Dollars in millions)
|
|||||||
|
Revenues
|
|||||||
|
Fund management fees
|
$
|
$
|
$
(
|
$
|
|||
|
Incentive fees
|
|
|
(
|
|
|||
|
Investment income
|
|||||||
|
Performance allocations
|
|
|
(
|
|
|||
|
Principal investment income
|
|
|
(
|
|
|||
|
Total investment income
|
|
|
(
|
|
|||
|
Interest and other income
|
|
|
(
|
|
|||
|
Interest and other income of Consolidated Funds
|
|
|
|
|
|||
|
Total revenues
|
|
|
(
|
|
|||
|
Expenses
|
|||||||
|
Compensation and benefits
|
|||||||
|
Cash-based compensation and benefits
|
|
|
|
|
|||
|
Equity-based compensation
|
|
|
|
|
|||
|
Performance allocations and incentive fee related compensation
|
|
|
|
|
|||
|
Total compensation and benefits
|
|
|
|
|
|||
|
General, administrative and other expenses
|
|
|
|
|
|||
|
Interest
|
|
|
|
|
|||
|
Interest and other expenses of Consolidated Funds
|
|
|
|
|
|||
|
Other non-operating income
|
(
|
|
|
(
|
|||
|
Total expenses
|
|
|
|
|
|||
|
Other income
|
|||||||
|
Net investment income of Consolidated Funds
|
|
|
|
|
|||
|
Income before provision for income taxes
|
|
|
(
|
|
|||
|
Provision for income taxes
|
|
|
|
|
|||
|
Net income
|
|
|
(
|
|
|||
|
Net income attributable to non-controlling interests in consolidated
entities
|
|
|
|
|
|||
|
Net income attributable to The Carlyle Group Inc.
|
$
|
$
|
$
(
|
$
|
|||
71
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
Nine Months Ended September 30, 2024
|
|||||||
|
|
Consolidated
Operating
Entities
|
Consolidated
Funds
|
Eliminations
|
Consolidated
|
|||
|
|
(Dollars in millions)
|
||||||
|
Revenues
|
|||||||
|
Fund management fees
|
$
|
$
|
$
(
|
$
|
|||
|
Incentive fees
|
|
|
(
|
|
|||
|
Investment income
|
|||||||
|
Performance allocations
|
|
|
(
|
|
|||
|
Principal investment income
|
|
|
(
|
|
|||
|
Total investment income
|
|
|
(
|
|
|||
|
Interest and other income
|
|
|
(
|
|
|||
|
Interest and other income of Consolidated Funds
|
|
|
|
|
|||
|
Total revenues
|
|
|
(
|
|
|||
|
Expenses
|
|||||||
|
Compensation and benefits
|
|||||||
|
Cash-based compensation and benefits
|
|
|
|
|
|||
|
Equity-based compensation
|
|
|
|
|
|||
|
Performance allocations and incentive fee related compensation
|
|
|
|
|
|||
|
Total compensation and benefits
|
|
|
|
|
|||
|
General, administrative and other expenses
|
|
|
|
|
|||
|
Interest
|
|
|
|
|
|||
|
Interest and other expenses of Consolidated Funds
|
|
|
(
|
|
|||
|
Other non-operating income
|
(
|
|
|
(
|
|||
|
Total expenses
|
|
|
(
|
|
|||
|
Other income (loss)
|
|||||||
|
Net investment
loss
of Consolidated Funds
|
|
(
|
|
(
|
|||
|
Income before provision for income taxes
|
|
|
(
|
|
|||
|
Provision for income taxes
|
|
|
|
|
|||
|
Net income
|
|
|
(
|
|
|||
|
Net income attributable to non-controlling interests in consolidated
entities
|
|
|
|
|
|||
|
Net income attributable to The Carlyle Group Inc.
|
$
|
$
|
$
(
|
$
|
|||
72
The Carlyle Group Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
|
Nine Months Ended September 30,
|
||
|
|
2025
|
2024
|
|
|
|
(Dollars in millions)
|
||
|
Cash flows from operating activities
|
|||
|
Net income
|
$
|
$
|
|
|
Adjustments to reconcile net income to net cash flows from operating activities:
|
|||
|
Depreciation and amortization
|
|
|
|
|
Equity-based compensation
|
|
|
|
|
Non-cash performance allocations and incentive fees
|
|
(
|
|
|
Non-cash principal investment (income) loss
|
(
|
(
|
|
|
Other non-cash amounts
|
|
|
|
|
Purchases of investments
|
(
|
(
|
|
|
Proceeds from the sale of investments
|
|
|
|
|
Payments of contingent consideration
|
(
|
(
|
|
|
Change in deferred taxes, net
|
(
|
|
|
|
Change in due from affiliates and other receivables
|
(
|
(
|
|
|
Change in deposits and other
|
(
|
(
|
|
|
Change in accounts payable, accrued expenses and other liabilities
|
|
|
|
|
Change in accrued compensation and benefits
|
(
|
(
|
|
|
Change in due to affiliates
|
|
(
|
|
|
Change in lease right-of-use assets and lease liabilities
|
(
|
(
|
|
|
Change in deferred revenue
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
Cash flows from investing activities
|
|||
|
Purchases of corporate treasury investments
|
|
(
|
|
|
Proceeds from corporate treasury investments
|
|
|
|
|
Purchases of fixed assets, net
|
(
|
(
|
|
|
Net cash used in investing activities
|
(
|
(
|
|
|
Cash flows from financing activities
|
|||
|
Borrowings under credit facilities
|
|
|
|
|
Repayments under credit facilities
|
|
(
|
|
|
Issuance of
|
|
|
|
|
Payments on CLO borrowings
|
(
|
(
|
|
|
Proceeds from CLO borrowings, net of financing costs
|
|
|
|
|
Dividends to common stockholders
|
(
|
(
|
|
|
Payment of deferred consideration for Carlyle Holdings units
|
|
(
|
|
|
Contributions from non-controlling interest holders
|
|
|
|
|
Distributions to non-controlling interest holders
|
(
|
(
|
|
|
Common shares repurchased and net share settlement of equity-based awards
|
(
|
(
|
|
|
Change in due to/from affiliates financing activities
|
|
|
|
|
Net cash used in financing activities
|
|
(
|
|
|
Effect of foreign exchange rate changes
|
|
|
|
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
|
(
|
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
|
|
|
|
Cash, cash equivalents and restricted cash, end of period
|
$
|
$
|
|
|
Reconciliation of cash, cash equivalents and restricted cash, end of period:
|
|||
|
Cash and cash equivalents
|
$
|
$
|
|
|
Restricted cash
|
|
|
|
|
Total cash, cash equivalents and restricted cash, end of period
|
$
|
$
|
|
|
Cash and cash equivalents held at Consolidated Funds
|
$
|
$
|
|
73
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless context suggests otherwise, references in this Quarterly Report on Form 10-Q to “Carlyle,” the “Company,”
“we,” “us,” and “our” refer to The Carlyle Group Inc. and its consolidated subsidiaries. The following discussion and
analysis should be read in conjunction with the consolidated financial statements and the related notes included in this
Quarterly Report on Form 10-Q and the Annual Report on Form 10-K for the year ended
December 31, 2024
.
Overview
We are one of the world’s largest global investment firms and deploy private capital across our business. We conduct our
operations through three reportable segments: Global Private Equity, Global Credit, and Carlyle AlpInvest (formerly, Global
Investment Solutions).
•
Global Private Equity
— Our Global Private Equity segment advises our buyout, growth, real estate, and infrastructure &
natural resources funds. The segment also includes the NGP Carry Funds advised by NGP. As of
September 30, 2025
, our
Global Private Equity segment had
$163 billion
in AUM and
$101 billion
in Fee-earning AUM.
•
Global Credit
— Our Global Credit segment advises funds and vehicles that pursue investment strategies including
insurance solutions, liquid credit, opportunistic credit, direct lending, asset-backed finance, aviation finance, infrastructure
credit, cross-platform credit products, and global capital markets. As of
September 30, 2025
, our Global Credit segment
had
$208 billion
in AUM and
$167 billion
in Fee-earning AUM.
•
Carlyle AlpInvest
— Our Carlyle AlpInvest segment advises global private equity programs that pursue secondary
purchases and financing of existing portfolios, managed co-investment programs, and primary fund investments. As of
September 30, 2025
, our Carlyle AlpInvest segment had
$102 billion
in AUM and
$64 billion
in Fee-earning AUM.
We earn management fees pursuant to contractual arrangements with the investment funds that we manage and fees for
transaction advisory and oversight services provided to portfolio companies of these funds. We also typically receive a
performance fee from an investment fund, which may be either an incentive fee or a special residual allocation of income,
which we refer to as a performance allocation, or carried interest, in the event that specified investment returns are achieved by
the fund. Under U.S. generally accepted accounting principles (“U.S. GAAP”), we are required to consolidate some of the
investment funds that we advise. However, for segment reporting purposes, we present revenues and expenses on a basis that
deconsolidates these investment funds. Refer to Note
15
,
Segment Reporting
, to the condensed consolidated financial
statements included in this Quarterly Report on Form 10-Q for more information on the differences between our financial
results reported pursuant to U.S. GAAP and our financial results for segment reporting purposes.
74
Our Global Investment Offerings
The following table provides a breakout of the product offerings and related acronyms included in our total assets under
management of
$474 billion
as of
September 30, 2025
for each of our three global business segments (in billions):
|
Global Private Equity
|
$
163.4
|
Global Credit
|
$
208.5
|
|
|
Corporate Private Equity
|
$
104.8
|
Insurance Solutions
4
|
$
87.0
|
|
|
U.S. Buyout (CP)
|
51.8
|
Liquid Credit
|
$
49.4
|
|
|
Asia Buyout (CAP)
|
11.6
|
U.S. CLOs
|
34.4
|
|
|
Europe Buyout (CEP)
|
10.4
|
Europe CLOs
|
10.4
|
|
|
Carlyle Global Partners (CGP)
|
6.8
|
CLO Investment Products
|
2.6
|
|
|
Europe Technology (CETP)
|
6.1
|
Revolving Credit
|
2.0
|
|
|
Japan Buyout (CJP)
|
6.1
|
Private Credit
|
$
72.1
|
|
|
U.S. Growth (CP Growth / CEOF)
|
3.2
|
Opportunistic Credit (CCOF / CSP)
|
20.3
|
|
|
Life Sciences (ABV / ACCD)
|
2.2
|
Direct Lending
5
|
12.9
|
|
|
Asia Growth (CAP Growth / CAGP)
|
1.2
|
Aviation Finance (SASOF / CALF)
|
12.3
|
|
|
Other
1
|
5.5
|
Cross-Platform Credit (incl. CTAC)
|
9.8
|
|
|
Real Estate
|
$
36.1
|
Asset-Backed Finance
|
9.7
|
|
|
U.S. Real Estate (CRP)
|
25.3
|
Infrastructure Credit (CICF)
|
6.7
|
|
|
Core Plus Real Estate (CPI)
|
8.2
|
Other
6
|
0.5
|
|
|
International Real Estate (CER)
|
2.5
|
|||
|
Infrastructure & Natural Resources
|
$
22.5
|
Carlyle AlpInvest
|
$
102.1
|
|
|
NGP Energy
2
|
10.7
|
Secondaries and Portfolio Finance (ASF / ASPF)
|
$
45.5
|
|
|
Infrastructure and Renewable Energy
3
|
6.4
|
Co-Investments (ACF)
|
$
25.2
|
|
|
International Energy (CIEP)
|
5.4
|
Primary Investments & Other
7
|
$
31.5
|
|
Note: All amounts shown represent total assets under management as of
September 30, 2025
, and totals may not sum due to rounding. In
addition, certain carry funds included herein may not be included in fund performance if they have not made an initial capital call or
commenced investment activity.
(1)
Includes our Financial Services (CGFSP), Sub-Saharan Africa Buyout (CSSAF), South America Buyout (CSABF), Peru Buyout (CPF),
MENA Buyout and Ireland Buyout (CCIF) funds, as well as platform accounts which invest across Corporate Private Equity strategies.
(2)
NGP Energy funds are advised by NGP Energy Capital Management, LLC, a separately registered investment adviser. We do not serve as
an investment adviser to those funds.
(3)
Includes our Infrastructure (CGIOF), Renewable Energy (CRSEF), and Power funds (CPP / CPOCP).
(4)
Includes Carlyle FRL, capital raised from strategic third-party investors which directly invest in Fortitude alongside Carlyle FRL, as well
as the fair value of the general account assets covered by the strategic advisory services agreement with Fortitude.
(5)
Includes our business development companies (CGBD / CARS) and our evergreen fund (CDLF).
(6)
Includes our Energy Credit (CEMOF) and Real Estate Credit (CNLI) funds.
(7)
Includes Carlyle AlpInvest Private Markets (CAPM), Carlyle AlpInvest Private Markets Secondaries (CAPS), and Mezzanine funds
.
Trends Affecting our Business
The third quarter of 2025 was one of continued optimism across markets. In the U.S., the S&P 500 and NASDAQ
sustained their upward climb, returning 8% and 11%,
respectively
. Broad enthusiasm for AI continues to drive sharp price
action, with just ten stocks accounting for 40% of U.S. stock market capitalization, the highest degree of concentration on
record. Moreover, eight of those companies operate in roughly the same sector and the earnings prospects of seven of them are
highly leveraged to AI. Relatively modest declines in data center capacity utilization, or extensions of AI monetization
timelines, could be enough to shift major stock market indexes. Stocks also performed well elsewhere. European stocks had a
better third quarter than
second quarter,
with the Euro Stoxx 50 up over 4%, compared to a 1% return in the respective periods;
meanwhile the Shanghai Composite and Nikkei 225 returned 13% and 11%, respectively, in the third quarter.
As of the end of the third quarter, U.S. public equity multiples were
20
–
30%
above their 10-year average. Since the
pandemic, stock performance has become more divorced from traditional business quality metrics, such as top-line growth,
profit margins, and the stability of earnings over the cycle. Over the past five years, investors would have outperformed a
quality long portfolio by shorting a basket of stocks of the highest quality businesses, a notable inversion of historical patterns.
Much of this change is the result of the prevalence in public markets of both passive fund flows and short-term oriented retail
investors. The reduced role of institutional active investing as a share of overall public market activity has dampened
meaningful price discovery. By contrast, the frictions associated with exiting positions help to insulate private markets from
75
similar effects. With transaction prices set on the basis of underwritten return expectations over multiyear holding periods,
private markets abide by arithmetic constraints absent from listed markets. These constraints help to ensure that prices remain
tied to fundamentals, rather than liquidity flows, and that returns stem from earnings growth, rather than short-horizon
momentum. This discipline has been reflected in ongoing private equity transactions; across the U.S. buyout universe, median
purchase price multiples are still in line with the 10-year historical average.
Our proprietary portfolio data indicate U.S. economic underlying growth is resilient and expanded at an annualized rate
of roughly 2.7% in the third quarter. Household spending regained momentum, dominated by higher income households
buoyed by a surging stock market and insulated from higher rates through mortgages fixed at below-market rates. Growth was
also supported by business investment, which advanced at an annualized rate of nearly 5% over the quarter, powered by a
concentrated surge in AI‑related outlays. This includes investments spanning data center construction, graphics processing unit
(GPU) and server procurement, spending on related applications, and power and generation capacity. These investments—
though a relatively small slice of gross domestic product (GDP)—account for roughly
30–40%
of overall growth. Crucially, the
financing mix skews heavily toward internally‑generated cash flows from mega‑cap technology firms, limiting the exposure to
higher interest rates.
Despite a steady economic outlook in the U.S., our portfolio data suggest that U.S. job growth has slowed with monthly
payroll gains during the third quarter averaging only
15,000–20,000
. This slowdown may reflect both the impact of narrower
operating margins—likely due to tariffs—as well as a shrinking labor supply. Though most analysts assumed that the cost of
tariffs would manifest as higher consumer prices, inflation rates across affected categories have not yet matched what would be
implied by tariff revenue as some companies have absorbed higher tariffs in fear of weakened demand resulting from price
increases. At the same time, the shift to tighter immigration policy has sharply reduced U.S. labor force growth, with net
immigration near zero this year. Given that the domestic population is expected to grow just 14 basis points in 2025, only
modest monthly job gains are needed to maintain full employment. If the Federal Reserve interprets a labor-supply shortfall as a
sign of weak demand and cuts rates too aggressively, it could trigger wage-price pressures in 2026.
In Europe, the fiscal expansion in Germany has not yet been reflected in industrial order books, which continue to
contract. The trend over the past six months has not moved in the direction one might have hoped when the German
government announced its €500 billion fiscal package in the first quarter of 2025. In Asia, our data suggest that domestic
consumption in China is growing at its slowest pace in two years despite an improving outlook for China’s manufacturing
sector, where output appears to be growing at a 6.5% annual rate as exports once destined for the U.S. are channeled to other
markets. Our India portfolio data suggest domestic business volumes strengthened in the third quarter of 2025, with annual
growth averaging 7% over the quarter. While the increase in U.S. tariffs seems likely to reduce merchandise exports, the
domestic economy should benefit from the recently enacted Goods and Services Tax reform, which reduces domestic prices on
nearly 90% of goods, including an estimated 6% decline in the average price of discretionary consumer items.
Global mergers and acquisitions (M&A) activity gained momentum in the third quarter of 2025, with year-to-date dollar
volumes nearly matching full-year 2024 levels. Transactions totaled about $1.3 trillion in the third quarter, up 21% from the
prior quarter and 42% from a year ago. However, the number of deals fell about 12% year-over-year as larger transactions
drove overall volume. Similarly, while general partners (GPs) announced $241 billion in leveraged buyouts during the quarter
—the highest total since 2007 and 72% higher than a year earlier—deal counts remained well below the average pace of the
2021–2022 post-pandemic boom, with just 10 transactions accounting for nearly two-thirds of the total volume.
Despite blockbuster dollar volumes, buyout exits remain muted. Exit dollar volumes totaled $101 billion, roughly flat
versus the prior quarter and down 7% year-over-year, with one transaction representing about 20% of the total. However, while
cumulative net outflows since early 2022 (when they first turned negative) remain significant at $(135) billion, data through the
second quarter of 2025, the latest quarter for which data are available, indicate global buyout funds have now recorded five
consecutive quarters of non-negative net distributions. The initial public offering (IPO) market showed strength in the third
quarter, with 28 U.S. exchange-listed offerings raising $15.5 billion—the highest level of activity in terms of both transactions
and volumes since late 2021—though most were concentrated in software, pharma/health-tech, and AI-related sectors. The
continued backdrop of fewer transactions, slower exits, and constrained liquidity creates an attractive environment for
secondaries strategies, which have historically performed well when the private equity market slows.
In the aftermath of the Tricolor Auto Group and First Brands Group bankruptcies in September of 2025, fears have risen
around the quality of underlying assets in the syndicated loan and private credit markets. Business
development
companies
(BDCs) have
underperformed the broader
equity market since July, and firms and funds with the greatest exposure to First
Brands have seen their prices fall substantially in the aftermath. In fact, private credit default rates have seen a recent trend of
improvement in 2025 after climbing in 2024 and excess demand for leveraged loans and credit over the available supply has
pushed high yield credit spreads to post-global financial crisis lows. Risk premiums for leveraged finance are exceedingly tight.
76
Portfolio finance’s unique structure of over-collateralization and
sizable
asset diversification may help to meaningfully mitigate
default risk and enhance capital preservation. Within our Global Credit portfolio, credit quality remains healthy. As of
September 30, 2025
, the non-accrual rate across our entire direct lending platform is nearly half of the market-wide direct
lending non-accrual rate, and default rates in our U.S. CLO business are 40% of the market level.
Our investment activity in the third quarter of 2025 reflected trends in the broader markets. We deployed
$11.8 billion
across our platform and realized proceeds of
$6.1 billion
in our traditional carry funds during the third quarter. Our carry fund
portfolio appreciated
2%
in the
third
quarter, continuing to show relative stability against a backdrop of volatility in the global
equity markets. Within our Global Private Equity segment in the
third
quarter, our corporate private equity funds were flat as
market price decreases in certain publicly traded positions offset appreciation elsewhere, our infrastructure & natural resources
funds appreciated
5%
, and our real estate funds appreciated
1%
. Our Global Credit carry funds, which represent approximately
11%
of the total Global Credit remaining fair value as of
September 30, 2025
, appreciated
4%
in the
third
quarter. Carry funds
in our Carlyle AlpInvest segment appreciated
2%
in the
third
quarter.
We had
$16.9 billion
in inflows in the
third
quarter of 2025 and
$58.7 billion
in inflows over the last twelve months as of
September 30, 2025
, continuing the momentum from the first half of the year against a backdrop of significant market
uncertainty. Our inflows during the third quarter included
$3 billion
in our evergreen wealth products, which continue to be an
area of strategic focus.
The ongoing U.S. federal government shutdown has introduced meaningful uncertainty into capital markets and
regulatory workflows. While we have not experienced material impact in our portfolio to date as a result, we are monitoring the
potential impact a prolonged shutdown could have on our investment activity, including potentially postponing planned
realization activity such as initial public offerings or delaying deal pipelines as regulatory agencies operate at reduced capacity.
Recent Developments
Dividends
In
October
2025, our Board of Directors declared a quarterly dividend of
$0.35
per share to common stockholders of
record at the close of business on
November 10, 2025
, payable on
November 19, 2025
.
Senior Note Issuance
In September 2025, we issued $800.0 million of
5.050%
senior notes due 2035. See Note
6
,
Borrowings
, to the
condensed consolidated financial statements for further information.
77
Key Financial Measures
Our key financial measures and operating metrics are discussed in the following pages. Additional information regarding
U.S. GAAP measures and our other significant accounting policies can be found in Note
2
,
Summary of Significant Accounting
Policies
, to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Revenues
Revenues primarily consist of Fund management fees, Incentive fees, Investment income (including Performance
allocations, realized and unrealized gains of our investments in our funds, and other principal investments), as well as Interest
and other income.
Fund management fees
. Fund management fees include management fees and transaction and portfolio advisory fees. We
earn management fees for advisory services we provide to funds in which we hold a general partner interest or to funds or
certain portfolio companies with which we have an investment advisory or investment management agreement. These fees are
largely from either traditional closed-end, long-dated funds, which are highly predictable and stable, or Perpetual Capital
products as defined below. Management fees also include catch-up management fees, which are episodic in nature and
represent management fees charged to fund investors in subsequent closings of a fund which apply to the time period between
the fee initiation date and the subsequent closing date. We also earn management fees on our CLOs and other structured
products.
Transaction and portfolio advisory fees generally include capital markets fees generated by Carlyle Global Capital
Markets in connection with activities related to the underwriting, issuance and placement of debt and equity securities, and loan
syndication for our portfolio companies and third-party clients, which are generally not subject to rebate offsets as described
below with respect to our most recent vintages (but are subject to the rebate offsets set forth below for older funds).
Underwriting fees include gains, losses, and fees arising from securities offerings in which we participate in the underwriter
syndicate.
Transaction and portfolio advisory fees also include fees we receive for the transaction and portfolio advisory services we
provide to our portfolio companies. When covered by separate contractual agreements, we recognize transaction and portfolio
advisory fees for these services when the performance obligation has been satisfied and collection is reasonably assured. We are
generally required to offset our fund management fees by the transaction and advisory fees earned, which we refer to as “rebate
offsets.”
The recognition of portfolio advisory fees, transactions fees, and capital markets fees can be volatile as they are primarily
generated by investment activity within our funds, and therefore are impacted by our investment pace or other capital
transactions at our portfolio companies.
Incentive fees
. Incentive fees consist of performance-based incentive arrangements pursuant to management contracts,
primarily from certain of our Global Credit funds, when the return on assets under management exceeds certain benchmark
returns or other performance targets. In such arrangements, incentive fees are recognized when the performance benchmark has
been achieved.
Investment income (loss)
.
Investment income (loss)
consists of our performance allocations as well as the realized and
unrealized gains and losses resulting from our equity method investments and other principal investments.
Performance allocations consist principally of the performance-based capital allocation from fund limited partners to us,
commonly referred to as carried interest, from certain of our investment funds, which we refer to as the “carry funds.” Carried
interest revenue is recognized by Carlyle upon appreciation of the valuation of our funds’ investments above certain return
hurdles as set forth in each respective partnership agreement and is based on the amount that would be due to us pursuant to the
fund partnership agreement at each period end as if the funds were liquidated at such date. Accordingly, the amount of carried
interest recognized as performance allocations reflects our share of the fair value gains and losses of the associated funds’
underlying investments measured at their then-current fair values relative to the fair values as of the end of the prior period. As
a result, the performance allocations earned in an applicable reporting period are not indicative of any future period, as fair
values are based on conditions prevalent as of the reporting date. Refer to “—Trends Affecting our Business” for further
discussion.
For any given period, performance allocations revenue on our statement of operations may include reversals of previously
recognized performance allocations due to a decrease in the value of a particular fund that results in a decrease of cumulative
78
performance allocations earned to date. Since fund return hurdles are cumulative, previously recognized performance
allocations also may be reversed in a period of appreciation that is lower than the particular fund’s hurdle rate. Additionally,
unrealized performance allocations reverse when performance allocations are realized, and unrealized performance allocations
can be negative if the amount of realized performance allocations exceed total performance allocations generated in the period.
The timing and receipt of realized performance allocations varies with the lifecycle of our carry funds and there is often a
difference between the time we start accruing performance allocations and realization. The timing of performance allocation
realizations from our Carlyle AlpInvest, Carlyle Aviation, and Abingworth funds is typically later than in our other carry funds
based on the terms of such arrangements.
Under our arrangements with the historical owners and management teams of AlpInvest and Abingworth, the amount of
carried interest to which we are entitled varies. In some cases, we are entitled to 15% of the carried interest in respect of
commitments from the historical owners of AlpInvest for the period between 2011 and 2020. In certain instances, carried
interest associated with the AlpInvest fund vehicles is subject to entity level income taxes in the Netherlands. Additionally, in
connection with the acquisition of Abingworth, we are entitled to 15% of carried interest generated from certain Abingworth
funds.
Realized carried interest may be clawed back or given back to the fund if the fund’s investment values decline below
certain return hurdles, which vary from fund to fund. This amount is known as the “giveback obligation.” In all cases, each
investment fund is considered separately in evaluating carried interest and potential giveback obligations. See Note
8
,
Commitments and Contingencies
, for more information.
Accrued performance allocations and accrued giveback obligations at a point in time assume a hypothetical liquidation of
the funds’ investments at their then current fair values. Each investment fund is considered separately in evaluating carried
interest and potential giveback obligations. These assets and liabilities will continue to fluctuate in accordance with the fair
values of the funds’ investments until they are realized. The Company uses “net accrued performance revenues” to refer to the
aggregation of the accrued performance allocations net of (i) accrued giveback obligations, (ii) accrued performance allocations
related compensation, (iii) performance allocations related tax obligations, and (iv) accrued performance allocations attributable
to non-controlling interests. Net accrued performance revenues exclude any net accrued performance allocations and incentive
fees that have been realized but will be collected in subsequent periods, as well as net accrued performance revenues which are
presented as fee related performance revenues when realized in our non-GAAP financial measures. Realized performance
allocation-related compensation that has not yet been paid is also excluded from our net accrued performance allocations.
In addition, realized performance allocations may be reversed in future periods to the extent that such amounts become
subject to a giveback obligation. The aggregate amount of giveback obligations realized since Carlyle’s inception totaled
$257.0 million
,
$175.6 million
of which was related to various Legacy Energy Funds. Given that current and former senior
Carlyle professionals and other limited partners of the Carlyle Holdings partnerships are responsible for paying the majority of
the realized giveback obligation, only
$87.1 million
of the
$257.0 million
aggregate giveback obligation realized since
inception was attributable to Carlyle. The realization of giveback obligations for the Company’s portion of such obligations
reduces Distributable Earnings in the period realized. Further, each individual who holds equity interests in carried interest
generated by our funds and is a recipient of realized carried interest typically signs a guarantee agreement or partnership
agreement that personally obligates such person to return his/her pro rata share of any amounts of realized carried interest
previously distributed that are later clawed back. Accordingly, carried interest as performance allocation compensation is
subject to return to the Company in the event a giveback obligation is funded. Generally, the actual giveback liability, if any,
does not become due until the end of a fund’s life.
In addition, in our discussion of our non-GAAP results, we use the term “realized net performance revenues” to refer to
realized performance allocations and incentive fees from our funds, net of the portion allocated to our investment professionals,
and other employees and certain tax expenses associated with carried interest attributable to certain partners and employees,
which are reflected as realized performance allocations and incentive fees related compensation expense. See “—Non-GAAP
Financial Measures” and “—Segment Analysis” for the amount of realized net performance revenues recognized each period
and related discussion.
Investment income also represents the realized and unrealized gains and losses on our principal investments, including
our investments in Carlyle funds that are not consolidated, and our strategic investments in NGP as described below. Realized
principal investment income (loss) is recorded when we redeem all or a portion of our investment or when we receive or are due
cash income, such as dividends or distributions. A realized principal investment loss is also recorded when an investment is
deemed to be permanently impaired or worthless. Unrealized principal investment income (loss) results from changes in the fair
value of the underlying investment, as well as the reversal of previously recognized unrealized gains (losses) at the time an
investment is realized.
79
We account for our investments in NGP under the equity method of accounting. Our investments in NGP include the
equity interests in NGP Management and the general partners of certain carry funds advised by NGP. Following the
restructuring of the terms of our strategic investment in NGP (the “Restructuring”), our equity interests in NGP Management
entitle us to an allocation of income equal to 55.0% of the management fee related revenues earned by NGP Management for
existing funds, and up to 55.0% for all NGP funds that held an initial closing after December 31, 2024, including all
management fees being retained by NGP for the years 2025 through 2028 on such future NGP funds. Our investment in the
general partners of the NGP Carry Funds entitle us to up to 47.5% of the performance allocations received from NGP fund
general partners. For further information regarding our strategic investments in NGP and the Restructuring, refer to Note
4
,
Investments
, to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
We record investment income (loss) for our equity income allocation from NGP management fee related revenues and
our share of any allocated expenses from NGP Management, as well as expenses associated with the compensatory elements of
the strategic investment and any impairment charges. We also record our equity income allocation from NGP performance
allocations in principal investment income (loss) from equity method investments rather than performance allocations in our
condensed consolidated statements of operations. We do not control or manage NGP. Moreover, we do not operate NGP’s
business, have representation on NGP’s board or serve as an investment advisor to any investment fund sponsored by NGP, nor
do we direct the operations of any of NGP’s portfolio companies. While we have consent rights over certain major actions by
NGP outside of the ordinary course of NGP’s business (including, for example, consent rights over items such as amendments
to the organizational documents of the entity in which we are invested, changes to the management fee streams earned by NGP
under its fund agreements, or the incurrence of certain debt by NGP and other similar items), we have no voting rights or
consent rights on any NGP investment committee that selects investments to be made by NGP funds.
Interest and other income
.
Interest and other income
primarily represents reimbursement of certain costs incurred on
behalf of our funds, as well as interest income that we earn such as from our cash and money market accounts and other
investments, including CLO senior and subordinated notes.
Interest and other income of Consolidated Funds
.
Interest and other income of Consolidated Funds
primarily represents
the interest earned on assets of consolidated CLOs.
Net investment income (loss) of Consolidated Funds
.
Net investment income (loss) of Consolidated Funds
generally
measures the change in the difference in fair value between the assets and the liabilities of the Consolidated Funds. Income
(loss) indicates that the fair value of the assets of the Consolidated Funds appreciated more (less), or depreciated less (more),
than the fair value of the liabilities of the Consolidated Funds. Income or loss is not necessarily indicative of the investment
performance of the Consolidated Funds and does not impact the management or incentive fees received by Carlyle for its
management of the Consolidated Funds. The portion of the net investment income (losses) of Consolidated Funds attributable
to the limited partner investors is allocated to non-controlling interests. Therefore, income or loss is not expected to have a
material impact on the revenues or profitability of the Company. Moreover, although the assets of the Consolidated Funds are
consolidated onto our balance sheet pursuant to U.S. GAAP, ultimately we do not have recourse to such assets and such
liabilities are generally non-recourse to us. Therefore, income or loss from the Consolidated Funds generally does not impact
the assets available to our common stockholders.
Expenses
Compensation and benefits
. Compensation includes salaries, bonuses, equity-based compensation, and performance
payment arrangements. Bonuses are accrued over the service period to which they relate.
We recognize as compensation expense the portion of performance allocations and incentive fees that are due to our
employees, senior Carlyle professionals, advisors, and operating executives in a manner consistent with how we recognize the
performance allocations and incentive fee revenue. These amounts are accounted for as compensation expense in conjunction
with the related performance allocations and incentive fee revenue and, until paid, are recognized as a component of the accrued
compensation and benefits liability. Compensation in respect of performance allocations and incentive fees is paid when the
related performance allocations and incentive fees are realized, and not when such performance allocations and incentive fees
are accrued. The funds do not have a uniform allocation of performance allocations and incentive fees to our employees, senior
Carlyle professionals, advisors, and operating executives. However, we generally allocate a range of 60% to 70% of
performance allocations and incentive fees to our employees.
In addition, we have implemented various equity-based compensation arrangements that require senior Carlyle
professionals and other employees to provide services over a service period of generally one year to four years in order to vest
in the applicable equity interests, which under U.S. GAAP will result in compensation charges over current and future periods.
80
In certain of our equity-based compensation arrangements, vesting is based on the achievement of certain performance targets
or market conditions (see Note
14
,
Equity-Based Compensation
, for additional information). Compensation charges associated
with all equity-based compensation grants are excluded from Fee Related Earnings and Distributable Earnings.
We may hire additional individuals and overall compensation levels may correspondingly increase, which could result in
an increase in compensation and benefits expense. As a result of prior acquisitions, we have charges associated with contingent
consideration taking the form of earn-outs and profit participation, some of which are reflected as compensation expense.
General, administrative and other expenses
.
General, administrative and other expenses
include occupancy and
equipment expenses and other expenses, which consist principally of professional fees, including those related to our global
regulatory compliance program, external costs of fundraising, travel and related expenses, communications and information
services, depreciation and amortization (including intangible asset amortization and impairment), bad debt expense, and foreign
currency transactions. We expect that general, administrative and other expenses will vary due to infrequently occurring or
unusual items, such as impairment of intangible assets or lease right-of-use assets and expenses or insurance recoveries
associated with litigation and contingencies. Also, in periods of significant fundraising, to the extent that we use third parties to
assist in our fundraising efforts, our general, administrative and other expenses may increase accordingly. Similarly, our
general, administrative and other expenses may increase as a result of professional and other fees incurred as part of due
diligence related to strategic acquisitions and new product development. Additionally, we anticipate that general, administrative
and other expenses will fluctuate from period to period due to the impact of foreign exchange transactions.
Interest and other expenses of Consolidated Funds
.
Interest and other expenses of Consolidated Funds
consist primarily
of interest expense related primarily to loans of consolidated CLOs, professional fees and other third-party expenses.
Income taxes
. Income taxes are accounted for using the asset and liability method of accounting. Under this method,
deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying
amounts of assets and liabilities and their respective tax basis, using currently enacted tax rates. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period in which the change is enacted. Deferred tax
assets are reduced by a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be
realized.
Non-controlling Interests in Consolidated Entities
. Non-controlling interests in consolidated entities represent the
component of equity in consolidated entities not held by us. These interests are adjusted for general partner allocations.
Earnings Per Common Share
.
We compute earnings per common share in accordance with ASC 260,
Earnings Per
Share
. Basic earnings per common share is calculated by dividing net income (loss) attributable to the common shares of the
Company by the weighted average number of common shares outstanding for the period. Diluted earnings per common share
reflects the assumed conversion of all dilutive securities. See Note
12
,
Earnings Per Common Share
,
to the condensed
consolidated financial statements in this Quarterly Report on Form 10-Q for more information.
Non-GAAP Financial Measures
Distributable Earnings
. Distributable Earnings, or “DE,” is a key performance benchmark used in our industry and is
evaluated regularly in making resource deployment and compensation decisions, and in assessing the performance of our three
segments. We also use DE in our budgeting, forecasting, and the overall management of our segments. We believe that
reporting DE is helpful to understanding our business and that investors should review the same supplemental financial measure
that management uses to analyze our segment performance. DE is intended to show the amount of net realized earnings without
the effects of consolidation of the Consolidated Funds. DE is derived from our segment reported results and is an additional
measure to assess performance.
Distributable Earnings differs from income (loss) before provision for income taxes computed in accordance with U.S.
GAAP in that it includes certain tax expenses associated with certain foreign performance revenues (composed of performance
allocations and incentive fees), and does not include unrealized performance allocations and related compensation expense,
unrealized principal investment income, equity-based compensation expense, net income (loss) attributable to non-Carlyle
interest in consolidated entities, or charges (credits) related to Carlyle corporate actions and non-recurring items that affect
period-to-period comparability and are not reflective of the Company’s operational performance. Charges (credits) related to
Carlyle corporate actions and non-recurring items include: charges associated with the Conversion, charges associated with
acquisitions, dispositions, or strategic investments, changes in the tax receivable agreement liability, amortization and any
impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions and dispositions,
charges associated with earn-outs and contingent consideration including gains and losses associated with the estimated fair
81
value of contingent consideration issued in conjunction with acquisitions or strategic investments, impairment charges
associated with lease right-of-use assets, gains and losses from the retirement of debt, charges associated with contract
terminations and employee severance, and non-recurring items that affect period-to-period comparability and are not reflective
of the Company’s operating performance. We believe the inclusion or exclusion of these items provides investors with a
meaningful indication of our core operating performance. This measure supplements and should be considered in addition to
and not in lieu of the results of operations discussed further under “—Consolidated Results of Operations” prepared in
accordance with U.S. GAAP.
Fee Related Earnings
. Fee Related Earnings, or “FRE,” is a component of DE and is used to assess the ability of the
business to cover base compensation and operating expenses from total fee revenues. FRE adjusts DE to exclude net realized
performance revenues, realized principal investment income from investments in Carlyle funds, and net interest (interest
income less interest expense). Fee Related Earnings includes fee related performance revenues and related compensation
expense. Fee related performance revenues represent the realized portion of performance revenues that are measured and
received on a recurring basis, are not dependent on realization events, and which have no risk of giveback.
Operating Metrics
We monitor certain operating metrics that are common to the asset management industry.
Fee-earning Assets under Management.
Fee-earning assets under management or Fee-earning AUM refers to the assets
we manage or advise from which we derive recurring fund management fees. Our Fee-earning AUM is generally based on one
of the following, once fees have been activated:
(a)
the amount of limited partner capital commitments, generally for carry funds where the original investment period
has not expired and for AlpInvest carry funds during the commitment fee period (see “Fee-earning AUM based on
capital commitments” in the table below for the amount of this component at each period);
(b)
the remaining amount of limited partner invested capital at cost, generally for carry funds and certain co-
investment vehicles where the original investment period has expired (see “Fee-earning AUM based on invested
capital” in the table below for the amount of this component at each period);
(c)
the amount of aggregate fee-earning collateral balance at par of our CLOs and other securitization vehicles, as
defined in the fund indentures (pre-2020 CLO vintages are generally exclusive of equities and defaulted positions)
as of the quarterly cut-off date;
(d)
the external investor portion of the net asset value of certain carry funds (see “Fee-earning AUM based on net
asset value” in the table below for the amount of this component at each period);
(e)
the fair value of Fortitude’s general account assets invested under the strategic advisory services agreement (see
“Fee-earning AUM based on fair value and other” in the table below);
(f)
the gross assets (including assets acquired with leverage) of certain cross-platform credit and direct lending
products, excluding cash and cash equivalents for one of our business development companies (included in “Fee-
earning AUM based on fair value and other” in the table below); and
(g)
the lower of cost or fair value of invested capital, generally for AlpInvest carry funds where the commitment fee
period has expired and certain carry funds where the investment period has expired, (included in “Fee-earning
AUM based on fair value and other” in the table below).
82
The chart below presents Fee-earning AUM by segment at each period, in billions.
The table below details Fee-earning AUM by its respective components at each period.
|
|
As of September 30,
|
||
|
|
2025
|
2024
|
|
|
Consolidated Results
|
(Dollars in millions)
|
||
|
Components of Fee-earning AUM
|
|||
|
Fee-earning AUM based on capital commitments
|
$
71,995
|
$
71,247
|
|
|
Fee-earning AUM based on invested capital
|
79,310
|
73,090
|
|
|
Fee-earning AUM based on collateral balances, at par
|
43,929
|
46,454
|
|
|
Fee-earning AUM based on net asset value
|
28,344
|
21,992
|
|
|
Fee-earning AUM based on fair value and other
|
108,376
|
100,824
|
|
|
Balance, End of Period
(1)
|
$
331,954
|
$
313,607
|
|
(1)
Ending balances as of
September 30, 2025
and
2024
exclude
$19.1 billion
and
$21.0 billion
, respectively, of pending Fee-earning AUM
for which fees have not yet been activated.
The table below provides the period to period rollforward of Fee-earning AUM.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
Consolidated Results
|
(Dollars in millions)
|
||||||
|
Fee-earning AUM Rollforward
|
|||||||
|
Balance, Beginning of Period
|
$
324,701
|
$
307,345
|
$
304,358
|
$
307,418
|
|||
|
Inflows
(1)
|
14,092
|
5,359
|
43,996
|
21,259
|
|||
|
Outflows (including realizations)
(2)
|
(7,563)
|
(5,129)
|
(23,974)
|
(18,582)
|
|||
|
Market Activity & Other
(3)
|
848
|
4,184
|
2,487
|
3,235
|
|||
|
Foreign Exchange
(4)
|
(124)
|
1,848
|
5,087
|
277
|
|||
|
Balance, End of Period
|
$
331,954
|
$
313,607
|
$
331,954
|
$
313,607
|
|||
83
(1)
Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based on
commitments were activated during the period, the fee-earning commitments invested in vehicles for which management fees are based
on invested capital, the fee-earning collateral balance of new CLO issuances, closed reinsurance transactions at Fortitude, as well as
gross subscriptions in vehicles for which management fees are based on net asset value. Inflows exclude fundraising amounts during the
period for which fees have not yet been activated, which are referenced as Pending Fee-earning AUM.
(2)
Outflows represents the impact of realizations from vehicles with management fees based on remaining invested capital at cost or fair
value, changes in basis for funds where the investment period, weighted-average investment period or commitment fee period has
expired during the period, reductions for funds that are no longer calling for fees, gross redemptions in our open-end funds, and outflows
from our liquid credit products. Distributions for funds earning management fees based on commitments during the period do not affect
Fee-earning AUM.
(3)
Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the lower
of cost or fair value and net asset value, activity of funds with fees based on gross asset value, and changes in the fair value of Fortitude’s
general account assets covered by the strategic advisory services agreement.
(4)
Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated
funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the
period end.
Refer to “—Segment Analysis” for a detailed discussion by segment of the activity affecting Fee-earning AUM for each
of the periods presented by segment.
Assets under Management
.
Assets under management or “AUM” refers to the assets we manage or advise. Our AUM
generally equals the sum of the following:
(a) the aggregate fair value of our carry funds and related co-investment vehicles, and separately managed accounts, plus
the capital that Carlyle is entitled to call from investors in those funds and vehicles (including Carlyle commitments to
those funds and vehicles and those of senior Carlyle professionals and employees) pursuant to the terms of their capital
commitments to those funds and vehicles;
(b)
the amount of aggregate collateral balance and principal cash at par or aggregate principal amount of the notes of our
CLOs and other structured products (inclusive of all positions);
(c)
the net asset value of certain carry funds;
(d)
the fair value of Fortitude’s general account assets invested under the strategic advisory services agreement; and
(e)
the gross assets (including assets acquired with leverage) of certain cross-platform credit and direct lending products,
plus the capital that Carlyle is entitled to call from investors in those vehicles pursuant to the terms of their capital
commitments to those vehicles.
84
The chart below presents Total AUM by segment at each period, in billions.
We include in our calculation of AUM and Fee-earning AUM the NGP Energy Funds that are advised by NGP. Our
calculation of AUM also includes third-party capital raised for the investment in Fortitude through a Carlyle-affiliated
investment fund and from strategic investors who directly invest in Fortitude alongside the fund. The AUM and Fee-earning
AUM related to the strategic advisory services agreement with Fortitude are inclusive of the net asset value of investments in
Carlyle products. These amounts are also reflected in the AUM and Fee-earning AUM of the strategy in which they are
invested.
For most of our Global Private Equity and Carlyle AlpInvest carry funds, total AUM includes the fair value of the capital
invested, whereas Fee-earning AUM includes the amount of capital commitments or the remaining amount of invested capital,
depending on whether the original investment period for the fund has expired. As such, Fee-earning AUM may be greater than
total AUM when the aggregate fair value of the remaining investments is less than the cost of those investments.
Our calculations of AUM and Fee-earning AUM may differ from the calculations of other asset managers. As a result,
these measures may not be comparable to similar measures presented by other asset managers. In addition, our calculation of
AUM (but not Fee-earning AUM) includes uncalled commitments to, and the fair value of invested capital in, our investment
funds from Carlyle and our personnel, regardless of whether such commitments or invested capital are subject to management
fees or performance allocations. Our calculations of AUM or Fee-earning AUM are not based on any definition of AUM or
Fee-earning AUM that is set forth in the agreements governing the investment funds that we manage or advise.
We generally use Fee-earning AUM as a metric to measure changes in the assets from which we earn recurring
management fees. Total AUM tends to be a better measure of our investment and fundraising performance as it reflects
investments at fair value plus available capital.
85
The table below provides the period to period rollforward of Total AUM.
|
|
Three Months Ended
September 30, 2025
|
Nine Months Ended
September 30, 2025
|
|
|
Consolidated Results
|
(Dollars in millions)
|
||
|
Total AUM Rollforward
|
|||
|
Balance, Beginning of Period
|
$
464,602
|
$
441,020
|
|
|
Inflows
(1)
|
16,864
|
44,476
|
|
|
Outflows (including realizations)
(2)
|
(11,731)
|
(31,746)
|
|
|
Market Activity & Other
(3)
|
4,528
|
12,396
|
|
|
Foreign Exchange
(4)
|
(204)
|
7,913
|
|
|
Balance, End of Period
|
$
474,059
|
$
474,059
|
|
(1)
Inflows generally reflects the impact of gross fundraising as well as closed reinsurance transactions at Fortitude and corporate
acquisitions during the period, if any. For funds or vehicles denominated in foreign currencies, this reflects translation at the average
quarterly rate.
(2)
Outflows includes distributions net of recallable or recyclable amounts in our carry funds, related co-investment vehicles, and separately
managed accounts, gross redemptions in our open-end funds, outflows from our liquid credit products, and the expiration of available
capital.
(3)
Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds and
related co-investment vehicles, and separately managed accounts, as well as the net impact of fees, expenses and non-investment income,
change in gross asset value for our business development companies, changes in the fair value of Fortitude’s general account assets
covered by the strategic advisory services agreement, and other changes in AUM.
(4)
Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated
funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the
period end.
Please refer to “—Segment Analysis” for a detailed discussion by segment of the activity affecting Total AUM for each
of the periods presented.
Available Capital
.
“Available Capital” refers to the amount of capital commitments available to be called for investments,
which may be reduced for equity invested that is funded via a fund credit facility and expected to be called from investors at a
later date, plus any additional assets/liabilities at the fund level other than active investments. Amounts previously called may
be added back to available capital following certain distributions. “Expired Available Capital” occurs when a fund has passed
the investment and follow-on periods and can no longer invest capital into new or existing deals. Any remaining Available
Capital, typically a result of either recycled distributions or specific reserves established for the follow-on period that are not
drawn, can only be called for fees and expenses and is therefore removed from the Total AUM calculation.
Perpetual Capital
.
“Perpetual Capital” refers to the assets we manage or advise which have an indefinite term and for
which there is no immediate requirement to return capital to investors upon the realization of investments made with such
capital, except as required by applicable law. Perpetual Capital may be materially reduced or terminated under certain
conditions, including reductions from changes in valuations and payments to investors, including through elections by investors
to redeem their investments, dividend payments, and other payment obligations, as well as the termination of or failure to renew
the respective investment advisory agreements. Perpetual Capital includes: (a) assets managed under the strategic advisory
services agreement with Fortitude, (b) our Core Plus real estate fund, (c) our business development companies and certain other
direct lending products, (d) Carlyle Tactical Private Credit Fund (“CTAC”), (e) our closed-end tender offer Carlyle AlpInvest
Private Markets (“CAPM”) and Carlyle AlpInvest Private Markets Secondaries (“CAPS”) funds, and (f) certain other structured
credit products.
As of
September 30, 2025
, our total AUM and Fee-earning AUM included
$112.9 billion
and
$108.1 billion
,
respectively, of Perpetual Capital. Our Perpetual Capital total AUM and Fee-Earning AUM, exclusive of assets managed under
the strategic advisory services agreement with Fortitude, was
$32.3 billion
and
$27.6 billion
, respectively, as of
September 30,
2025
.
Performance Fee Eligible AUM
.
“Performance Fee Eligible AUM” represents the AUM of funds for which we are
entitled to receive performance allocations, inclusive of the fair value of investments in those funds (which we refer to as
“Performance Fee Eligible Fair Value”) and their Available Capital. Performance Fee Eligible Fair Value is “Performance Fee-
Generating” when the associated fund has achieved the specified investment returns required under the terms of the fund’s
agreement and is accruing performance revenue as of the quarter-end reporting date. Funds whose performance allocations are
86
treated as fee related performance revenues are excluded from these metrics. As of
September 30, 2025
, our total AUM
included
$237.9 billion
of Performance Fee Eligible AUM.
Consolidation of Certain Carlyle Funds
The Company consolidates all entities that it controls either through a majority voting interest or as the primary
beneficiary of variable interest entities. The entities we consolidate are referred to collectively as the Consolidated Funds in our
condensed consolidated financial statements. The assets and liabilities of the Consolidated Funds are generally held within
separate legal entities and, as a result, the assets of the Consolidated Funds are not available to support our operating activities
and similarly the liabilities of the Consolidated Funds are non-recourse to us. As of
September 30, 2025
, our Consolidated
Funds represent approximately
3%
of our AUM;
3%
and
2%
of our management fees for the
three and nine months ended
September 30, 2025
, respectively; and
2%
of our total investment income or loss on an unconsolidated basis for both the
three
and nine months ended September 30, 2025
.
We are not required under the consolidation guidance to consolidate in our financial statements most of the investment
funds we advise. However, we consolidate certain CLOs and certain other funds that we advise, and the number of funds we are
required to consolidate has been increasing as a result of the impacts of capital from our balance sheet invested in new products
and our indirect interest in funds through our investment in Fortitude (see Note
4
,
Investments
).
As of
September 30, 2025
, the
assets and liabilities of the Consolidated Funds
were primarily related to our consolidated CLOs
, which held approximately
$9.6 billion
of total assets.
Additionally, the Investments of Consolidated Funds
included
approximately
$0.9 billion
related to
investments that have been bridged to investment funds in our Global Private Equity segment.
Generally, the consolidation of the Consolidated Funds has a gross-up effect on our assets, liabilities and cash flows
but
has no net effect on the net income attributable to the Company.
The majority of the net economic ownership interests of the
Consolidated Funds are reflected as non-controlling interests in consolidated entities in the consolidated financial statements.
However, in certain Consolidated Funds, particularly those where we have elected to invest additional amounts or bridge
investments in new investment areas, the non-controlling interests are less significant.
The Consolidated Funds are not the same entities in all periods presented. The Consolidated Funds in future periods may
change due to changes in fund terms, formation of new funds, and terminations of funds. Because only a small portion of our
funds are consolidated, the performance of the Consolidated Funds is not necessarily consistent with or representative of the
combined performance trends of all of our funds.
For further information on our consolidation policy and the consolidation of certain funds, see Note
2
,
Summary of
Significant Accounting Policies
, to the condensed consolidated financial statements included in this Quarterly Report on
Form 10-Q.
87
Consolidated Results of Operations
The following table and discussion sets forth information regarding our condensed consolidated results of operations for
the
three and nine months ended September 30, 2025
and
2024
. The condensed consolidated financial statements have been
prepared on substantially the same basis for all historical periods presented; however, the consolidated funds are not the same
entities in all periods shown due to changes in fund terms and the creation and termination of funds. As further described above,
the consolidation of these funds primarily has the impact of increasing interest and other income of Consolidated Funds, interest
and other expenses of Consolidated Funds, and net investment income (losses) of Consolidated Funds in the year that the fund
is initially consolidated. The consolidation of these funds had no effect on net income attributable to the Company for the
periods presented.
|
|
Three Months Ended
September 30,
|
Change
|
Nine Months Ended
September 30,
|
Change
|
|||||||||||
|
|
2025
|
2024
|
$
|
%
|
2025
|
2024
|
$
|
%
|
|||||||
|
|
(Dollars in millions)
|
||||||||||||||
|
Revenues
|
|||||||||||||||
|
Fund management fees
|
$
583.3
|
$
532.7
|
$
50.6
|
9
%
|
$
1,789.8
|
$
1,590.7
|
$
199.1
|
13
%
|
|||||||
|
Incentive fees
|
51.4
|
38.7
|
12.7
|
33
%
|
135.1
|
96.2
|
38.9
|
40
%
|
|||||||
|
Investment income (loss)
|
|||||||||||||||
|
Performance allocations
|
(606.7)
|
1,785.5
|
(2,392.2)
|
NM
|
255.0
|
1,826.7
|
(1,571.7)
|
(86)
%
|
|||||||
|
Principal investment income
|
87.7
|
46.0
|
41.7
|
91
%
|
79.8
|
207.2
|
(127.4)
|
(61)
%
|
|||||||
|
Total investment income
(loss)
|
(519.0)
|
1,831.5
|
(2,350.5)
|
NM
|
334.8
|
2,033.9
|
(1,699.1)
|
(84)
%
|
|||||||
|
Interest and other income
|
53.6
|
52.2
|
1.4
|
3
%
|
159.2
|
161.9
|
(2.7)
|
(2)
%
|
|||||||
|
Interest and other income of
Consolidated Funds
|
163.4
|
180.1
|
(16.7)
|
(9)
%
|
459.8
|
510.6
|
(50.8)
|
(10)
%
|
|||||||
|
Total revenues
|
332.7
|
2,635.2
|
(2,302.5)
|
(87)
%
|
2,878.7
|
4,393.3
|
(1,514.6)
|
(34)
%
|
|||||||
|
Expenses
|
|||||||||||||||
|
Compensation and benefits
|
|||||||||||||||
|
Cash-based compensation and
benefits
|
216.2
|
207.5
|
8.7
|
4
%
|
673.0
|
635.7
|
37.3
|
6
%
|
|||||||
|
Equity-based compensation
|
90.7
|
121.6
|
(30.9)
|
(25)
%
|
287.1
|
355.1
|
(68.0)
|
(19)
%
|
|||||||
|
Performance allocations and
incentive fee related
compensation
|
(324.6)
|
1,151.0
|
(1,475.6)
|
NM
|
290.4
|
1,222.4
|
(932.0)
|
(76)
%
|
|||||||
|
Total compensation and
benefits
|
(17.7)
|
1,480.1
|
(1,497.8)
|
NM
|
1,250.5
|
2,213.2
|
(962.7)
|
(43)
%
|
|||||||
|
General, administrative and other
expenses
|
180.7
|
176.6
|
4.1
|
2
%
|
559.8
|
512.2
|
47.6
|
9
%
|
|||||||
|
Interest
|
29.8
|
30.3
|
(0.5)
|
(2)
%
|
85.6
|
91.5
|
(5.9)
|
(6)
%
|
|||||||
|
Interest and other expenses of
Consolidated Funds
|
177.3
|
162.0
|
15.3
|
9
%
|
461.6
|
438.7
|
22.9
|
5
%
|
|||||||
|
Other non-operating income
|
—
|
(0.1)
|
0.1
|
(100)
%
|
(0.1)
|
(0.2)
|
0.1
|
(50)
%
|
|||||||
|
Total expenses
|
370.1
|
1,848.9
|
(1,478.8)
|
(80)
%
|
2,357.4
|
3,255.4
|
(898.0)
|
(28)
%
|
|||||||
|
Other income (loss)
|
|||||||||||||||
|
Net investment income (loss) of
Consolidated Funds
|
123.2
|
2.5
|
120.7
|
NM
|
176.1
|
(9.6)
|
185.7
|
NM
|
|||||||
|
Income before provision for income
taxes
|
85.8
|
788.8
|
(703.0)
|
(89)
%
|
697.4
|
1,128.3
|
(430.9)
|
(38)
%
|
|||||||
|
Provision (benefit) for income taxes
|
(26.7)
|
173.1
|
(199.8)
|
NM
|
98.2
|
264.5
|
(166.3)
|
(63)
%
|
|||||||
|
Net income
|
112.5
|
615.7
|
(503.2)
|
(82)
%
|
599.2
|
863.8
|
(264.6)
|
(31)
%
|
|||||||
|
Net income attributable to non-
controlling interests in consolidated
entities
|
111.6
|
20.0
|
91.6
|
NM
|
148.6
|
54.3
|
94.3
|
174
%
|
|||||||
|
Net income attributable to The Carlyle
Group Inc. Common Stockholders
|
$
0.9
|
$
595.7
|
$
(594.8)
|
(100)
%
|
$
450.6
|
$
809.5
|
$
(358.9)
|
(44)
%
|
|||||||
NM - Not meaningful
88
Revenues
Fund management fees
. Fund management fees
increased
$50.6 million
, or
9%
, for the
three months ended September
30, 2025
, as compared to the
three months ended September 30, 2024
, and
increased
$199.1 million
, or
13%
, for the
nine
months ended September 30, 2025
, as compared to the
nine months ended September 30, 2024
, primarily due to the following:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||
|
2025 v. 2024
|
|||
|
(Dollars in millions)
|
|||
|
Higher management fees from the commencement of the investment period for
certain newly raised funds which charge fees based on commitments and the
impact of incremental fundraising in funds which activated fees in a prior period
|
$
67.7
|
$
183.3
|
|
|
Lower management fees resulting from the change in basis from commitments to
invested capital and step-downs in rate for certain funds, and the impact of net
investment activity in funds whose management fees are based on invested capital,
including the impact of changes in the base under the strategic advisory services
agreement with Fortitude
|
(33.2)
|
(107.4)
|
|
|
Increase in catch-up management fees from subsequent closes of funds that are in
the fundraising period
|
24.0
|
50.0
|
|
|
(Lower) higher transaction and portfolio advisory fees
|
(4.0)
|
68.5
|
|
|
All other changes
(1)
|
(3.9)
|
4.7
|
|
|
Total
increase
in Fund management fees
(2)
|
$
50.6
|
$
199.1
|
|
(1)
The nine months ended September 30, 2025 included approximately $19 million of aviation catch-up subordinated management fees.
(2)
Total
increase
in Fund management fees does not include our equity income allocation from NGP management fee related revenues. We do not control
NGP and account for our strategic investment in NGP as an equity method investment under U.S. GAAP. Therefore, Fund management fees associated
with NGP are included in Principal investment income (loss) in our U.S. GAAP results.
No fund generated over 10% of total fund management fees in any of the periods presented. Over the last twelve months
ended September 30, 2025, Fee-earning assets under management in our Carlyle AlpInvest and Global Credit segments grew
25%
and
5%
, respectively, while Global Private Equity decreased
2%
. As a result, Fund management fees increased in Carlyle
AlpInvest and Global Credit, while Global Private Equity decreased, which was due in part to smaller buyout fund sizes in our
corporate private equity strategy and step-downs in rate or basis, partially offset by the activation of fees in certain products in
our Global Private Equity segment.
The increase in catch-up management fees for the three and nine months ended September
30, 2025 was primarily attributable to our Carlyle AlpInvest segment. Fundraising for our most recent vintage of secondaries &
portfolio finance funds in our Carlyle AlpInvest segment concluded in the third quarter of 2025 and therefore the associated
catch-up management fees will not recur next quarter.
Fund management fees included transaction and portfolio advisory fees, net of rebate offsets, of
$21.1 million
and
$25.1 million
for the
three months ended September 30, 2025 and 2024
, respectively, and
$143.6 million
and
$75.1 million
for
the
nine months ended September 30, 2025 and 2024
, respectively. These fees primarily comprise capital markets fees
generated by Carlyle Global Capital Markets. Over
25%
of the fees earned during the
nine months ended September 30, 2025
related to the acquisition of a healthcare investment across our U.S., Europe, and Asia buyout funds in the first quarter.
The
recognition of portfolio advisory fees, transactions fees, and capital markets fees can be volatile as they are primarily generated
by investment activity within our funds, and therefore are impacted by our investment pace. See “—Trends Affecting Our
Business” for further discussion on our investment activity and broader market trends.
Investment income (loss)
.
Investment income (loss)
decreased
$2.4 billion
for the
three months ended September 30, 2025
compared to the
three months ended September 30, 2024
, and
decreased
$1.7 billion
for the
nine months ended September 30,
2025
compared to the
nine months ended September 30, 2024
. The components of
Investment income (loss)
a
re included in the
following table:
89
|
Three Months Ended
September 30,
|
Change
|
Nine Months Ended
September 30,
|
Change
|
||||||||||||
|
2025
|
2024
|
$
|
%
|
2025
|
2024
|
$
|
%
|
||||||||
|
(Dollars in millions)
|
|||||||||||||||
|
Performance allocations
|
$
(606.7)
|
$
1,785.5
|
$
(2,392.2)
|
NM
|
$
255.0
|
$
1,826.7
|
$
(1,571.7)
|
(86)
%
|
|||||||
|
Principal investment income
:
|
|||||||||||||||
|
Investment income (loss) from
NGP, which includes
performance allocations
|
29.8
|
34.7
|
(4.9)
|
(14)
%
|
(42.6)
|
85.2
|
(127.8)
|
NM
|
|||||||
|
Investment income (loss) from
our carry funds:
|
|||||||||||||||
|
Global Private Equity
|
9.1
|
23.1
|
(14.0)
|
(61)
%
|
28.5
|
36.9
|
(8.4)
|
(23)
%
|
|||||||
|
Global Credit
|
8.7
|
3.9
|
4.8
|
123
%
|
8.6
|
12.6
|
(4.0)
|
(32)
%
|
|||||||
|
Carlyle AlpInvest
|
16.3
|
15.1
|
1.2
|
8
%
|
42.8
|
21.9
|
20.9
|
95
%
|
|||||||
|
Investment income (loss) from
our CLOs
|
2.1
|
(7.5)
|
9.6
|
NM
|
(5.4)
|
21.5
|
(26.9)
|
NM
|
|||||||
|
Investment income from Carlyle
FRL
|
0.3
|
21.2
|
(20.9)
|
(99)
%
|
15.7
|
30.8
|
(15.1)
|
(49)
%
|
|||||||
|
Investment income (loss) from
our other Global Credit
products
|
1.4
|
(42.5)
|
43.9
|
NM
|
6.1
|
(13.6)
|
19.7
|
NM
|
|||||||
|
Investment income on foreign
currency hedges
|
0.4
|
0.3
|
0.1
|
33
%
|
2.1
|
5.2
|
(3.1)
|
(60)
%
|
|||||||
|
All other investment income
(loss)
|
19.6
|
(2.3)
|
21.9
|
NM
|
24.0
|
6.7
|
17.3
|
258
%
|
|||||||
|
Total
Principal investment income
|
87.7
|
46.0
|
41.7
|
91
%
|
79.8
|
207.2
|
(127.4)
|
(61)
%
|
|||||||
|
Total
Investment income (loss)
|
$
(519.0)
|
$
1,831.5
|
$
(2,350.5)
|
NM
|
$
334.8
|
$
2,033.9
|
$
(1,699.1)
|
(84)
%
|
|||||||
Performance allocations
.
Performance allocations
by segment for the
three and nine months ended September 30, 2025
and
2024
comprised the following:
|
Three Months Ended
September 30,
|
Change
|
Nine Months Ended
September 30,
|
Change
|
||||||||||||
|
2025
|
2024
|
$
|
%
|
2025
|
2024
|
$
|
%
|
||||||||
|
(Dollars in millions)
|
|||||||||||||||
|
Global Private Equity
|
$
(781.4)
|
$
1,625.8
|
$
(2,407.2)
|
(148)
%
|
$
(219.5)
|
$
1,447.3
|
$
(1,666.8)
|
(115)
%
|
|||||||
|
Global Credit
|
93.3
|
58.7
|
34.6
|
59
%
|
223.1
|
170.0
|
53.1
|
31
%
|
|||||||
|
Carlyle AlpInvest
|
81.4
|
101.0
|
(19.6)
|
(19)
%
|
251.4
|
209.4
|
42.0
|
20
%
|
|||||||
|
Total performance allocations
|
$
(606.7)
|
$
1,785.5
|
$
(2,392.2)
|
NM
|
$
255.0
|
$
1,826.7
|
$
(1,571.7)
|
(86)
%
|
|||||||
Performance allocations
for the
three and nine months ended September 30, 2025
included the following:
•
In the Global Private Equity segment, for the
three and nine months ended September 30, 2025
, reversals of
Performance allocations were primarily attributable to the impact of a decrease in the market prices of certain public
investments in CP VII and CAP V
.
Additionally, for the
nine months ended September 30, 2025
, reversals of
Performance allocations were
o
ffset by accruals of Performance allocations resulting from appreciation in CP VIII.
•
In the Global Credit segment, for the
three and nine months ended September 30, 2025
, Performance allocation
accruals were primarily driven by the impact of appreciation in CCOF II and CCOF III. During the
nine months
ended September 30, 2025
, Performance allocation accruals were also driven by the impact of appreciation in
SASOF V.
•
In the Carlyle AlpInvest segment, for the
three and nine months ended September 30, 2025
, Performance allocation
accruals were primarily driven by the impact of appreciation in our secondaries & portfolio finance. During the
nine
months ended September 30, 2025
, Performance allocation accruals were also driven by the impact of appreciation
in our
co-investment funds
.
90
Performance allocations
for the
three and nine months ended September 30, 2024
included the following:
•
In the Global Private Equity segment, for the
three and nine months ended September 30, 2024
, performance
allocation accruals were primarily driven by appreciation in our CP VII fund, and to a lesser extent appreciation in
our CP VIII and CAP V funds, partially offset by the reversal of performance allocations in our CEP V and CP VI
funds due to portfolio depreciation.
•
In the Global Credit segment, for the
three and nine months ended September 30, 2024
, performance allocation
accruals were primarily driven by appreciation in our opportunistic credit funds.
•
In the Carlyle AlpInvest segment, for the
three and nine months ended September 30, 2024
, performance allocation
accruals were primarily driven by appreciation in our secondaries & portfolio finance and co-investment strategies.
See “—Trends Affecting Our Business” for further discussion on the macroeconomic, geopolitical and industry
landscape, and our investment activity.
Principal investment income
. The
increase
in
Principal investment income
for the
three months ended September 30,
2025
compared to the
three months ended September 30, 2024
primarily reflects the impact of a
$48.5 million
reversal of
previously recorded unrealized investment income in the
three months ended September 30, 2024
from our Global Credit
products as a result of the Merger as discussed in Note 9, Related Party Transactions.
The
increase
for the
three months ended
September 30, 2025
was also impacted by an increase in other investment income, driven by unrealized market appreciation in
a
corporate investment
. These were partially offset by a decrease in unrealized investment income from Carlyle FRL.
The
decrease
in
Principal investment income
for the
nine months ended September 30, 2025
compared to the
nine months
ended September 30, 2024
was primarily attributable to an impairment charge of
$92.5 million
and a
$38.0 million
reduction in
NGP accrued carry, both related to the restructuring of the terms of our strategic investment in NGP (see Note
4
,
Investments
,
for more information).
Expenses
Compensation and benefits
.
Total compensation and benefits
decreased
$1.5 billion
for the
three months ended
September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
decreased
$1.0 billion
for the
nine
months ended September 30, 2025
, as compared to the
nine months ended September 30, 2024
. The
decreases
for
three and
nine months ended September 30, 2025
relative to the comparable prior year periods are primarily attributable to a
decrease
in
Performance allocations and incentive fee related compensation
of
$1.5 billion
and
$0.9 billion
, respectively, and
a decrease
in
Equity-based compensation
of
$30.9 million
and
$68.0 million
, respectively. The
decrease
in
Performance allocations and
incentive fee related compensation
was primarily driven by a decrease in
Performance allocations
, on which
Performance
allocations and incentive fee related compensation
is
based. The
decrease
in
Equity-based compensation
was primarily driven
by lower amortization on performance-based stock awards, partially offset by additional equity awards granted in February
2025.
General, administrative and other expenses
.
General, administrative and other expenses
increased
$4.1 million
for the
three months ended September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
increased
$47.6
million
for the
nine months ended September 30, 2025
as compared to the
nine months ended September 30, 2024
. The increase
for the
three months ended September 30, 2025
was primarily attributable to an increase in external fundraising costs, primarily
in
our Carlyle AlpInves
t segment, as well as an increase in IT expenses and professional fees. These were partially offset by a
decrease in foreign currency remeasurement adjustments of
$13.1 million
, reflecting a foreign exchange gain for the
three
months ended September 30, 2025
, compared to a foreign exchange loss for the
three months ended September 30, 2024
driven
by the movement in EUR relative to USD
.
The increase for the
nine months ended September 30, 2025
was
primarily attributable to an increase in foreign currency
remeasurement loss of
$13.1 million
, reflecting the movement of EUR and GBP relative to USD
, as well as an increase in
external fundraising costs and
an increase in operating costs related to certain funds. These were
partially offset by the impact
of an increase in liabilities during the
nine months ended September 30, 2024
for litigation-related contingencies, regulatory
examination and inquiries, and other matters.
91
Net investment income (loss) of Consolidated Funds
.
The table below summarizes the components of
Net investment
income (loss) of Consolidated Funds
, including our consolidated CLOs and certain other
funds
:
|
|
Three Months Ended
September 30,
|
Change
|
Nine Months Ended
September 30,
|
Change
|
|||||||||||
|
|
2025
|
2024
|
$
|
%
|
2025
|
2024
|
$
|
%
|
|||||||
|
|
(Dollars in millions)
|
||||||||||||||
|
Realized gains (losses)
|
$
58.5
|
$
(4.5)
|
$
63.0
|
NM
|
$
33.6
|
$
(49.1)
|
$
82.7
|
NM
|
|||||||
|
Net change in unrealized gains (losses)
|
30.0
|
(20.4)
|
50.4
|
NM
|
66.5
|
107.2
|
(40.7)
|
(38)
%
|
|||||||
|
Total gains (losses)
|
88.5
|
(24.9)
|
113.4
|
NM
|
100.1
|
58.1
|
42.0
|
72
%
|
|||||||
|
Gains (losses) from liabilities of CLOs
|
34.7
|
27.4
|
7.3
|
27
%
|
76.0
|
(67.7)
|
143.7
|
NM
|
|||||||
|
Total net investment income (loss) of
Consolidated Funds
|
$
123.2
|
$
2.5
|
$
120.7
|
NM
|
$
176.1
|
$
(9.6)
|
$
185.7
|
NM
|
|||||||
Net investment income (loss) of Consolidated Funds for the
three and nine months ended September 30, 2025
included
unrealized gains of
$153.6 million
in a new collateralized fund obligation vehicle in our Carlyle AlpInvest segment, partially
offset by unrealized losses of
$82.2 million
on an infrastructure investment in consolidated funds in our Global Private Equity
segment.
Provision (benefit) for income taxes
. The Company’s provision (benefit) for income taxes was
$(26.7) million
and
$173.1
million
for the
three months ended September 30, 2025 and 2024
, respectively, and
$98.2 million
and
$264.5 million
for the
nine months ended September 30, 2025 and 2024
, respectively. The Company’s effective tax rate was approximately
(31)%
and
22%
for the
three months ended September 30, 2025 and 2024
, respectively, and
14%
and
23%
for the
nine months ended
September 30, 2025 and 2024
, respectively.
The effective tax rate for the
three months ended September 30, 2025 and 2024
primarily comprised the 21% U.S. federal corporate income tax rate, the impact of U.S. state and foreign income taxes and
disallowed executive compensation, offset by non-controlling interest and equity-based compensation deductions. The effective
tax rate for the three months ended September 30, 2025 was negative primarily due to the tax benefit from the pretax loss
incurred prior to the effect of non-controlling interest and due to the deduction related to the excess tax benefit from the vesting
of restricted stock units in the quarter.
The effective tax rate for the
nine months ended September 30, 2025
and
2024
primarily
comprised the 21% U.S. federal corporate income tax rate, the impact of U.S. state and foreign income taxes, and disallowed
executive compensation, primarily offset by equity-based compensation deductions and non-controlling interest. The effective
tax rate for the nine months ended September 30, 2024 also includes an increase related to other non-deductible expenses.
As of
September 30, 2025
and
December 31, 2024
, the Company had federal, state, local, and foreign taxes payable of
$90.6 million
and
$46.2 million
, respectively, which is recorded as a component of accounts payable, accrued expenses and
other liabilities in the accompanying condensed consolidated balance sheets.
Net income attributable to non-controlling interests in consolidated entities
.
Net income attributable to non-controlling
interests in consolidated entities
was
$111.6 million
for the
three months ended September 30, 2025
, as compared to
$20.0
million
for the
three months ended September 30, 2024
, and
$148.6 million
for the
nine months ended September 30, 2025
, as
compared to
$54.3 million
for the
nine months ended September 30, 2024
. These amounts are primarily attributable to the net
earnings of the Consolidated Funds for each period, which are substantially all allocated to the related fund’s limited partners or
CLO investors, as well as net earnings from our insurance solutions business and certain other products that are allocated to
certain third-party investors. These amounts also reflect the net income attributable to non-controlling interests in carried
interest, giveback obligations, and cash held for carried interest distributions. The net income (loss) of our Consolidated Funds,
after eliminations, was
$91.3 million
and
$8.3 million
for the
three months ended September 30, 2025 and 2024
, respectively,
and
$113.2 million
and
$16.7 million
for the
nine months ended September 30, 2025 and 2024
, respectively.
Non-GAAP Financial Measures
The following tables set forth information in the format used by management when making resource deployment
decisions and in assessing performance of our segments. These Non-GAAP financial measures are presented for the
three and
nine months ended September 30, 2025
and
2024
. Our Non-GAAP financial measures exclude the effects of unrealized
performance allocations net of related compensation expense, unrealized principal investment income, consolidated funds,
acquisition and disposition-related items including amortization and any impairment charges of acquired intangible assets and
contingent consideration taking the form of earn-outs, charges associated with the Conversion, impairment charges associated
with lease right-of-use assets, gains or losses from retirement of debt, charges associated with contract terminations and
employee severance, charges associated with equity-based compensation, changes in the tax receivable agreement liability,
corporate actions and infrequently occurring or unusual events.
92
The following table shows our total segment DE and FRE for the
three and nine months ended September 30, 2025
and
2024
.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
(Dollars in millions)
|
|||||||
|
Total Segment Revenues
|
$
782.5
|
$
895.0
|
$
2,809.7
|
$
2,706.9
|
|||
|
Total Segment Expenses
|
414.1
|
527.9
|
1,554.9
|
1,565.3
|
|||
|
(=) Distributable Earnings
|
$
368.4
|
$
367.1
|
$
1,254.8
|
$
1,141.6
|
|||
|
(-) Realized Net Performance Revenues
|
19.1
|
90.6
|
234.2
|
288.3
|
|||
|
(-) Realized Principal Investment Income
|
49.5
|
9.1
|
113.0
|
69.4
|
|||
|
(+) Net Interest
|
12.1
|
10.5
|
38.2
|
33.3
|
|||
|
(=) Fee Related Earnings
|
$
311.9
|
$
277.9
|
$
945.8
|
$
817.2
|
|||
The following table sets forth our total segment revenues for the
three and nine months ended September 30, 2025
and
2024
.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
(Dollars in millions)
|
|||||||
|
Segment Revenues
|
|||||||
|
Fund level fee revenues
|
|||||||
|
Fund management fees
|
$
573.9
|
$
526.5
|
$
1,689.0
|
$
1,567.6
|
|||
|
Portfolio advisory and transaction fees, net and other
|
32.3
|
27.4
|
158.1
|
83.0
|
|||
|
Fee related performance revenues
|
47.5
|
36.3
|
125.7
|
98.5
|
|||
|
Total fund level fee revenues
|
653.7
|
590.2
|
1,972.8
|
1,749.1
|
|||
|
Realized performance revenues
|
61.7
|
275.9
|
676.6
|
830.2
|
|||
|
Realized principal investment income
|
49.5
|
9.1
|
113.0
|
69.4
|
|||
|
Interest income
|
17.6
|
19.8
|
47.3
|
58.2
|
|||
|
Total Segment Revenues
|
$
782.5
|
$
895.0
|
$
2,809.7
|
$
2,706.9
|
|||
The following table sets forth our total segment expenses for the
three and nine months ended September 30, 2025
and
2024
.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||
|
2025
|
2024
|
2025
|
2024
|
||||
|
(Dollars in millions)
|
|||||||
|
Segment Expenses
|
|||||||
|
Compensation and benefits
|
|||||||
|
Cash-based compensation and benefits
|
$
220.5
|
$
207.6
|
$
678.3
|
$
627.2
|
|||
|
Realized performance revenue related compensation
|
42.6
|
185.3
|
442.4
|
541.9
|
|||
|
Total compensation and benefits
|
263.1
|
392.9
|
1,120.7
|
1,169.1
|
|||
|
General, administrative, and other indirect expenses
|
107.3
|
92.9
|
309.2
|
270.5
|
|||
|
Depreciation and amortization expense
|
14.0
|
11.8
|
39.5
|
34.2
|
|||
|
Interest expense
|
29.7
|
30.3
|
85.5
|
91.5
|
|||
|
Total Segment Expenses
|
$
414.1
|
$
527.9
|
$
1,554.9
|
$
1,565.3
|
|||
93
Income (loss) before provision for income taxes is the U.S. GAAP financial measure most comparable to Distributable
Earnings and Fee Related Earnings. The following table is a reconciliation of income (loss) before provision for income taxes to
Distributable Earnings and to Fee Related Earnings.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Income (loss) before provision for income taxes
|
$
85.8
|
$
788.8
|
$
697.4
|
$
1,128.3
|
|||
|
Adjustments:
|
|||||||
|
Net unrealized performance and fee related performance revenues
|
244.6
|
(564.4)
|
210.3
|
(386.4)
|
|||
|
Unrealized principal investment (income) loss
|
7.4
|
(1.8)
|
(35.1)
|
(54.3)
|
|||
|
Equity-based compensation
(1)
|
88.2
|
122.0
|
289.3
|
360.4
|
|||
|
Acquisition or disposition-related charges, including amortization of
intangibles and impairment
|
46.2
|
37.4
|
216.7
|
103.5
|
|||
|
Tax (expense) benefit associated with certain foreign performance revenues
|
(0.4)
|
(0.2)
|
(0.5)
|
(1.4)
|
|||
|
Net (income) loss attributable to non-controlling interests in consolidated
entities
|
(111.6)
|
(20.0)
|
(148.6)
|
(54.3)
|
|||
|
Other adjustments
(2)
|
8.2
|
5.3
|
25.3
|
45.8
|
|||
|
(=) Distributable Earnings
|
$
368.4
|
$
367.1
|
$
1,254.8
|
$
1,141.6
|
|||
|
(-) Realized net performance revenues, net of related compensation
(3)
|
19.1
|
90.6
|
234.2
|
288.3
|
|||
|
(-) Realized principal investment income
(3)
|
49.5
|
9.1
|
113.0
|
69.4
|
|||
|
(+) Net interest
|
12.1
|
10.5
|
38.2
|
33.3
|
|||
|
(=) Fee Related Earnings
|
$
311.9
|
$
277.9
|
$
945.8
|
$
817.2
|
|||
(1)
Equity-based compensation for the
three and nine months ended September 30, 2025
and
2024
includes amounts presented in principal
investment income and general, administrative and other expenses in our U.S. GAAP statement of operations.
(2)
Includes charges (credits) related to Carlyle corporate actions and non-recurring items that affect period-to-period comparability and are
not reflective of the Company’s operating performance.
94
(3) See reconciliation to most directly comparable U.S. GAAP measure below:
|
|
Three Months Ended September 30, 2025
|
||||
|
|
Carlyle
Consolidated
|
Adjustments
(4)
|
Total
Reportable
Segments
|
||
|
|
(Dollars in millions)
|
||||
|
Performance revenues
|
$
(606.7)
|
$
668.4
|
$
61.7
|
||
|
Performance revenues related compensation expense
|
(324.6)
|
367.2
|
42.6
|
||
|
Net performance revenues
|
$
(282.1)
|
$
301.2
|
$
19.1
|
||
|
Principal investment income (loss)
|
$
87.7
|
$
(38.2)
|
$
49.5
|
||
|
Nine Months Ended September 30, 2025
|
|||||
|
Carlyle
Consolidated
|
Adjustments
(4)
|
Total
Reportable
Segments
|
|||
|
(Dollars in millions)
|
|||||
|
Performance revenues
|
$
255.0
|
$
421.6
|
$
676.6
|
||
|
Performance revenues related compensation expense
|
290.4
|
152.0
|
442.4
|
||
|
Net performance revenues
|
$
(35.4)
|
$
269.6
|
$
234.2
|
||
|
Principal investment income (loss)
|
$
79.8
|
$
33.2
|
$
113.0
|
||
|
|
Three Months Ended September 30, 2024
|
||||
|
|
Carlyle
Consolidated
|
Adjustments
(4)
|
Total
Reportable
Segments
|
||
|
|
(Dollars in millions)
|
||||
|
Performance revenues
|
$
1,785.5
|
$
(1,509.6)
|
$
275.9
|
||
|
Performance revenues related compensation expense
|
1,151.0
|
(965.7)
|
185.3
|
||
|
Net performance revenues
|
$
634.5
|
$
(543.9)
|
$
90.6
|
||
|
Principal investment income (loss)
|
$
46.0
|
$
(36.9)
|
$
9.1
|
||
|
Nine Months Ended September 30, 2024
|
|||||
|
Carlyle
Consolidated
|
Adjustments
(4)
|
Total
Reportable
Segments
|
|||
|
(Dollars in millions)
|
|||||
|
Performance revenues
|
$
1,826.7
|
$
(996.5)
|
$
830.2
|
||
|
Performance revenues related compensation expense
|
1,222.4
|
(680.5)
|
541.9
|
||
|
Net performance revenues
|
$
604.3
|
$
(316.0)
|
$
288.3
|
||
|
Principal investment income (loss)
|
$
207.2
|
$
(137.8)
|
$
69.4
|
||
(4)
Adjustments to performance revenues and principal investment income (loss) relate to (i) unrealized performance allocations net of
related compensation expense and unrealized principal investment income, which are excluded from our Non-GAAP results, (ii)
amounts earned from the Consolidated Funds, which were eliminated in the U.S. GAAP consolidation but were included in the Non-
GAAP results, (iii) amounts attributable to non-controlling interests in consolidated entities, which were excluded from the Non-GAAP
results, (iv) the reclassification of NGP performance revenues, which are included in investment income in the U.S. GAAP financial
statements, (v) the reclassification of fee related performance revenues, which are included in fund level fee revenues in the segment
results, and (vi) the reclassification of tax expenses associated with certain foreign performance revenues. Adjustments to principal
investment income (loss) also include the reclassification of earnings for the investment in NGP Management and its affiliates to the
appropriate operating captions for the Non-GAAP results, and the exclusion of charges associated with the investment in NGP
Management and its affiliates that are excluded from the Non-GAAP results.
95
Distributable Earnings for our reportable segments are as follows:
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
|
(Dollars in millions)
|
||||||
|
Global Private Equity
|
$
146.8
|
$
235.5
|
$
644.3
|
$
747.7
|
|||
|
Global Credit
|
126.4
|
80.5
|
357.8
|
262.4
|
|||
|
Carlyle AlpInvest
|
95.2
|
51.1
|
252.7
|
131.5
|
|||
|
Distributable Earnings
|
$
368.4
|
$
367.1
|
$
1,254.8
|
$
1,141.6
|
|||
Segment Analysis
Discussed below is our DE and FRE for our segments for the periods presented. Our segment information is reflected in
the manner used by our chief operating decision maker to make operating and compensation decisions, assess performance, and
allocate resources.
For segment reporting purposes, revenues and expenses are presented on a basis that deconsolidates our Consolidated
Funds. As a result, segment revenues from management fees, realized performance revenues and realized principal investment
income (loss) are different than those presented on a consolidated U.S. GAAP basis because these revenues recognized in
certain segments are received from Consolidated Funds and are eliminated in consolidation when presented on a consolidated
U.S. GAAP basis. Furthermore, segment expenses are different than related amounts presented on a consolidated U.S. GAAP
basis due to the exclusion of fund expenses that are paid by the Consolidated Funds.
96
Global Private Equity
The following table presents our results of operations for our Global Private Equity
(1)
segment:
|
|
Three Months Ended
September 30,
|
Change
|
Nine Months Ended
September 30,
|
Change
|
|||||||||||
|
|
2025
|
2024
|
$
|
%
|
2025
|
2024
|
$
|
%
|
|||||||
|
|
(Dollars in millions)
|
||||||||||||||
|
Segment Revenues
|
|||||||||||||||
|
Fund level fee revenues
|
|||||||||||||||
|
Fund management fees
|
$
295.0
|
$
298.6
|
$
(3.6)
|
(1)
%
|
$
880.4
|
$
908.4
|
$
(28.0)
|
(3)
%
|
|||||||
|
Portfolio advisory and
transaction fees, net and other
|
6.5
|
5.9
|
0.6
|
10
%
|
27.9
|
16.8
|
11.1
|
66
%
|
|||||||
|
Fee related performance
revenues
|
—
|
—
|
—
|
NM
|
—
|
6.9
|
(6.9)
|
(100)
%
|
|||||||
|
Total fund level fee revenues
|
301.5
|
304.5
|
(3.0)
|
(1)
%
|
908.3
|
932.1
|
(23.8)
|
(3)
%
|
|||||||
|
Realized performance revenues
|
38.0
|
225.2
|
(187.2)
|
(83)
%
|
599.8
|
728.7
|
(128.9)
|
(18)
%
|
|||||||
|
Realized principal investment
income (loss)
|
(0.4)
|
10.0
|
(10.4)
|
NM
|
27.1
|
35.7
|
(8.6)
|
(24)
%
|
|||||||
|
Interest income
|
7.4
|
7.7
|
(0.3)
|
(4)
%
|
18.9
|
21.8
|
(2.9)
|
(13)
%
|
|||||||
|
Total revenues
|
346.5
|
547.4
|
(200.9)
|
(37)
%
|
1,554.1
|
1,718.3
|
(164.2)
|
(10)
%
|
|||||||
|
Segment Expenses
|
|||||||||||||||
|
Compensation and benefits
|
|||||||||||||||
|
Cash-based compensation and
benefits
|
97.4
|
101.1
|
(3.7)
|
(4)
%
|
306.5
|
314.3
|
(7.8)
|
(2)
%
|
|||||||
|
Realized performance revenues
related compensation
|
24.2
|
141.5
|
(117.3)
|
(83)
%
|
385.5
|
457.2
|
(71.7)
|
(16)
%
|
|||||||
|
Total compensation and
benefits
|
121.6
|
242.6
|
(121.0)
|
(50)
%
|
692.0
|
771.5
|
(79.5)
|
(10)
%
|
|||||||
|
General, administrative, and other
indirect expenses
(1)
|
56.2
|
48.5
|
7.7
|
16
%
|
155.2
|
137.3
|
17.9
|
13
%
|
|||||||
|
Depreciation and amortization
expense
|
7.6
|
6.7
|
0.9
|
13
%
|
21.5
|
19.6
|
1.9
|
10
%
|
|||||||
|
Interest expense
|
14.3
|
14.1
|
0.2
|
1
%
|
41.1
|
42.2
|
(1.1)
|
(3)
%
|
|||||||
|
Total expenses
|
199.7
|
311.9
|
(112.2)
|
(36)
%
|
909.8
|
970.6
|
(60.8)
|
(6)
%
|
|||||||
|
(=) Distributable Earnings
|
$
146.8
|
$
235.5
|
$
(88.7)
|
(38)
%
|
$
644.3
|
$
747.7
|
$
(103.4)
|
(14)
%
|
|||||||
|
(-) Realized Net Performance
Revenues
|
13.8
|
83.7
|
(69.9)
|
(84)
%
|
214.3
|
271.5
|
(57.2)
|
(21)
%
|
|||||||
|
(-) Realized Principal Investment
Income (loss)
|
(0.4)
|
10.0
|
(10.4)
|
NM
|
27.1
|
35.7
|
(8.6)
|
(24)
%
|
|||||||
|
(+) Net Interest
|
6.9
|
6.4
|
0.5
|
8
%
|
22.2
|
20.4
|
1.8
|
9
%
|
|||||||
|
(=) Fee Related Earnings
|
$
140.3
|
$
148.2
|
$
(7.9)
|
(5)
%
|
$
425.1
|
$
460.9
|
$
(35.8)
|
(8)
%
|
|||||||
(1)
For purposes of presenting our results of operations for this segment, our earnings from our investments in NGP are presented in the
respective operating captions.
97
Distributable Earnings
Distributable Earnings
decreased
$88.7 million
for the
three months ended September 30, 2025
, as compared to the
three
months ended September 30, 2024
, and
decreased
$103.4 million
for the
nine months ended September 30, 2025
, as compared
to the
nine months ended September 30, 2024
. The following table provides the components of the changes in Distributable
Earnings for the
three and nine months ended September 30, 2025
:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||
|
2025 v. 2024
|
|||
|
(Dollars in millions)
|
|||
|
Distributable Earnings, September 30, 2024
|
$
235.5
|
$
747.7
|
|
|
Increases (decreases):
|
|||
|
Decrease in fee related earnings
|
(7.9)
|
(35.8)
|
|
|
Decrease in realized net performance revenues
|
(69.9)
|
(57.2)
|
|
|
Decrease in realized principal investment income
|
(10.4)
|
(8.6)
|
|
|
Increase in net interest
|
(0.5)
|
(1.8)
|
|
|
Total decrease
|
(88.7)
|
(103.4)
|
|
|
Distributable Earnings, September 30, 2025
|
$
146.8
|
$
644.3
|
|
Realized Net Performance Revenues
.
Realized net performance revenues
decreased
$69.9 million
for the
three months
ended September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
decreased
$57.2 million
for the
nine months ended September 30, 2025
, as compared to the
nine months ended September 30, 2024
. Realized net performance
revenues for the
three months ended September 30, 2025
were primarily attributable to realizations in CJP III and CRP VIII.
Realized net performance revenues for the
nine months ended September 30, 2025
were primarily attributable to realizations in
CPP II, NGP XI, CAP IV, and CETP IV. Realized net performance revenues for the
three and nine months ended September
30, 2024
were primarily attributable to realizations in CAP IV, CETP III, and CJP III. Additionally, the nine months ended
September 30, 2024 included realizations in CIEP I.
While overall exit activity increased in the nine months ended September
30, 2025 relative to the comparable 2024 period, the mix of exits was more concentrated in funds not yet realizing performance
revenues
.
Fee Related Earnings
Fee Related Earnings
decreased
$7.9 million
for the
three months ended September 30, 2025
, as compared to the
three
months ended September 30, 2024
, and
decreased
$35.8 million
for the
nine months ended September 30, 2025
, as compared to
the
nine months ended September 30, 2024
. The following table provides the components of the changes in Fee Related
Earnings for the
three and nine months ended September 30, 2025
:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||
|
2025 v. 2024
|
|||
|
(Dollars in millions)
|
|||
|
Fee Related Earnings, September 30, 2024
|
$
148.2
|
$
460.9
|
|
|
Increases (decreases):
|
|||
|
Decrease in fee revenues
|
(3.0)
|
(23.8)
|
|
|
Decrease in cash-based compensation and benefits
|
3.7
|
7.8
|
|
|
Increase in general, administrative and other indirect expenses
|
(7.7)
|
(17.9)
|
|
|
All other changes
|
(0.9)
|
(1.9)
|
|
|
Total decrease
|
(7.9)
|
(35.8)
|
|
|
Fee Related Earnings, September 30, 2025
|
$
140.3
|
$
425.1
|
|
98
Fee Revenues.
Total fee revenues
decreased
$3.0 million
for the
three months ended September 30, 2025
, as compared to
the
three months ended September 30, 2024
, and
decreased
$23.8 million
for the
nine months ended September 30, 2025
, as
compared to the
nine months ended September 30, 2024
, due to the following:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||
|
2025 v. 2024
|
|||
|
(Dollars in millions)
|
|||
|
Lower fund management fees
|
$
(3.6)
|
$
(28.0)
|
|
|
Higher portfolio advisory and transaction fees, net and other
|
0.6
|
11.1
|
|
|
Lower fee related performance revenues
|
—
|
(6.9)
|
|
|
Total decrease in fee revenues
|
$
(3.0)
|
$
(23.8)
|
|
The
decrease
in fund management fees for the
nine months ended September 30, 2025
as compared to the
nine months
ended September 30, 2024
was primarily due to step-downs in management fee basis on CEP V and CRP IX in the fourth
quarter of 2024, as well as net investment realizations in funds on which management fees are based on invested capital. These
were partially offset by the activation of fees in CJP V, which turned on fees in the fourth quarter of 2024, as well as CRP X,
which turned on fees on April 1, 2025. The impact of smaller buyout funds in our corporate private equity strategy is resulting
in, and may continue to result in, lower fund management fees relative to prior periods.
The increase in portfolio advisory and transaction fees, net and other for the
nine months ended September 30, 2025
as
compared to the
nine months ended September 30, 2024
was primarily due to an increase in transaction fees. Transaction fees
are primarily generated by investment activity within our funds, and are therefore impacted by our investment pace. See “—
Trends Affecting Our Business” for further discussion on our investment activity and broader market trends.
General, administrative and other indirect expenses
. General, administrative and other indirect expenses
increased
$7.7
million
for the
three months ended September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
increased
$17.9 million
for the
nine months ended September 30, 2025
, as compared to the
nine months ended September 30,
2024
. The increase for the
three months ended September 30, 2025
, as compared to the
three months ended September 30, 2024
was primarily attributable to
an increase in
professional
fees
. The increase for the
nine months ended September 30, 2025
was
primarily attributable to an increase in costs related to funds in fundraising, an increase in
professional fees
, and a lower
reversal of value-added tax expense in Asia. These were partially offset by foreign exchange gains for the
nine months ended
September 30, 2025
compared to foreign exchange losses for the
nine months ended September 30, 2024
.
Fee-earning AUM
Fee-earning AUM is presented below for each period together with the components of change during each respective
period.
|
|
As of September 30,
|
||
|
|
2025
|
2024
|
|
|
Global Private Equity
|
(Dollars in millions)
|
||
|
Components of Fee-earning AUM
(1)
|
|||
|
Fee-earning AUM based on capital commitments
|
$
41,525
|
$
48,295
|
|
|
Fee-earning AUM based on invested capital
|
49,232
|
44,665
|
|
|
Fee-earning AUM based on net asset value
|
7,472
|
7,200
|
|
|
Fee-earning AUM based on lower of cost or fair value
|
2,918
|
3,363
|
|
|
Total Fee-earning AUM
|
$
101,147
|
$
103,523
|
|
|
Annualized Management Fee Rate
(2)
|
1.17
%
|
1.15
%
|
|
(1)
For additional information concerning the components of Fee-earning AUM, see “—Key Financial Measures—Operating Metrics.”
(2)
Represents annualized fund management fees divided by the average of the beginning of year and each quarter end’s Fee-earning AUM
in the reporting period. Catch-up management fees were excluded in the calculation of the annualized fund management fees.
99
The table below provides the period to period rollforward of Fee-earning AUM.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
Global Private Equity
|
(Dollars in millions)
|
||||||
|
Fee-earning AUM Rollforward
|
|||||||
|
Balance, Beginning of Period
|
$
102,330
|
$
103,662
|
$
98,033
|
$
106,651
|
|||
|
Inflows
(1)
|
413
|
508
|
11,079
|
4,192
|
|||
|
Outflows (including realizations)
(2)
|
(1,583)
|
(1,376)
|
(9,599)
|
(7,246)
|
|||
|
Market Activity & Other
(3)
|
97
|
(42)
|
(161)
|
(150)
|
|||
|
Foreign Exchange
(4)
|
(110)
|
771
|
1,795
|
76
|
|||
|
Balance, End of Period
|
$
101,147
|
$
103,523
|
$
101,147
|
$
103,523
|
|||
(1)
Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based
on commitments were activated during the period, and the fee-earning commitments invested in vehicles for which management fees
are based on invested capital. Inflows exclude fundraising amounts during the period for which fees have not yet been activated, which
are referenced as Pending Fee-earning AUM.
(2)
Outflows represents the impact of realizations from vehicles with management fees based on remaining invested capital at cost or fair
value, changes in basis for funds where the investment period, weighted-average investment period or commitment fee period has
expired during the period, and reductions for funds that are no longer calling for fees. Realizations for funds earning management fees
based on commitments during the period do not affect Fee-earning AUM.
(3)
Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the
lower of cost or fair value.
(4)
Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated
funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the
period end.
Fee-earning AUM of
$101.1 billion
at
September 30, 2025
decreased
1%
from
$102.3 billion
at
June 30, 2025
. The net
decrease
was due to:
•
Outflows of
$1.6 billion
, driven by realization in funds that charge fees on invested capital, notably in the NGP
energy funds and CP VII, as well as redemptions in CPI.
Offsetting these
decrease
s were:
•
Inflows of
$0.4 billion
, primarily driven by investments in CPI.
Fee-earning AUM of
$101.1 billion
at
September 30, 2025
increased
3%
from
$98.0 billion
at
December 31, 2024
. The
net
increase
was due to:
•
Inflows of
$11.1 billion
, which included the activation of management fees in CRP X, additional fee-paying capital
raised in CAP VI, and investments in our U.S. real estate, Asia buyout, and Europe buyout funds which charge fees
on invested capital; and
•
Positive foreign exchange activity of
$1.8 billion
reflecting the translation of our EUR- and JPY-denominated funds
to USD.
Offsetting these
increase
s were:
•
Outflows of
$9.6 billion
, which included realizations in funds that charge fees on invested capital, notably in the
NGP energy funds and our U.S. buyout, Europe buyout, Asia buyout, and U.S. real estate funds, as well as the
expiration of fees in CP VI during the period, and a fee basis step-down in CIEP II.
Fee-earning AUM of
$101.1 billion
at
September 30, 2025
decreased
2%
from
$103.5 billion
at
September 30, 2024
. The
net
decrease
was due to:
•
Outflows of
$17.3 billion
driven by realizations in funds that charge fees on invested capital, fee basis step-downs in
CRP IX, CEP V, and CIEP II, and the expiration of fees in CP VI during the period.
100
Offsetting these
decrease
s were:
•
Inflows of
$14.6 billion
primarily from the activation of fees in CRP X and CJP V, additional fee-paying capital
raised in CAP VI, and investments in funds which charge fees on invested capital; and
•
Positive foreign exchange activity of
$0.6 billion
reflecting the translation of our EUR- and JPY-denominated funds
to USD.
Total AUM
The table below provides the period to period rollforward of Total AUM.
|
|
Three Months Ended
September 30, 2025
|
Nine Months Ended
September 30, 2025
|
|
|
|
(Dollars in millions)
|
||
|
Global Private Equity
|
|||
|
Total AUM Rollforward
|
|||
|
Balance, Beginning of Period
|
$
165,057
|
$
163,533
|
|
|
Inflows
(1)
|
646
|
6,202
|
|
|
Outflows (including realizations)
(2)
|
(2,685)
|
(12,335)
|
|
|
Market Activity & Other
(3)
|
589
|
3,068
|
|
|
Foreign Exchange
(4)
|
(157)
|
2,982
|
|
|
Balance, End of Period
|
$
163,450
|
$
163,450
|
|
(1)
Inflows reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects
translation at the average quarterly rate.
(2)
Outflows includes distributions net of recallable or recyclable amounts in our carry funds, related co-investment vehicles, and
separately managed accounts, gross redemptions in our open-ended funds, and the expiration of available capital.
(3)
Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related
co-investment vehicles, and separately managed accounts, as well as the impact of fees, expenses and non-investment income, and
other changes in AUM.
(4)
Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated
funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the
period end.
Total AUM was
$163.5 billion
at
September 30, 2025
, a
decrease
of
1%
from
$165.1 billion
at
June 30, 2025
. The net
decrease
was due to:
•
Outflows of
$2.7 billion
driven by realizations in our U.S. buyout and U.S. real estate funds, as well as the NGP
energy funds.
Offsetting these
decrease
s were:
•
Inflows of
$0.6 billion
, driven by capital raised in our U.S. real estate funds; and
•
Market appreciation of
$0.6 billion
, which reflected appreciation generally across the portfolio, net of depreciation
in
CP VII ($0.
4
billion) and CAP V ($0.3 billion), the portfolios of which were impacted by market price decreases
in certain public investments.
Total AUM was
$163.5 billion
at
September 30, 2025
, flat compared to
$163.5 billion
at
December 31, 2024
. This was
due to:
•
Outflows of
$12.3 billion
, driven by realizations across the segment, notably in our U.S. buyout, power, and U.S.
real estate funds, as well as the NGP energy funds.
Offsetting these
decrease
s were:
•
Inflows of
$6.2 billion
, driven by new capital raised in our U.S. real estate and Asia buyout funds, as well as the
NGP energy funds;
101
•
Market appreciation of
$3.1 billion
, driven by appreciation in CP VII ($0.9 billion), CP VIII ($0.7 billion), and CGP
II ($0.5 billion), partially offset by depreciation in CEP V ($0.8 billion); and
•
Positive foreign exchange activity of
$3.0 billion
reflecting the translation of our EUR- and JPY-denominated funds
to USD.
Fund Performance Metrics
Fund performance information for our investment funds that generally have at least $1.0 billion in capital commitments,
cumulative equity invested or total value as of
September 30, 2025
, which we refer to as our “significant funds,” is included
throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The
fund return information reflected in this discussion and analysis is not indicative of the performance of The Carlyle Group Inc.
and is also not necessarily indicative of the future performance of any particular fund. An investment in The Carlyle Group Inc.
is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds
will achieve similar returns.
The following table reflects the performance of our significant funds in our Global Private Equity business. Please see
“—Our Global Investment Offerings” for a legend of the fund acronyms listed below.
102
|
(Amounts in millions)
|
TOTAL INVESTMENTS
|
REALIZED/PARTIALLY
REALIZED INVESTMENTS(12)
|
||||||||||||
|
|
As of September 30, 2025
|
As of September 30, 2025
|
||||||||||||
|
Fund (Fee Initiation Date/Step-down Date)(1)
|
Committed
Capital(2)
|
Cumulative
Invested
Capital(3)
|
Percent
Invested
|
Realized
Value(4)
|
Remaining
Fair
Value(5)
|
MOIC
(6)
|
Gross
IRR
(7)(8)
|
Net
IRR
(8)(9)
|
Net Accrued
Carry/
(Giveback)
(10)
|
Total
Fair
Value(11)
|
MOIC
(6)
|
Gross
IRR
(7)(8)
|
||
|
Corporate Private Equity
|
||||||||||||||
|
CP VIII (Oct 2021 / Oct 2027)
|
$
14,797
|
$
10,603
|
72%
|
$
1,691
|
$
13,028
|
1.4x
|
19%
|
9%
|
$
157
|
$
2,161
|
1.7x
|
58%
|
||
|
CP VII (May 2018 / Oct 2021)
|
$
18,510
|
$
17,787
|
96%
|
$
7,864
|
$
21,235
|
1.6x
|
11%
|
8%
|
$
438
|
$
7,791
|
1.7x
|
13%
|
||
|
CP VI (May 2013 / May 2018)
|
$
13,000
|
$
13,140
|
101%
|
$
25,565
|
$
3,064
|
2.2x
|
18%
|
13%
|
$
126
|
$
26,348
|
2.5x
|
22%
|
||
|
CP V (Jun 2007 / May 2013)
|
$
13,720
|
$
13,238
|
96%
|
$
28,117
|
$
451
|
2.2x
|
18%
|
14%
|
$
31
|
$
28,136
|
2.3x
|
20%
|
||
|
CEP V (Oct 2018 / Oct 2024)
|
€
6,416
|
€
6,081
|
95%
|
€
1,626
|
€
4,981
|
1.1x
|
1%
|
Neg
|
$
—
|
€
541
|
0.8x
|
Neg
|
||
|
CEP IV (Sep 2014 / Oct 2018)
|
€
3,670
|
€
3,966
|
108%
|
€
6,210
|
€
1,331
|
1.9x
|
16%
|
11%
|
$
58
|
€
6,250
|
2.1x
|
20%
|
||
|
CEP III (Jul 2007 / Dec 2013)
|
€
5,295
|
€
5,177
|
98%
|
€
11,730
|
€
19
|
2.3x
|
19%
|
14%
|
$
2
|
€
11,749
|
2.3x
|
19%
|
||
|
CAP VI (Jun 2024 / Jun 2030)
|
$
2,852
|
$
—
|
—%
|
$
—
|
$
—
|
n/a
|
n/a
|
n/a
|
$
—
|
n/a
|
n/a
|
n/a
|
||
|
CAP V (Jun 2018 / Jun 2024)
|
$
6,554
|
$
6,875
|
105%
|
$
3,018
|
$
6,606
|
1.4x
|
13%
|
8%
|
$
3
|
$
2,142
|
1.3x
|
23%
|
||
|
CAP IV (Jul 2013 / Jun 2018)
|
$
3,880
|
$
4,146
|
107%
|
$
8,667
|
$
303
|
2.2x
|
18%
|
13%
|
$
18
|
$
8,704
|
2.4x
|
21%
|
||
|
CJP V (Nov 2024 / Nov 2030)
|
¥
434,325
|
¥
—
|
—%
|
¥
—
|
¥
—
|
n/a
|
n/a
|
n/a
|
$
—
|
n/a
|
n/a
|
n/a
|
||
|
CJP IV (Oct 2020 / Nov 2024)
|
¥
258,000
|
¥
234,357
|
91%
|
¥
148,550
|
¥
297,425
|
1.9x
|
36%
|
24%
|
$
86
|
¥
180,929
|
3.4x
|
64%
|
||
|
CJP III (Sep 2013 / Aug 2020)
|
¥
119,505
|
¥
91,192
|
76%
|
¥
273,641
|
¥
10,454
|
3.1x
|
25%
|
18%
|
$
5
|
¥
274,341
|
3.3x
|
26%
|
||
|
CGFSP III (Dec 2017 / Dec 2023)
|
$
1,005
|
$
977
|
97%
|
$
532
|
$
1,733
|
2.3x
|
22%
|
16%
|
$
78
|
$
1,035
|
4.1x
|
34%
|
||
|
CGFSP II (Jun 2013 / Dec 2017)
|
$
1,000
|
$
943
|
94%
|
$
1,961
|
$
638
|
2.8x
|
26%
|
19%
|
$
37
|
$
1,956
|
2.4x
|
28%
|
||
|
CP Growth (Oct 2021 / Oct 2027)
|
$
1,283
|
$
673
|
52%
|
$
—
|
$
812
|
1.2x
|
NM
|
NM
|
$
—
|
n/a
|
n/a
|
n/a
|
||
|
CEOF II (Nov 2015 / Mar 2020)
|
$
2,400
|
$
2,368
|
99%
|
$
4,107
|
$
1,437
|
2.3x
|
21%
|
15%
|
$
72
|
$
4,673
|
2.5x
|
23%
|
||
|
CETP V (Mar 2022 / Jun 2028)
|
€
3,180
|
€
1,528
|
48%
|
€
—
|
€
1,765
|
1.2x
|
NM
|
NM
|
$
—
|
n/a
|
n/a
|
n/a
|
||
|
CETP IV (Jul 2019 / Jun 2022)
|
€
1,350
|
€
1,201
|
89%
|
€
1,345
|
€
1,423
|
2.3x
|
30%
|
21%
|
$
60
|
€
1,344
|
4.4x
|
74%
|
||
|
CETP III (Jul 2014 / Jul 2019)
|
€
657
|
€
610
|
93%
|
€
1,752
|
€
333
|
3.4x
|
40%
|
28%
|
$
20
|
€
1,757
|
3.8x
|
45%
|
||
|
CGP II (Dec 2020 / Jan 2025)
|
$
1,840
|
$
984
|
53%
|
$
198
|
$
1,859
|
2.1x
|
24%
|
19%
|
$
42
|
n/a
|
n/a
|
n/a
|
||
|
CGP (Jan 2015 / Mar 2021)
|
$
3,588
|
$
3,235
|
90%
|
$
1,583
|
$
2,738
|
1.3x
|
4%
|
3%
|
$
16
|
$
1,817
|
2.3x
|
16%
|
||
|
All Other Active Funds & Vehicles(13)
|
$
20,790
|
n/a
|
$
15,495
|
$
17,090
|
1.6x
|
12%
|
10%
|
$
45
|
$
15,526
|
2.0x
|
18%
|
|||
|
Fully Realized Funds & Vehicles(14)(15)
|
$
35,574
|
n/a
|
$
81,709
|
$
2
|
2.3x
|
28%
|
20%
|
$
2
|
$
81,711
|
2.3x
|
28%
|
|||
|
TOTAL CORPORATE PRIVATE EQUITY(16)
|
$
155,358
|
n/a
|
$
210,005
|
$
84,661
|
1.9x
|
25%
|
17%
|
$
1,295
|
$
210,523
|
2.3x
|
26%
|
|||
|
Real Estate
|
||||||||||||||
|
CRP X (Apr 2025 / Jul 2030)
|
$
9,000
|
$
372
|
4%
|
$
—
|
$
360
|
1.0x
|
NM
|
NM
|
$
—
|
n/a
|
n/a
|
n/a
|
||
|
CRP IX (Oct 2021 / Dec 2024)
|
$
7,987
|
$
6,012
|
75%
|
$
432
|
$
6,722
|
1.2x
|
12%
|
3%
|
$
—
|
$
409
|
1.4x
|
25%
|
||
|
CRP VIII (Aug 2017 / Oct 2021)
|
$
5,505
|
$
5,123
|
93%
|
$
5,677
|
$
3,251
|
1.7x
|
32%
|
18%
|
$
87
|
$
5,624
|
2.1x
|
49%
|
||
|
CRP VII (Jun 2014 / Dec 2017)
|
$
4,162
|
$
3,821
|
92%
|
$
5,098
|
$
1,169
|
1.6x
|
16%
|
10%
|
$
—
|
$
5,063
|
1.7x
|
20%
|
||
|
CRP VI (Mar 2011 / Jun 2014)
|
$
2,340
|
$
2,155
|
92%
|
$
3,815
|
$
118
|
1.8x
|
27%
|
17%
|
$
4
|
$
3,748
|
1.9x
|
28%
|
||
|
CPI (May 2016 / n/a)
|
$
8,249
|
$
8,706
|
106%
|
$
3,390
|
$
7,965
|
1.3x
|
10%
|
8%
|
n/a*
|
$
2,161
|
1.7x
|
12%
|
||
|
All Other Active Funds & Vehicles(17)
|
$
2,599
|
n/a
|
$
505
|
$
2,498
|
1.2x
|
9%
|
5%
|
$
5
|
$
340
|
1.1x
|
20%
|
|||
|
Fully Realized Funds & Vehicles(15)(18)
|
$
14,293
|
n/a
|
$
21,641
|
$
13
|
1.5x
|
9%
|
5%
|
$
—
|
$
21,654
|
1.5x
|
10%
|
|||
|
TOTAL REAL ESTATE(16)
|
$
43,082
|
n/a
|
$
40,558
|
$
22,095
|
1.5x
|
11%
|
7%
|
$
96
|
$
38,998
|
1.6x
|
13%
|
|||
|
Infrastructure & Natural Resources
|
||||||||||||||
|
CIEP II (Apr 2019 / Apr 2025)
|
$
2,286
|
$
1,008
|
44%
|
$
799
|
$
1,098
|
1.9x
|
26%
|
12%
|
$
36
|
$
752
|
3.2x
|
NM**
|
||
|
CIEP I (Sep 2013 / Jun 2019)
|
$
2,500
|
$
2,470
|
99%
|
$
3,372
|
$
1,374
|
1.9x
|
15%
|
9%
|
$
48
|
$
3,750
|
2.2x
|
18%
|
||
|
CGIOF (Dec 2018 / Sep 2023)
|
$
2,201
|
$
2,098
|
95%
|
$
658
|
$
2,926
|
1.7x
|
18%
|
11%
|
$
82
|
$
792
|
1.8x
|
16%
|
||
|
CRSEF II (Nov 2022 / Aug 2027)
|
$
1,187
|
$
492
|
41%
|
$
—
|
$
835
|
1.7x
|
NM
|
NM
|
$
16
|
n/a
|
n/a
|
n/a
|
||
|
NGP XIII (Feb 2023 / Feb 2028)
|
$
2,300
|
$
491
|
21%
|
$
49
|
$
732
|
1.6x
|
NM
|
NM
|
$
4
|
$
91
|
3.3x
|
NM
|
||
|
NGP XII (Jul 2017 / Jul 2022)
|
$
4,304
|
$
3,652
|
85%
|
$
4,779
|
$
2,747
|
2.1x
|
21%
|
15%
|
$
32
|
$
4,456
|
2.8x
|
33%
|
||
|
NGP XI (Oct 2014 / Jul 2017)
|
$
5,325
|
$
5,034
|
95%
|
$
8,112
|
$
1,709
|
2.0x
|
13%
|
10%
|
$
64
|
$
7,380
|
2.1x
|
17%
|
||
|
NGP X (Jan 2012 / Dec 2014)
|
$
3,586
|
$
3,351
|
93%
|
$
3,458
|
$
307
|
1.1x
|
3%
|
—%
|
$
—
|
$
3,272
|
1.2x
|
5%
|
||
|
All Other Active Funds & Vehicles(19)
|
$
5,029
|
n/a
|
$
3,191
|
$
4,783
|
1.6x
|
15%
|
12%
|
$
31
|
$
3,156
|
2.3x
|
19%
|
|||
|
Fully Realized Funds & Vehicles(15)(20)
|
$
3,534
|
n/a
|
$
5,574
|
$
6
|
1.6x
|
8%
|
5%
|
$
1
|
$
5,579
|
1.6x
|
8%
|
|||
|
TOTAL INFRASTRUCTURE & NATURAL
RESOURCES(16)
|
$
27,157
|
n/a
|
$
29,991
|
$
16,516
|
1.7x
|
12%
|
8%
|
$
314
|
$
29,228
|
1.9x
|
14%
|
|||
103
*Net accrued fee related performance revenues for CPI are excluded from Net Accrued Performance Revenues. These amounts will be
reflected as fee related performance revenues when realized, and included in Fund level fee revenues in our segment results. There were no
accrued fee related performance revenues for CPI as of
September 30, 2025
.
**The IRR is incalculable, which occurs in instances when a distribution occurs prior to a Limited Partner capital contribution due to the use
of fund-level credit facilities.
(1)
The fund step-down date represents the contractual step-down date under the respective fund agreements for funds on
which the fee basis step-down has not yet occurred. Funds without a listed Fee Initiation Date and Step-down Date have
not yet initiated fees.
(2)
All amounts shown represent total capital commitments as of September 30, 2025. Certain of our recent vintage funds are
currently in fundraising and total capital commitments are subject to change.
(3)
Represents the original cost of investments since inception of the fund.
(4)
Represents all realized proceeds since inception of the fund.
(5)
Represents remaining fair value, before management fees, expenses and carried interest, and may include remaining
escrow values for realized investments.
(6)
Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried interest,
divided by cumulative invested capital.
(7)
Gross Internal Rate of Return (“Gross IRR”) represents an annualized time-weighted return on Limited Partner invested
capital, based on contributions, distributions and unrealized fair value as of the reporting date, before the impact of
management fees, partnership expenses and carried interest. For fund vintages 2017 and after, Gross IRR includes the
impact of interest expense related to the funding of investments on fund lines of credit. Gross IRR is calculated based on
the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment cash
flows for the fund. Subtotal Gross IRR aggregations for multiple funds are calculated based on actual cash flow dates for
each fund and represent a theoretical time-weighted return for a Limited Partner who invested sequentially in each fund.
(8)
For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time
since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is considered meaningful
but is negative as of reporting period end.
(9)
Net Internal Rate of Return (“Net IRR”) represents an annualized time-weighted return on Limited Partner invested
capital, based on contributions, distributions and unrealized fair value as of the reporting date, after the impact of all
management fees, partnership expenses and carried interest, including current accruals. Net IRR is calculated based on
the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment cash
flows for the fund. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may differ
from that of individual Limited Partners. As a result, certain funds may generate accrued performance revenues with a
blended Net IRR that is below the preferred return hurdle for that fund. Subtotal Net IRR aggregations for multiple funds
are calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted return for a
Limited Partner who invested sequentially in each fund.
(10)
Represents the net accrued performance revenue balance/(giveback obligation) as of the current quarter end.
(11)
Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried
interest.
(12)
An investment is considered realized when the investment fund has completely exited, and ceases to own an interest in,
the investment. An investment is considered partially realized when the total amount of proceeds received in respect of
such investment, including dividends, interest or other distributions and/or return of capital, represents at least 85% of
invested capital and such investment is not yet fully realized. Because part of our value creation strategy involves
pursuing best exit alternatives, we believe information regarding Realized/Partially Realized MOIC and Gross IRR, when
considered together with the other investment performance metrics presented, provides investors with meaningful
information regarding our investment performance by removing the impact of investments where significant realization
activity has not yet occurred. Realized/Partially Realized MOIC and Gross IRR have limitations as measures of
investment performance and should not be considered in isolation. Such limitations include the fact that these measures
do not include the performance of earlier stage and other investments that do not satisfy the criteria provided above. The
exclusion of such investments will have a positive impact on Realized/Partially Realized MOIC and Gross IRR in
instances when the MOIC and Gross IRR in respect of such investments are less than the aggregate MOIC and Gross
IRR. Our measurements of Realized/Partially Realized MOIC and Gross IRR may not be comparable to those of other
companies that use similarly titled measures.
(13)
Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and
stand-alone investments arranged by us: MENA, CCI, CSSAF I, CPF I, CAP Growth I, CAP Growth II, CBPF II, CAGP
IV, ABV 8, ABV 9, ACCD 2 and CCD-CIF.
(14)
Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and
certain other stand-alone investments arranged by us: CP I, CP II, CP III, CP IV, CEP I, CEP II, CAP I, CAP II, CAP III,
104
CBPF I, CJP I, CJP II, CMG, CVP I, CVP II, CUSGF III, CGFSP I, CEVP I, CETP I, CETP II, CAVP I, CAVP II,
CAGP III, CEOF I, Mexico and CSABF.
(15)
Funds are included when all investments have been realized. There may be remaining fair value and net accrued carry
where there are outstanding escrow balances or undistributed proceeds.
(16)
For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting
period spot rate.
(17)
Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and
stand-alone investments arranged by us: CCR, CER I, and CER II.
(18)
Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and
certain other stand-alone investments arranged by us: CRP I, CRP II, CRP III, CRP IV, CRP V, CRCP I, CAREP I,
CAREP II, CEREP I, CEREP II and CEREP III.
(19)
Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and
stand-alone investments arranged by us: NGP GAP, NGP RP I, NGP RP II, NGP RP III, NGP ETP IV, CPOCP, and
CRSEF.
(20)
Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and
certain other stand-alone investments arranged by us: CIP and CPP II.
105
Global Credit
The following table presents our results of operations for our Global Credit segment:
|
|
Three Months Ended
September 30,
|
Change
|
Nine Months Ended
September 30,
|
Change
|
|||||||||||
|
|
2025
|
2024
|
$
|
%
|
2025
|
2024
|
$
|
%
|
|||||||
|
|
(Dollars in millions)
|
||||||||||||||
|
Segment Revenues
|
|||||||||||||||
|
Fund level fee revenues
|
|||||||||||||||
|
Fund management fees
|
$
146.5
|
$
142.8
|
$
3.7
|
3
%
|
$
456.1
|
$
420.5
|
$
35.6
|
8
%
|
|||||||
|
Portfolio advisory and
transaction fees, net and other
|
25.6
|
21.4
|
4.2
|
20
%
|
130.0
|
66.0
|
64.0
|
97
%
|
|||||||
|
Fee related performance
revenues
|
28.6
|
29.0
|
(0.4)
|
(1)
%
|
86.0
|
81.2
|
4.8
|
6
%
|
|||||||
|
Total fund level fee revenues
|
200.7
|
193.2
|
7.5
|
4
%
|
672.1
|
567.7
|
104.4
|
18
%
|
|||||||
|
Realized performance revenues
|
8.2
|
11.5
|
(3.3)
|
(29)
%
|
26.6
|
19.0
|
7.6
|
40
%
|
|||||||
|
Realized principal investment
income (loss)
|
42.8
|
(2.8)
|
45.6
|
NM
|
60.3
|
30.2
|
30.1
|
100
%
|
|||||||
|
Interest income
|
8.1
|
9.8
|
(1.7)
|
(17)
%
|
22.1
|
30.6
|
(8.5)
|
(28)
%
|
|||||||
|
Total revenues
|
259.8
|
211.7
|
48.1
|
23
%
|
781.1
|
647.5
|
133.6
|
21
%
|
|||||||
|
Segment Expenses
|
|||||||||||||||
|
Compensation and benefits
|
|||||||||||||||
|
Cash-based compensation and
benefits
|
83.8
|
76.5
|
7.3
|
10
%
|
261.0
|
227.3
|
33.7
|
15
%
|
|||||||
|
Realized performance revenues
related compensation
|
4.7
|
6.9
|
(2.2)
|
(32)
%
|
15.7
|
11.5
|
4.2
|
37
%
|
|||||||
|
Total compensation and
benefits
|
88.5
|
83.4
|
5.1
|
6
%
|
276.7
|
238.8
|
37.9
|
16
%
|
|||||||
|
General, administrative, and other
indirect expenses
|
28.5
|
31.2
|
(2.7)
|
(9)
%
|
99.7
|
96.1
|
3.6
|
4
%
|
|||||||
|
Depreciation and amortization
expense
|
4.3
|
3.3
|
1.0
|
30
%
|
12.0
|
9.6
|
2.4
|
25
%
|
|||||||
|
Interest expense
|
12.1
|
13.3
|
(1.2)
|
(9)
%
|
34.9
|
40.6
|
(5.7)
|
(14)
%
|
|||||||
|
Total expenses
|
133.4
|
131.2
|
2.2
|
2
%
|
423.3
|
385.1
|
38.2
|
10
%
|
|||||||
|
(=) Distributable Earnings
|
$
126.4
|
$
80.5
|
$
45.9
|
57
%
|
$
357.8
|
$
262.4
|
$
95.4
|
36
%
|
|||||||
|
(-) Realized Net Performance
Revenues
|
3.5
|
4.6
|
(1.1)
|
(24)
%
|
10.9
|
7.5
|
3.4
|
45
%
|
|||||||
|
(-) Realized Principal Investment
Income (loss)
|
42.8
|
(2.8)
|
45.6
|
NM
|
60.3
|
30.2
|
30.1
|
100
%
|
|||||||
|
(+) Net Interest
|
4.0
|
3.5
|
0.5
|
14
%
|
12.8
|
10.0
|
2.8
|
28
%
|
|||||||
|
(=) Fee Related Earnings
|
$
84.1
|
$
82.2
|
$
1.9
|
2
%
|
$
299.4
|
$
234.7
|
$
64.7
|
28
%
|
|||||||
106
Distributable Earnings
Distributable Earnings
increased
$45.9 million
for the
three months ended September 30, 2025
, as compared to the
three
months ended September 30, 2024
, and
increased
$95.4 million
for the
nine months ended September 30, 2025
, as compared to
the
nine months ended September 30, 2024
. The following table provides the components of the changes in Distributable
Earnings for the
three and nine months ended September 30, 2025
:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||
|
2025 v. 2024
|
|||
|
(Dollars in millions)
|
|||
|
Distributable Earnings, September 30, 2024
|
$
80.5
|
$
262.4
|
|
|
Increases (decreases):
|
|||
|
Increase in fee related earnings
|
1.9
|
64.7
|
|
|
(Decrease) increase in realized net performance revenues
|
(1.1)
|
3.4
|
|
|
Increase in realized principal investment income
|
45.6
|
30.1
|
|
|
Increase in net interest
|
(0.5)
|
(2.8)
|
|
|
Total increase
|
45.9
|
95.4
|
|
|
Distributable Earnings, September 30, 2025
|
$
126.4
|
$
357.8
|
|
Realized Principal Investment Income
. Realized principal investment income
increased
$45.6 million
for the
three months
ended September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
increased
$30.1 million
for the
nine months ended September 30, 2025
, as compared to the
nine months ended September 30, 2024
, primarily attributable to
dividend income received of
$31.4 million
from our equity method investment in Carlyle FRL during the
three months ended
September 30, 2025
. The increase for the
nine months ended September 30, 2025
, as compared to the
nine months ended
September 30, 2024
,
was partially offset by lower realized principal investment income from our CLOs
.
Fee Related Earnings
Fee Related Earnings
increased
$1.9 million
for the
three months ended September 30, 2025
, as compared to the
three
months ended September 30, 2024
, and
increased
$64.7 million
for the
nine months ended September 30, 2025
, as compared to
the
nine months ended September 30, 2024
. The following table provides the components of the changes in Fee Related
Earnings for the
three and nine months ended September 30, 2025
:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||
|
2025 v. 2024
|
|||
|
(Dollars in millions)
|
|||
|
Fee Related Earnings, September 30, 2024
|
$
82.2
|
$
234.7
|
|
|
Increases (decreases):
|
|||
|
Increase in fee revenues
|
7.5
|
104.4
|
|
|
Increase in cash-based compensation and benefits
|
(7.3)
|
(33.7)
|
|
|
Decrease (increase) in general, administrative and other indirect expenses
|
2.7
|
(3.6)
|
|
|
All other changes
|
(1.0)
|
(2.4)
|
|
|
Total increase
|
1.9
|
64.7
|
|
|
Fee Related Earnings, September 30, 2025
|
$
84.1
|
$
299.4
|
|
107
Fee Revenues
. Fee revenues
increased
$7.5 million
for the
three months ended September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
increased
$104.4 million
for the
nine months ended September 30, 2025
, as
compared to the
nine months ended September 30, 2024
, due to the following:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||
|
2025 v. 2024
|
|||
|
(Dollars in millions)
|
|||
|
Higher fund management fees
|
$
3.7
|
$
35.6
|
|
|
Higher portfolio advisory and transaction fees, net and other
|
4.2
|
64.0
|
|
|
(Lower) higher fee related performance revenues
|
(0.4)
|
4.8
|
|
|
Total increase in fee revenues
|
$
7.5
|
$
104.4
|
|
The
increase
in Fund management fees for the
nine months ended September 30, 2025
as compared to the
nine months
ended September 30, 2024
was primarily attributable to the receipt of approximately
$19 million
of catch-up subordinated
management fees in certain aviation funds during the
nine months ended September 30, 2025
, due in part to the collection of
insurance proceeds and in part due to the sale of collateral in those vehicles, and an increase in management fees from our direct
lending business and CTAC. These were partially offset by lower management fees from our liquid credit business.
The
increase
in portfolio advisory and transaction fees, net and other fees for the
three and nine months ended September
30, 2025
as compared to the
three and nine months ended September 30, 2024
was primarily driven by an increase in capital
markets fees. The recognition of capital markets fees can be volatile as they are primarily generated by inve
stment activit
y. See
“—Trends Affecting Our Business” for further discussion on our investment activity and broader market trends.
Cash-based compensation and benefits expense
. Cash-based compensation and benefits expense
increased
$7.3 million
for the
three months ended September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
increased
$33.7 million
for the
nine months ended September 30, 2025
, as compared to the
nine months ended September 30, 2024
,
primarily due to an increase in accrued bonuses related to capital markets fees as well as higher headcount.
Fee-earning AUM
Fee-earning AUM is presented below for each period together with the components of change during each respective
period.
|
|
As of September 30,
|
||
|
|
2025
|
2024
|
|
|
Global Credit
|
(Dollars in millions)
|
||
|
Components of Fee-earning AUM
(1)
|
|||
|
Fee-earning AUM based on capital commitments
|
$
2,504
|
$
2,467
|
|
|
Fee-earning AUM based on invested capital
|
21,110
|
19,220
|
|
|
Fee-earning AUM based on collateral balances, at par
|
43,929
|
46,454
|
|
|
Fee-earning AUM based on net asset value
|
3,821
|
2,409
|
|
|
Fee-earning AUM based on fair value and other
(2)
|
95,800
|
88,611
|
|
|
Total Fee-earning AUM
|
$
167,164
|
$
159,161
|
|
|
Annualized Management Fee Rate
(3)
|
0.37
%
|
0.36
%
|
|
(1)
For additional information concerning the components of Fee-earning AUM, see “—Key Financial Measures—Operating Metrics.”
(2)
Includes the fair value of Fortitude’s general account assets covered by the strategic advisory services agreement and funds with fees
based on gross asset value.
(3)
Represents annualized fund management fees divided by the average of the beginning of year and each quarter end’s Fee-earning AUM
in the reporting period. Catch-up management fees were excluded in the calculation of the annualized fund management fees.
108
The table below provides the period to period rollforward of Fee-earning AUM.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
Global Credit
|
(Dollars in millions)
|
||||||
|
Fee-earning AUM Rollforward
|
|||||||
|
Balance, Beginning of Period
|
$
162,784
|
$
155,437
|
$
154,186
|
$
155,238
|
|||
|
Inflows
(1)
|
8,983
|
2,594
|
21,264
|
10,216
|
|||
|
Outflows (including realizations)
(2)
|
(4,878)
|
(3,137)
|
(11,406)
|
(8,901)
|
|||
|
Market Activity & Other
(3)
|
278
|
3,868
|
1,980
|
2,553
|
|||
|
Foreign Exchange
(4)
|
(3)
|
399
|
1,140
|
55
|
|||
|
Balance, End of Period
|
$
167,164
|
$
159,161
|
$
167,164
|
$
159,161
|
|||
(1)
Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based
on commitments were activated during the period, the fee-earning commitments invested in vehicles for which management fees are
based on invested capital, the fee-earning collateral balance of new CLO issuances, closed reinsurance transactions at Fortitude, and
gross subscriptions in our vehicles for which management fees are based on net asset value.
(2)
Outflows represents the impact of realizations from vehicles with management fees based on remaining invested capital at cost or fair
value, changes in basis for funds where the investment period, weighted-average investment period or commitment fee period has
expired during the period, reductions for funds that are no longer calling for fees, gross redemptions in our open-ended funds, and
outflows from our liquid credit products. Realizations for funds earning management fees based on commitments during the period do
not affect Fee-earning AUM.
(3)
Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in funds or vehicles based on the
lower of cost or fair value or net asset value, activity of funds with fees based on gross asset value, and changes in the fair value of
Fortitude’s general account assets covered by the strategic advisory services agreement.
(4)
Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated
funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the
period end.
Fee-earning AUM was
$167.2 billion
at
September 30, 2025
, an increase of
3%
from
$162.8 billion
at
June 30, 2025
. The
net increase was due to:
•
Inflows of
$9.0 billion
, which were driven by over
$4 billion
of closed reinsurance transactions at Fortitude and
deployment across the platform, including the closing of two U.S. CLOs and two Euro CLOs.
Offsetting these increases were:
•
Outflows of
$4.9 billion
, which included outflows from our liquid credit products and realizations across the
platform.
Fee-earning AUM was
$167.2 billion
at
September 30, 2025
, an increase of
8%
from
$154.2 billion
at
December 31,
2024
. The net increase was due to:
•
Inflows of
$21.3 billion
, which were driven by nearly
$9 billion
of closed reinsurance transactions at Fortitude and
capital deployment across the platform, including the closing of four U.S. CLOs and two Euro CLOs;
•
Positive market activity of
$2.0 billion
, which primarily reflected an increase in the fair value of assets covered by
the Fortitude strategic advisory services agreement, as well as increases in our cross-platform credit and direct
lending products; and
•
Positive foreign exchange activity of
$1.1 billion
reflecting the translation of our EUR-denominated products to
USD.
Offsetting these increases were:
•
Outflows of
$11.4 billion
, which were driven by outflows from our liquid credit products and realizations in our
aviation and opportunistic credit funds.
109
Fee-earning AUM was
$167.2 billion
at
September 30, 2025
, an increase of
5%
from
$159.2 billion
at
September 30,
2024
. The net increase was due to:
•
Inflows of
$26.4 billion
, which reflected capital deployment across the platform, notably in our liquid credit
products, including the closing of eight U.S. CLOs and three Euro CLOs, and asset-backed finance, direct lending,
and opportunistic credit funds, as well as nearly
$9 billion
of closed reinsurance transactions at Fortitude.
Offsetting these increases were:
•
Outflows of
$15.0 billion
, which included outflows from our liquid credit products and realizations across the
platform; and
•
Negative market activity of
$3.9 billion
, which primarily reflected a decrease in the fair value of assets covered by
the Fortitude strategic advisory services agreement, partially offset by increases in our cross-platform credit
products.
Total AUM
The table below provides the period to period rollforward of Total AUM.
|
|
Three Months Ended
September 30, 2025
|
Nine Months Ended
September 30, 2025
|
|
|
|
(Dollars in millions)
|
||
|
Global Credit
|
|||
|
Total AUM Rollforward
|
|||
|
Balance, Beginning of Period
|
$
203,027
|
$
192,374
|
|
|
Inflows
(1)
|
9,900
|
22,882
|
|
|
Outflows (including realizations)
(2)
|
(6,331)
|
(13,065)
|
|
|
Market Activity & Other
(3)
|
1,877
|
5,049
|
|
|
Foreign Exchange
(4)
|
1
|
1,234
|
|
|
Balance, End of Period
|
$
208,474
|
$
208,474
|
|
(1)
Inflows generally reflects the impact of gross fundraising and closed reinsurance transactions at Fortitude during the period. For funds
or vehicles denominated in foreign currencies, this reflects translation at the average quarterly rate.
(2)
Outflows includes distributions net of recallable or recyclable amounts in our carry funds, related co-investment vehicles, and
separately managed accounts, gross redemptions in our open-ended funds, outflows from our liquid credit products, and the expiration
of available capital.
(3)
Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related
co-investment vehicles, and separately managed accounts, as well as the impact of fees, expenses and non-investment income, change
in gross asset value for our business development companies, changes in the fair value of Fortitude’s general account assets covered by
the strategic advisory services agreement, and other changes in AUM.
(4)
Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated
funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the
period end.
Total AUM was
$208.5 billion
at
September 30, 2025
, an increase of
3%
compared to
$203.0 billion
at
June 30, 2025
.
The net increase was due to:
•
Inflows of
$9.9 billion
, which were driven by capital raised in our liquid credit products, including the closing of
two U.S. CLOs and two Euro CLOs, and asset-backed finance products, as well as over
$4 billion
of closed
reinsurance transactions at Fortitude; and
•
Positive market activity of
$1.9 billion
, primarily from an increase in the fair value of our cross-platform credit,
opportunistic credit, and direct lending products.
Offsetting these increases were:
•
Outflows of
$6.3 billion
for the period, which primarily reflected outflows from our liquid credit products and
realizations across the platform, notably in our asset-backed finance products.
110
Total AUM was
$208.5 billion
at
September 30, 2025
, an increase of
8%
compared to
$192.4 billion
at
December 31,
2024
. The net increase was due to:
•
Inflows of
$22.9 billion
, which were driven by capital raised in our liquid credit products, including the closing of
four U.S. CLOs and two Euro CLOs, as well as our asset-backed finance, cross-platform credit, aviation, and
opportunistic credit products, and nearly
$9 billion
of closed reinsurance transactions at Fortitude;
•
Positive market activity of
$5.0 billion
, which primarily reflected an increase in the fair value of our direct lending
and cross-platform credit products, as well as an increase in the fair value of assets covered by the Fortitude strategic
advisory services agreement; and
•
Positive foreign exchange activity of
$1.2 billion
reflecting the translation of our EUR-denominated products to
USD.
Offsetting these increases were:
•
Outflows of
$13.1 billion
for the period, which were primarily in our liquid credit products, with additional activity
reflecting realizations across the platform, notably in our asset-backed finance and aviation products.
Fund Performance Metrics
Fund performance information for certain of our Global Credit funds is included throughout this discussion and analysis
to facilitate an understanding of our results of operations for the periods presented. The fund return information reflected in this
discussion and analysis is not indicative of the performance of The Carlyle Group Inc. and is also not necessarily indicative of
the future performance of any particular fund. An investment in The Carlyle Group Inc. is not an investment in any of our
funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.
The following table reflects the performance of our significant carry funds in our Global Credit business. Please see “—
Our Global Investment Offerings” for a legend of the fund acronyms listed below.
|
(Dollars in millions)
|
|
TOTAL INVESTMENTS
|
||||||||
|
|
|
As of September 30, 2025
|
||||||||
|
Fund (Fee Initiation Date/Step-down Date)(11)
|
Committed
Capital(12)
|
Cumulative
Invested
Capital (1)
|
Percent
Invested
|
Realized
Value (2)
|
Remaining
Fair Value
(3)
|
MOIC (4)
|
Gross IRR
(5) (8)
|
Net IRR
(6) (8)
|
Net Accrued
Carry/(Giveback)
(7)
|
|
|
Global Credit Carry Funds
|
||||||||||
|
CCOF III - Levered (Feb 2023 / Oct 2028)
|
$
4,678
|
$
3,558
|
76%
|
$
589
|
$
3,540
|
1.2x
|
NM
|
NM
|
$
19
|
|
|
CCOF II (Nov 2020 / Mar 2026)
|
$
4,430
|
$
5,846
|
132%
|
$
3,585
|
$
4,466
|
1.4x
|
14%
|
10%
|
$
121
|
|
|
CCOF I (Nov 2017 / Sep 2022)
|
$
2,373
|
$
3,514
|
148%
|
$
3,818
|
$
1,253
|
1.4x
|
16%
|
12%
|
$
31
|
|
|
CSP IV (Apr 2016 / Dec 2020)
|
$
2,500
|
$
2,500
|
100%
|
$
1,667
|
$
1,852
|
1.4x
|
10%
|
5%
|
$
—
|
|
|
CICF II (Mar 2024 / Dec 2029)
|
$
1,379
|
$
265
|
19%
|
$
35
|
$
259
|
1.1x
|
NM
|
NM
|
$
1
|
|
|
SASOF III (Nov 2014 / n/a)
|
$
833
|
$
991
|
119%
|
$
1,267
|
$
91
|
1.4x
|
19%
|
12%
|
$
7
|
|
|
All Other Active Funds & Vehicles(9)
|
$
12,464
|
n/a
|
$
4,302
|
$
11,035
|
1.2x
|
11%
|
9%
|
$
88
|
||
|
Fully Realized Funds & Vehicles(10)(13)
|
$
9,698
|
n/a
|
$
12,155
|
$
35
|
1.3x
|
9%
|
4%
|
$
—
|
||
|
TOTAL GLOBAL CREDIT CARRY FUNDS
|
$
38,835
|
n/a
|
$
27,419
|
$
22,530
|
1.3x
|
11%
|
7%
|
$
266
|
||
(1)
Represents the original cost of investments since the inception of the fund. For CSP IV, reflects amounts net of
investment level recallable proceeds which is adjusted to reflect recyclability of invested capital for the purpose of
calculating the fund MOIC.
(2)
Represents all realized proceeds since inception of the fund.
(3)
Represents remaining fair value, before management fees, expenses and carried interest, and may include remaining
escrow values for realized investments.
(4)
Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried
interest, divided by cumulative invested capital.
(5)
Gross Internal Rate of Return (“Gross IRR”) represents an annualized time-weighted return on Limited Partner invested
capital, based on contributions, distributions and unrealized fair value as of the reporting date, before the impact of
management fees, partnership expenses and carried interest. For fund vintages 2017 and after, Gross IRR includes the
impact of interest expense related to the funding of investments on fund lines of credit. Gross IRR is calculated based
on the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment
cash flows for the fund. Subtotal Gross IRR aggregations for multiple funds are calculated based on actual cash flow
111
dates for each fund and represent a theoretical time-weighted return for a Limited Partner who invested sequentially in
each fund.
(6)
Net Internal Rate of Return (“Net IRR”) represents an annualized time-weighted return on Limited Partner invested
capital, based on contributions, distributions and unrealized fair value as of the reporting date, after the impact of all
management fees, partnership expenses and carried interest, including current accruals. Net IRR is calculated based on
the timing of Limited Partner cash flows, which may differ to varying degrees from the timing of actual investment cash
flows for the fund. Fund level IRRs are based on aggregate Limited Partner cash flows, and this blended return may
differ from that of individual Limited Partners. As a result, certain funds may generate accrued performance revenues
with a blended Net IRR that is below the preferred return hurdle for that fund. Subtotal Net IRR aggregations for
multiple funds are calculated based on actual cash flow dates for each fund and represent a theoretical time-weighted
return for a Limited Partner who invested sequentially in each fund.
(7)
Represents the net accrued performance revenue balance/(giveback obligation) as of the current quarter end.
(8)
For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time
since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is considered meaningful
but is negative as of reporting period end.
(9)
Aggregate includes the following funds, as well as all active co-investments, separately managed accounts (SMAs), and
stand-alone investments arranged by us: SASOF IV, SASOF V, CAPF VII, CICF, CAF, CALF, CCOF III - Unlevered,
and CCOF III PSV.
(10)
Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and
certain other stand-alone investments arranged by us: CSP I, CSP II, CSP III, CEMOF I, CEMOF II, CSC, CMP I,
CMP II, SASOF II, and CASCOF.
(11)
The fund step-down date represents the contractual step-down date under the respective fund agreements for funds on
which the fee basis step-down has not yet occurred. Funds without a listed Fee Initiation Date and Step-down Date have
not yet initiated fees.
(12)
All amounts shown represent total capital commitments as of September 30, 2025. Certain of our recent vintage funds
are currently in fundraising and total capital commitments are subject to change.
Committed capital for CCOF II
excludes $150 million in capital committed by a CCOF II investor to a side vehicle. The CCOF III platform, which
includes CCOF III - Levered, CCOF III - Unlevered, and CCOF III PSV, collectively has $5.7 billion of committed
capital.
(13)
Funds are included when all investments have been realized. There may be remaining fair value and net accrued carry
where there are outstanding escrow balances or undistributed proceeds.
112
Carlyle AlpInvest
The following table presents our results of operations for our Carlyle AlpInvest segment:
|
|
Three Months Ended
September 30,
|
Change
|
Nine Months Ended
September 30,
|
Change
|
|||||||||||
|
|
2025
|
2024
|
$
|
%
|
2025
|
2024
|
$
|
%
|
|||||||
|
|
(Dollars in millions)
|
||||||||||||||
|
Segment Revenues
|
|||||||||||||||
|
Fund level fee revenues
|
|||||||||||||||
|
Fund management fees
|
$
132.4
|
$
85.1
|
$
47.3
|
56
%
|
$
352.5
|
$
238.7
|
$
113.8
|
48
%
|
|||||||
|
Portfolio advisory and
transaction fees, net and other
|
0.2
|
0.1
|
0.1
|
100
%
|
0.2
|
0.2
|
—
|
—
%
|
|||||||
|
Fee related performance
revenues
|
18.9
|
7.3
|
11.6
|
159
%
|
39.7
|
10.4
|
29.3
|
282
%
|
|||||||
|
Total fund level fee revenues
|
151.5
|
92.5
|
59.0
|
64
%
|
392.4
|
249.3
|
143.1
|
57
%
|
|||||||
|
Realized performance revenues
|
15.5
|
39.2
|
(23.7)
|
(60)
%
|
50.2
|
82.5
|
(32.3)
|
(39)
%
|
|||||||
|
Realized principal investment
income
|
7.1
|
1.9
|
5.2
|
274
%
|
25.6
|
3.5
|
22.1
|
NM
|
|||||||
|
Interest income
|
2.1
|
2.3
|
(0.2)
|
(9)
%
|
6.3
|
5.8
|
0.5
|
9
%
|
|||||||
|
Total revenues
|
176.2
|
135.9
|
40.3
|
30
%
|
474.5
|
341.1
|
133.4
|
39
%
|
|||||||
|
Segment Expenses
|
|||||||||||||||
|
Compensation and benefits
|
|||||||||||||||
|
Cash-based compensation and
benefits
|
39.3
|
30.0
|
9.3
|
31
%
|
110.8
|
85.6
|
25.2
|
29
%
|
|||||||
|
Realized performance revenues
related compensation
|
13.7
|
36.9
|
(23.2)
|
(63)
%
|
41.2
|
73.2
|
(32.0)
|
(44)
%
|
|||||||
|
Total compensation and
benefits
|
53.0
|
66.9
|
(13.9)
|
(21)
%
|
152.0
|
158.8
|
(6.8)
|
(4)
%
|
|||||||
|
General, administrative, and other
indirect expenses
|
22.6
|
13.2
|
9.4
|
71
%
|
54.3
|
37.1
|
17.2
|
46
%
|
|||||||
|
Depreciation and amortization
expense
|
2.1
|
1.8
|
0.3
|
17
%
|
6.0
|
5.0
|
1.0
|
20
%
|
|||||||
|
Interest expense
|
3.3
|
2.9
|
0.4
|
14
%
|
9.5
|
8.7
|
0.8
|
9
%
|
|||||||
|
Total expenses
|
81.0
|
84.8
|
(3.8)
|
(4)
%
|
221.8
|
209.6
|
12.2
|
6
%
|
|||||||
|
(=) Distributable Earnings
|
$
95.2
|
$
51.1
|
$
44.1
|
86
%
|
$
252.7
|
$
131.5
|
$
121.2
|
92
%
|
|||||||
|
(-) Realized Net Performance
Revenues
|
1.8
|
2.3
|
(0.5)
|
(22)
%
|
9.0
|
9.3
|
(0.3)
|
(3)
%
|
|||||||
|
(-) Realized Principal Investment
Income
|
7.1
|
1.9
|
5.2
|
274
%
|
25.6
|
3.5
|
22.1
|
NM
|
|||||||
|
(+) Net Interest
|
1.2
|
0.6
|
0.6
|
100
%
|
3.2
|
2.9
|
0.3
|
10
%
|
|||||||
|
(=) Fee Related Earnings
|
$
87.5
|
$
47.5
|
$
40.0
|
84
%
|
$
221.3
|
$
121.6
|
$
99.7
|
82
%
|
|||||||
113
Distributable Earnings
Distributable Earnings
increased
$44.1 million
for the
three months ended September 30, 2025
, as compared to the
three
months ended September 30, 2024
, and
increased
$121.2 million
for the
nine months ended September 30, 2025
, as compared
to the
nine months ended September 30, 2024
. The following table provides the components of the changes in Distributable
Earnings for the
three and nine months ended September 30, 2025
:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||
|
2025 v. 2024
|
|||
|
(Dollars in millions)
|
|||
|
Distributable Earnings, September 30, 2024
|
$
51.1
|
$
131.5
|
|
|
Increases (decreases):
|
|||
|
Increase in fee related earnings
|
40.0
|
99.7
|
|
|
Decrease in realized net performance revenues
|
(0.5)
|
(0.3)
|
|
|
Increase in realized principal investment income
|
5.2
|
22.1
|
|
|
Increase in net interest
|
(0.6)
|
(0.3)
|
|
|
Total increase
|
44.1
|
121.2
|
|
|
Distributable Earnings, September 30, 2025
|
$
95.2
|
$
252.7
|
|
Realized Principal Investment Income
. Realized principal investment income
increased
$5.2 million
for the
three months
ended September 30, 2025
, as compared to the
three months ended September 30, 2024
. Realized principal investment income
increased
$22.1 million
for the
nine months ended September 30, 2025
, as compared to the
nine months ended September 30,
2024
,
primarily driven by our investment in the CAPM funds
.
Fee Related Earnings
Fee Related Earnings
increased
$40.0 million
for the
three months ended September 30, 2025
, as compared to the
three
months ended September 30, 2024
, and
increased
$99.7 million
for the
nine months ended September 30, 2025
, as compared to
the
nine months ended September 30, 2024
. The following table provides the components of the changes in Fee Related
Earnings for the
three and nine months ended September 30, 2025
:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||
|
2025 v. 2024
|
|||
|
(Dollars in millions)
|
|||
|
Fee Related Earnings, September 30, 2024
|
$
47.5
|
$
121.6
|
|
|
Increases (decreases):
|
|||
|
Increase in fee revenues
|
59.0
|
143.1
|
|
|
Increase in cash-based compensation and benefits
|
(9.3)
|
(25.2)
|
|
|
Increase in general, administrative and other indirect expenses
|
(9.4)
|
(17.2)
|
|
|
All other changes
|
(0.3)
|
(1.0)
|
|
|
Total increase
|
40.0
|
99.7
|
|
|
Fee Related Earnings, September 30, 2025
|
$
87.5
|
$
221.3
|
|
Fee Revenues
. Fee revenues
increased
$59.0 million
for the
three months ended September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
increased
$143.1 million
for the
nine months ended September 30, 2025
, as
compared to the
nine months ended September 30, 2024
, driven by
an increase
in Fund management fees of
$47.3 million
and
$113.8 million
, respectively, and
an increase
in Fee related performance revenues of
$11.6 million
and
$29.3 million
,
respectively.
The increase in Fund management fees was primarily driven by the
impact
of fundraising in our most recent
vintage of secondaries & portfolio finance funds. Fund management fees included catch-up management fees of
$31.1 million
and
$55.6 million
for the three and nine months ended September 30, 2025, respectively, an increase of
$24.2 million
and
$46.0 million
, respectively, relative to the comparable 2024 periods.
Fundraising for our most recent vintage of secondaries &
portfolio finance funds concluded in the third quarter and therefore these catch-up management fees will not recur next quarter.
114
Our
CAPM funds
also contributed to the increase in Fund management fees, and drove the increase in Fee related performance
revenues due to its growing capital base and performance.
Cash-based compensation and benefits expense
. Cash-based compensation and benefits expense
increased
$9.3 million
for the
three months ended September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
increased
$25.2 million
for the
nine months ended September 30, 2025
, as compared to the
nine months ended September 30, 2024
,
primarily due to an increase in headcount and an increase in compensation associated with fee related performance revenues.
General, administrative and other indirect expenses
. General, administrative and other indirect expenses
increased
$9.4
million
for the
three months ended September 30, 2025
, as compared to the
three months ended September 30, 2024
, and
increased
$17.2 million
for the
nine months ended September 30, 2025
as compared to the
nine months ended September 30,
2024
, primarily due to higher external fundraising costs.
Fee-earning AUM
Fee-earning AUM is presented below for each period together with the components of change during each respective
period.
|
|
As of September 30,
|
||
|
|
2025
|
2024
|
|
|
Carlyle AlpInvest
|
(Dollars in millions)
|
||
|
Components of Fee-earning AUM
(1)
|
|||
|
Fee-earning AUM based on capital commitments
|
$
27,966
|
$
20,485
|
|
|
Fee-earning AUM based on invested capital
(2)
|
8,968
|
9,205
|
|
|
Fee-earning AUM based on net asset value
|
17,051
|
12,383
|
|
|
Fee-earning AUM based on lower of cost or fair market value and other
|
9,658
|
8,850
|
|
|
Total Fee-earning AUM
|
$
63,643
|
$
50,923
|
|
|
Annualized Management Fee Rate
(3)
|
0.69
%
|
0.65
%
|
|
(1)
For additional information concerning the components of Fee-earning AUM, see “—Key Financial Measures—Operating Metrics.”
(2)
Includes amounts committed to or reserved for certain AlpInvest funds.
(3)
Represents annualized fund management fees divided by the average of the beginning of year and each quarter end’s Fee-earning AUM
in the reporting period. Catch-up management fees were excluded in the calculation of the annualized fund management fees.
The table below provides the period to period rollforward of Fee-earning AUM.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||
|
|
2025
|
2024
|
2025
|
2024
|
|||
|
Carlyle AlpInvest
|
(Dollars in millions)
|
||||||
|
Fee-earning AUM Rollforward
|
|||||||
|
Balance, Beginning of Period
|
$
59,587
|
$
48,246
|
$
52,139
|
$
45,529
|
|||
|
Inflows
(1)
|
4,696
|
2,257
|
11,653
|
6,851
|
|||
|
Outflows (including realizations)
(2)
|
(1,102)
|
(616)
|
(2,969)
|
(2,435)
|
|||
|
Market Activity & Other
(3)
|
473
|
358
|
668
|
832
|
|||
|
Foreign Exchange
(4)
|
(11)
|
678
|
2,152
|
146
|
|||
|
Balance, End of Period
|
$
63,643
|
$
50,923
|
$
63,643
|
$
50,923
|
|||
(1)
Inflows represents limited partner capital raised by our carry funds or separately managed accounts for which management fees based
on commitments were activated during the period and the fee-earning commitments invested in vehicles for which management fees are
based on invested capital. Inflows exclude fundraising amounts during the period for which fees have not yet been activated, which are
referenced as Pending Fee-earning AUM.
(2)
Outflows represents the impact of realizations from vehicles with management fees based on remaining invested capital at cost or fair
value, changes in basis for funds where the investment period, weighted-average investment period, or commitment fee period has
expired during the period, and reductions for funds that are no longer calling for fees. Distributions for funds earning management fees
based on commitments during the period do not affect Fee-earning AUM.
115
(3)
Market Activity & Other represents realized and unrealized gains (losses) on portfolio investments in our carry funds based on the
lower of cost or fair value and net asset value.
(4)
Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated
funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the
period end.
Fee-earning AUM was
$63.6 billion
at
September 30, 2025
, an increase of
7%
from
$59.6 billion
at
June 30, 2025
. The
net increase was due to:
•
Inflows of
$4.7 billion
, which were driven by fee-paying capital raised and investment activity across all strategies,
notably in our secondaries & portfolio finance, CAPM, and CAPS funds.
Offsetting these increases were:
•
Outflows of
$1.1 billion
, which were driven by realizations in funds, across all strategies, that charge fees on
invested capital.
Fee-earning AUM was
$63.6 billion
at
September 30, 2025
, an increase of
22%
from
$52.1 billion
at
December 31, 2024
.
The net increase was due to:
•
Inflows of
$11.7 billion
, which were driven by fee-paying capital raised and investment activity across all strategies,
notably in our secondaries & portfolio finance funds; and
•
Positive foreign exchange activity of
$2.2 billion
, primarily from the translation of our EUR-denominated funds to
USD.
Offsetting these increases were:
•
Outflows of
$3.0 billion
, which were driven by realizations across all strategies in funds that charge fees on invested
capital.
Fee-earning AUM was
$63.6 billion
at
September 30, 2025
, an increase of
25%
compared to
$50.9 billion
at
September 30, 2024
. The net increase was due to:
•
Inflows of
$14.7 billion
, which were driven by fee-paying capital raised and investment activity in our secondaries
& portfolio finance and CAPM funds;
•
Market appreciation of
$1.5 billion
, which was driven by certain funds in our secondaries & portfolio finance and
primary strategies, as well as our CAPM funds, in which fees are based on fair value; and
•
Positive foreign exchange activity of
$0.9 billion
, primarily from the translation of our EUR-denominated funds to
USD.
Offsetting these increases were:
•
Outflows of
$4.4 billion
, which reflected realizations across all strategies and step-downs in fee bases in our primary
funds.
116
Total AUM
The table below provides the period to period rollforward of Total AUM.
|
|
Three Months Ended
September 30, 2025
|
Nine Months Ended
September 30, 2025
|
|
|
|
(Dollars in millions)
|
||
|
Carlyle AlpInvest
|
|||
|
Total AUM Rollforward
|
|||
|
Balance, Beginning of Period
|
$
96,518
|
$
85,113
|
|
|
Inflows
(1)
|
6,318
|
15,392
|
|
|
Outflows (including realizations)
(2)
|
(2,715)
|
(6,346)
|
|
|
Market Activity & Other
(3)
|
2,062
|
4,279
|
|
|
Foreign Exchange
(4)
|
(48)
|
3,697
|
|
|
Balance, End of Period
|
$
102,135
|
$
102,135
|
|
(1)
Inflows reflects the impact of gross fundraising during the period. For funds or vehicles denominated in foreign currencies, this reflects
translation at the average quarterly rate.
(2)
Outflows includes distributions in our carry funds, related co-investment vehicles and separately managed accounts, as well as the
expiration of available capital.
(3)
Market Activity & Other generally represents realized and unrealized gains (losses) on portfolio investments in our carry funds, related
co-investment vehicles and separately managed accounts, the net impact of fees, expenses and non-investment income, as well as other
changes in AUM.
(4)
Foreign Exchange represents the impact of foreign exchange rate fluctuations on the translation of our non-U.S. dollar denominated
funds. Activity during the period is translated at the average rate for the period. Ending balances are translated at the spot rate as of the
period end.
Total AUM was
$102.1 billion
at
September 30, 2025
, an increase of
6%
compared to
$96.5 billion
at
June 30, 2025
. The
net increase was due to:
•
Inflows of
$6.3 billion
, which reflected fundraising across the segment, notably in our secondaries & portfolio
finance, CAPS, and CAPM funds; and
•
Market appreciation of
$2.1 billion
, which was driven by our secondaries & portfolio finance and primary funds.
Offsetting these increases were:
•
Outflows of
$2.7 billion
, predominantly from realizations in our co-investment and secondaries & portfolio finance
strategies.
Total AUM was
$102.1 billion
at
September 30, 2025
, an increase of
20%
compared to
$85.1 billion
at
December 31,
2024
. The net increase was due to:
•
Inflows of
$15.4 billion
, which reflected fundraising across the platform, notably in our secondaries & portfolio
finance and co-investment strategies, as well as the CAPM and CAPS funds;
•
Market appreciation of
$4.3 billion
, which was driven by our secondaries & portfolio finance and co-investment
strategies; and
•
Positive foreign exchange activity of
$3.7 billion
, primarily from the translation of our EUR-denominated funds to
USD.
Offsetting these increases were:
•
Outflows of
$6.3 billion
which reflected realizations across all strategies.
Fund Performance Metrics
The fund return information reflected in this discussion and analysis is not indicative of the performance of The Carlyle
Group Inc. and is also not necessarily indicative of the future performance of any particular fund. An investment in The Carlyle
117
Group Inc. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and
future funds will achieve similar returns.
The following table reflects the performance of our significant funds in our Carlyle AlpInvest business. We also present
fund performance information for portfolios of investments held by separately managed accounts, generally aggregated either
as invested alongside the relevant commingled fund or over a specified time period.
|
(Amounts in millions)
|
|
|
TOTAL INVESTMENTS
|
|||||||||
|
|
|
|
As of September 30, 2025
|
|||||||||
|
Carlyle AlpInvest (1)(8)
|
Vintage
Year
|
Fund Size
|
Cumulative
Invested
Capital
(2)(3)
|
Realized
Value (3)
|
Remaining
Fair Value
(3)
|
Total Fair
Value(3)(4)
|
MOIC
(5)
|
Gross
IRR
(6)(10)
|
Net
IRR
(7)(10)
|
Net Accrued
Carry/
(Giveback)
(12)
|
||
|
|
|
|
(Reported in Local Currency, in Millions)
|
|||||||||
|
Secondaries &
Portfolio
Finance
|
ASF VIII
|
2024
|
$
13,422
|
$
5,576
|
$
149
|
$
7,138
|
$
7,287
|
1.3x
|
NM
|
NM
|
$
56
|
|
|
ASF VII
|
2020
|
$
6,769
|
$
4,926
|
$
1,993
|
$
5,839
|
$
7,832
|
1.6x
|
18%
|
14%
|
$
118
|
||
|
ASF VII - SMAs
|
2020
|
€
2,027
|
€
1,693
|
€
556
|
€
1,982
|
€
2,537
|
1.5x
|
16%
|
14%
|
$
38
|
||
|
ASF VI
|
2017
|
$
3,333
|
$
2,810
|
$
2,791
|
$
1,850
|
$
4,641
|
1.7x
|
15%
|
11%
|
$
59
|
||
|
ASF VI - SMAs
|
2017
|
€
2,817
|
€
2,613
|
€
2,396
|
€
1,796
|
€
4,192
|
1.6x
|
13%
|
12%
|
$
49
|
||
|
ASF V
|
2012
|
$
756
|
$
673
|
$
1,083
|
$
120
|
$
1,203
|
1.8x
|
18%
|
14%
|
$
5
|
||
|
ASF V - SMAs
|
2012
|
€
3,916
|
€
3,913
|
€
6,797
|
€
457
|
€
7,254
|
1.9x
|
21%
|
19%
|
$
10
|
||
|
SMAs 2009-2011
|
2010
|
€
1,859
|
€
1,929
|
€
3,328
|
€
37
|
€
3,366
|
1.7x
|
19%
|
18%
|
$
—
|
||
|
ASPF II
|
2023
|
$
2,227
|
$
707
|
$
255
|
$
609
|
$
864
|
1.2x
|
NM
|
NM
|
$
7
|
||
|
All Other Active Funds & Vehicles (9)
|
Various
|
$
2,015
|
$
861
|
$
1,911
|
$
2,772
|
1.4x
|
21%
|
18%
|
$
34
|
|||
|
Fully Realized Funds & Vehicles
|
Various
|
€
4,079
|
€
6,714
|
€
11
|
€
6,725
|
1.6x
|
19%
|
18%
|
$
—
|
|||
|
Co-Investments
|
ACF IX
|
2023
|
$
4,120
|
$
1,684
|
$
15
|
$
1,926
|
$
1,941
|
1.2x
|
NM
|
NM
|
$
3
|
|
|
ACF VIII
|
2021
|
$
3,614
|
$
3,458
|
$
417
|
$
4,481
|
$
4,899
|
1.4x
|
12%
|
10%
|
$
48
|
||
|
ACF VIII - SMAs
|
2021
|
$
1,079
|
$
1,000
|
$
115
|
$
1,290
|
$
1,405
|
1.4x
|
13%
|
11%
|
$
12
|
||
|
ACF VII
|
2017
|
$
1,688
|
$
1,668
|
$
1,425
|
$
1,929
|
$
3,354
|
2.0x
|
15%
|
13%
|
$
60
|
||
|
ACF VII - SMAs
|
2017
|
€
1,452
|
€
1,365
|
€
960
|
€
1,609
|
€
2,569
|
1.9x
|
14%
|
12%
|
$
43
|
||
|
SMAs 2014-2016
|
2014
|
€
1,274
|
€
1,064
|
€
2,280
|
€
436
|
€
2,716
|
2.6x
|
24%
|
22%
|
$
8
|
||
|
SMAs 2012-2013
|
2012
|
€
1,124
|
€
1,011
|
€
2,767
|
€
123
|
€
2,890
|
2.9x
|
28%
|
26%
|
$
1
|
||
|
SMAs 2009-2010
|
2010
|
€
1,475
|
€
1,317
|
€
3,494
|
€
392
|
€
3,886
|
2.9x
|
23%
|
21%
|
$
—
|
||
|
Strategic SMAs
|
Various
|
$
4,523
|
$
2,061
|
$
5,699
|
$
7,760
|
1.7x
|
16%
|
15%
|
$
81
|
|||
|
All Other Active Funds & Vehicles (9)
|
Various
|
€
283
|
€
166
|
€
260
|
€
425
|
1.5x
|
33%
|
31%
|
$
2
|
|||
|
Fully Realized Funds & Vehicles
|
Various
|
€
5,781
|
€
9,895
|
€
7
|
€
9,902
|
1.7x
|
15%
|
13%
|
$
—
|
|||
|
Primary
Investments
|
SMAs 2024-2026
|
2024
|
€
3,230
|
€
115
|
€
4
|
€
112
|
€
116
|
1.0x
|
NM
|
NM
|
$
—
|
|
|
SMAs 2021-2023
|
2021
|
€
4,535
|
€
1,606
|
€
105
|
€
1,837
|
€
1,942
|
1.2x
|
NM
|
NM
|
$
1
|
||
|
SMAs 2018-2020
|
2018
|
$
3,116
|
$
2,596
|
$
732
|
$
3,156
|
$
3,888
|
1.5x
|
15%
|
14%
|
$
4
|
||
|
SMAs 2015-2017
|
2015
|
€
2,501
|
€
2,447
|
€
2,704
|
€
2,186
|
€
4,891
|
2.0x
|
19%
|
19%
|
$
9
|
||
|
SMAs 2012-2014
|
2012
|
€
5,080
|
€
5,684
|
€
9,415
|
€
3,019
|
€
12,433
|
2.2x
|
17%
|
17%
|
$
11
|
||
|
SMAs 2009-2011
|
2009
|
€
4,877
|
€
5,520
|
€
10,323
|
€
1,736
|
€
12,060
|
2.2x
|
17%
|
17%
|
$
1
|
||
|
SMAs 2006-2008
|
2005
|
€
11,500
|
€
12,821
|
€
21,309
|
€
1,212
|
€
22,522
|
1.8x
|
10%
|
10%
|
$
—
|
||
|
SMAs 2003-2005
|
2003
|
€
4,628
|
€
4,877
|
€
7,762
|
€
135
|
€
7,897
|
1.6x
|
10%
|
9%
|
$
—
|
||
|
All Other Active Funds & Vehicles (9)
|
Various
|
€
1,741
|
€
1,748
|
€
227
|
€
1,975
|
1.1x
|
3%
|
2%
|
$
—
|
|||
|
Fully Realized Funds & Vehicles
|
Various
|
€
4,740
|
€
7,728
|
€
20
|
€
7,748
|
1.6x
|
12%
|
11%
|
$
—
|
|||
|
TOTAL CARLYLE ALPINVEST (USD)(11)
|
$
107,582
|
$
129,991
|
$
56,634
|
$
186,625
|
1.7x
|
14%
|
13%
|
$
660
|
||||
(1)
Includes private equity and mezzanine primary fund investments, secondary fund investments and co-investments
originated by AlpInvest. Excluded from the performance information shown are: (a) investments that were not originated
by AlpInvest (i.e., AlpInvest did not make the original investment decision or recommendation); (b) Direct Investments,
which was spun off from AlpInvest in 2005; (c) Carlyle AlpInvest Private Markets (“CAPM”); (d) Carlyle AlpInvest
Private Markets Secondaries (“CAPS”); and (e) LP co-investment vehicles managed by AlpInvest. As of September 30,
2025, these excluded portfolios amounted to approximately $15.1 billion of AUM in the aggregate.
(2)
Represents the original cost of investments since inception of the fund.
(3)
To exclude the impact of FX, all foreign currency cash flows have been converted to the currency representing a majority
of the capital committed to the relevant fund at the reporting period spot rate.
(4)
Represents all realized proceeds combined with remaining fair value, before management fees, expenses and carried
interest.
(5)
Multiple of invested capital (“MOIC”) represents total fair value, before management fees, expenses and carried interest,
divided by cumulative invested capital.
118
(6)
Gross Internal Rate of Return (“Gross IRR”) represents the annualized IRR for the period indicated on Limited Partner
invested capital based on investment contributions, distributions and unrealized value of the underlying investments, before
management fees, expenses and carried interest at the AlpInvest level.
(7)
Net Internal Rate of Return (“Net IRR”) represents the annualized IRR for the period indicated on Limited Partner invested
capital based on investment contributions, distributions and unrealized value of the underlying investments, after
management fees, expenses and carried interest. Fund level IRRs are based on aggregate Limited Partner cash flows, and
this blended return may differ from that of individual Limited Partners. As a result, certain funds may generate accrued
performance revenues with a blended Net IRR that is below the preferred return hurdle for that fund.
(8)
“ASF” stands for AlpInvest Secondaries Fund, “ACF” stands for AlpInvest Co-Investment Fund, and “SMAs” are
Separately Managed Accounts. “ASF - SMAs” and “ACF - SMAs” reflect the aggregated portfolios of investments held by
SMAs within the relevant strategy, which invest alongside the relevant ASF or ACF (as applicable). Strategic SMAs reflect
the aggregated portfolios of co-investments made by SMAs sourced from the SMA investor’s own private equity fund
investment portfolio. Other SMAs reflect the aggregated portfolios of investments within the relevant strategy that began
making investments in the corresponding time periods. Co-Investments SMAs 2014-2016 does not include two SMAs that
started in 2016 but invested a substantial majority alongside ACF VII. These two SMAs have instead been grouped with
ACF VII - SMAs. An SMA may pursue multiple investment strategies and make commitments over multiple years.
(9)
Includes ASF VIII - SMAs, ACF IX - SMAs, AlpInvest Atom Fund, AlpInvest Atom Fund II, all mezzanine investment
portfolios, all ‘clean technology’ private equity investment portfolios, all strategic portfolio finance SMAs, all AlpInvest
senior portfolio lending SMAs, and any state-focused investment mandate portfolios.
(10)
For funds marked “NM,” IRR may be positive or negative, but is not considered meaningful because of the limited time
since initial investment and early stage of capital deployment. For funds marked “Neg,” IRR is considered meaningful but
is negative as of reporting period end.
(11)
For purposes of aggregation, funds that report in foreign currency have been converted to U.S. dollars at the reporting
period spot rate.
(12)
Represents the net accrued performance revenue balance/(giveback obligation) as of the current quarter end.
Total Net
Accrued Carry excludes net accrued carry which was retained as part of the sale of MRE on April 1, 2021. There was no
net accrued carry balance for MRE as of
September 30, 2025
.
Liquidity and Capital Resources
Historical Liquidity and Capital Resources
We have historically required limited capital resources to support the working capital and operating needs of our
business. Our management fees have largely covered our operating costs and all realized performance allocations, after
covering the related compensation, are available for distribution to stockholders. Approximately 95% – 97% of all capital
commitments to our funds are provided by our fund investors, with the remaining amount typically funded by Carlyle, our
senior Carlyle professionals, advisors, and other professionals. We may elect to invest additional amounts in funds focused on
new investment areas. We may also invest in or alongside our funds and may transfer those investments to newly developed
products.
Our Sources of Liquidity
We have multiple sources of liquidity to meet our capital needs, including cash on hand, annual cash flows, accumulated
earnings, cash we receive from our notes offerings, and funds from our senior revolving credit facility, which had
$1.0 billion
of available capacity as of
September 30, 2025
. Although we may consider other financings to invest in growing our business,
such as the
$800.0 million
senior note offering during the quarter ended September 30, 2025
,
we believe these sources will be
sufficient to fund our capital needs for at least the next twelve months. We believe we will meet longer-term expected future
cash requirements and obligations through a combination of existing cash and cash equivalent balances, cash flow from
operations, accumulated earnings, and amounts available for borrowing from our senior revolving credit facility or other
financings.
Cash and cash equivalents
.
Cash and cash equivalents
were approximately
$2.2 billion
at
September 30, 2025
. However,
a portion of this cash is allocated for specific business purposes, including, but not limited to: (i) performance allocations and
incentive fee related cash that has been received but not yet distributed as performance allocations and incentive fee related
compensation and amounts owed to non-controlling interests, (ii) proceeds received from realized investments that are allocable
to non-controlling interests, and (iii) regulatory capital.
119
Corporate Treasury Investments
.
These investments represent investments in U.S. Treasury and government agency
obligations, commercial paper, certificates of deposit, other investment grade securities and other investments with original
maturities of greater than three months when purchased.
After deducting cash amounts allocated to the specific requirements mentioned above, the remaining cash, cash
equivalents, and corporate treasury investments (if any), was approximately
$2.1 billion
as of
September 30, 2025
. This
remaining amount will be used towards our primary liquidity needs, as outlined in the next section. This amount does not take
into consideration ordinary course of business payables and reserves for specific business purposes.
Senior Revolving Credit Facility
. The capacity under the amended and restated revolving credit facility is
$1.0 billion
,
which was amended in May 2025 to extend the maturity date from
April 29, 2027
to
May 29, 2030
. The Company’s borrowing
capacity is subject to the ability of the financial institutions in the banking syndicate to fulfill their respective obligations under
the revolving credit facility. Principal amounts outstanding under the amended and restated revolving credit facility accrue
interest, at the option of the borrowers, either (a) at an alternate base rate plus an applicable margin not to exceed
0.50%
per
annum, or (b) at SOFR (or similar benchmark rate for non-U.S. dollar borrowings) plus a 0.10% adjustment and an applicable
margin not to exceed
1.50%
per annum (
5.23%
at
September 30, 2025
). As of
September 30, 2025
, there were
no
amounts
outstanding under the senior revolving credit facility.
The senior revolving credit facility is unsecured. We are required to maintain management fee-earning assets (as defined
in the amended and restated senior revolving credit facility) of at least
$156.9 billion
and a total leverage ratio of less than 4.0 to
1.0, in each case, tested on a quarterly basis. Non-compliance with any of the financial or non-financial covenants without cure
or waiver would constitute an event of default under the senior revolving credit facility. An event of default resulting from a
breach of certain financial or non-financial covenants may result, at the option of the lenders, in an acceleration of the principal
and interest outstanding, and a termination of the senior revolving credit facility. The senior revolving credit facility also
contains other customary events of default, including defaults based on events of bankruptcy and insolvency, nonpayment of
principal, interest or fees when due, breach of specified covenants, change in control, and material inaccuracy of representations
and warranties.
Global Credit Revolving Credit Facility
.
Certain subsidiaries of the Company are parties to a revolving line of credit,
primarily intended to support certain lending activities within the Global Credit segment. As currently amended, the Global
Credit Revolving Credit Facility provides for a revolving line of credit with a capacity of
$300 million
, which matures in
September 2027, and a second revolving line of credit with a capacity of
$200 million
, which the Company amended in August
2025 to extend the maturity date to
August 19, 2026
.
The Company’s borrowing capacity is subject to the ability of the financial institutions in the banking syndicate to fulfill
their respective obligations under the Global Credit Revolving Credit Facility. Principal amounts outstanding accrue interest at
applicable SOFR or Eurocurrency rates plus an applicable margin of
2.00%
or an alternate base rate plus an applicable margin
of
1.00%
. As of
September 30, 2025
, there was
no
borrowing outstanding under the Global Credit Revolving Credit Facility.
CLO Borrowings
. For certain of our CLOs, the Company finances a portion of its investment in the CLOs through the
proceeds received from term loans and other financing arrangements with financial institutions or other financing arrangements.
The Company’s CLO borrowings were
$337.0 million
at
September 30, 2025
. The CLO borrowings are secured by the
Company’s investments in the respective CLO, have a general unsecured interest in the Carlyle entity that manages the CLO
and generally do not have recourse to any other Carlyle entity. As of
September 30, 2025
,
$318.3 million
of these borrowings
are secured by investments attributable to The Carlyle Group Inc. See Note
6
,
Borrowings
, to the condensed consolidated
financial statements included in this Quarterly Report on Form 10-Q for more information on our CLO borrowings.
Senior Notes
. The Company and c
ertain indirect finance subsidiaries of the Company
have issued senior notes, on which
interest is payable semi-annually, as discussed below. The senior notes are unsecured and unsubordinated obligations of the
respective subsidiary and are fully and unconditionally guaranteed, jointly and severally, by the Company and each of the
Carlyle Holdings partnerships. The indentures governing each of the senior notes contain customary covenants that, among
other things, limit the issuers’ and the guarantors’ ability, subject to certain exceptions, to incur indebtedness secured by liens
on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets.
The notes also contain customary events of default. All or a portion of the notes may be redeemed at our option, in whole or in
part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the notes.
If a change of control repurchase event occurs, the notes are subject to repurchase at the repurchase price as set forth in the
notes.
120
3.500% Senior Notes
. In September 2019, Carlyle Finance Subsidiary L.L.C. issued $425.0 million of 3.500% senior
notes due September 19, 2029 at 99.841% of par.
5.050% Senior Notes
. In September 2025, the Company issued $800.0 million of 5.050% senior notes due September 19,
2035 at 99.767% of par.
5.625% Senior Notes
.
In March 2013, Carlyle Holdings II Finance L.L.C. issued $400.0 million of 5.625% senior notes
due March 30, 2043 at 99.583% of par. In March 2014, an additional $200.0 million of these notes were issued at 104.315% of
par and are treated as a single class with the already outstanding $400.0 million aggregate principal amount of these notes.
5.650% Senior Notes
.
In September 2018, Carlyle Finance L.L.C. issued $350.0 million of 5.650% senior notes due
September 15, 2048 at 99.914% of par.
Subordinated Notes
.
In May and June 2021, Carlyle Finance L.L.C. issued $500.0 million aggregate principal amount of
4.625% subordinated notes due May 15, 2061. The Subordinated Notes are unsecured and subordinated obligations of the issuer
and are fully and unconditionally guaranteed, jointly and severally, on a subordinated basis, by the Company, each of the
Carlyle Holdings partnerships, and CG Subsidiary Holdings L.L.C., an indirect subsidiary of the Company. The indentures
governing the Subordinated Notes contain customary covenants that, among other things, limit the issuers’ and the guarantors’
ability, subject to certain exceptions, to incur indebtedness ranking on a parity with the Subordinated Notes or indebtedness
ranking junior to the Subordinated Notes secured by liens on voting stock or profit participating equity interests of their
subsidiaries or merge, consolidate or sell, transfer or lease all or substantially all of their assets. The Subordinated Notes also
contain customary events of default. All or a portion of the notes may be redeemed at our option, in whole or in part, at any
time and from time to time on or after June 15, 2026, prior to their stated maturity, at a redemption price equal to their principal
amount plus any accrued and unpaid interest to, but excluding, the date of redemption. If interest due on the Subordinated Notes
is deemed to no longer be deductible in the U.S., a “Tax Redemption Event,” the Subordinated Notes may be redeemed, in
whole, but not in part, within 120 days of the occurrence of such event at a redemption price equal to their principal amount
plus accrued and unpaid interest to, but excluding, the date of redemption. In addition, the Subordinated Notes may be
redeemed, in whole, but not in part, at any time prior to May 15, 2026, within 90 days of the rating agencies determining that
the Subordinated Notes should no longer receive partial equity treatment pursuant to the rating agency’s criteria, a “rating
agency event,” at a redemption price equal to 102% of their principal amount plus any accrued and unpaid interest to, but
excluding, the date of redemption.
Obligations of CLOs
. Loans payable of the Consolidated Funds primarily comprise amounts due to holders of debt
securities issued by the CLOs. We are not liable for any loans payable of the CLOs. Loans payable of the CLOs are
collateralized by the assets held by the CLOs and the assets of one CLO may not be used to satisfy the liabilities of another.
This collateral consists of cash and cash equivalents, corporate loans, corporate bonds and other securities.
Realized Performance Allocation Revenues
. Another source of liquidity we may use to meet our capital needs is the
realized performance allocation revenues generated by our investment funds. Performance allocations are generally realized
when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return.
For certain funds, performance allocations are realized once all invested capital and expenses have been returned to the fund’s
investors and the fund’s cumulative returns are in excess of the preferred return. Incentive fees earned on our CLO vehicles
generally are paid upon the dissolution of such vehicles.
121
Our accrued performance allocations by segment as of
September 30, 2025
, gross and net of accrued giveback
obligations, are set forth below:
|
Accrued
Performance
Allocations
(1)
|
Accrued
Giveback
Obligation
|
Net Accrued
Performance
Revenues
|
|||
|
|
(Dollars in millions)
|
||||
|
Global Private Equity
|
$
4,352.3
|
$
(19.1)
|
$
4,333.2
|
||
|
Global Credit
|
721.1
|
(25.5)
|
695.6
|
||
|
Carlyle AlpInvest
|
1,882.9
|
—
|
1,882.9
|
||
|
Total
|
$
6,956.3
|
$
(44.6)
|
$
6,911.7
|
||
|
Plus: Accrued performance allocations from NGP Carry Funds
(2)
|
341.2
|
||||
|
Less: Accrued performance allocation-related compensation
|
(4,660.2)
|
||||
|
Plus: Receivable for giveback obligations from current and former employees
|
11.5
|
||||
|
Less: Deferred taxes on certain foreign accrued performance allocations
|
(19.9)
|
||||
|
Less/Plus: Net accrued performance allocations/giveback obligations attributable to non-controlling interests in
consolidated entities
|
(0.4)
|
||||
|
Plus: Net accrued performance allocations attributable to Consolidated Funds, eliminated in consolidation
|
22.6
|
||||
|
Net accrued performance revenues before timing differences
|
2,606.5
|
||||
|
Less/Plus: Timing differences between the period when accrued performance allocations/giveback obligations
are realized and the period they are collected/distributed
|
23.6
|
||||
|
Net accrued performance revenues attributable to The Carlyle Group Inc.
|
$
2,630.1
|
||||
(1)
Accrued incentive fees are excluded from net accrued performance revenues.
(2)
Accrued performance allocations from NGP funds are presented as principal equity method investments in the condensed
consolidated balance sheets.
The net accrued performance revenues attributable to The Carlyle Group Inc., excluding realized amounts, related to our
carry funds and our other vehicles as of
September 30, 2025
, as well as the carry fund appreciation (depreciation), is set forth
below by segment (Dollars in millions):
|
Carry Fund Appreciation/(Depreciation)
(1)
|
Net Accrued
Performance
Revenues
|
||||||||||||
|
Quarter-to-Date
|
Year-to-Date
|
Last Twelve
Months
|
|||||||||||
|
Q3 2024
|
Q3 2025
|
Q3 2024
|
Q3 2025
|
Q3 2024
|
Q3 2025
|
||||||||
|
Overall Carry Fund Appreciation/(Depreciation)
|
3
%
|
2
%
|
7
%
|
5
%
|
8
%
|
7
%
|
|||||||
|
Global Private Equity:
|
4
%
|
1
%
|
6
%
|
4
%
|
7
%
|
5
%
|
$
1,704.7
|
||||||
|
Corporate Private Equity
|
4
%
|
—
%
|
7
%
|
3
%
|
9
%
|
4
%
|
1,295.3
|
||||||
|
Real Estate
|
2
%
|
1
%
|
4
%
|
3
%
|
2
%
|
4
%
|
95.7
|
||||||
|
Infrastructure & Natural Resources
|
2
%
|
5
%
|
7
%
|
12
%
|
6
%
|
12
%
|
313.7
|
||||||
|
Global Credit Carry Funds
|
3
%
|
4
%
|
9
%
|
12
%
|
14
%
|
16
%
|
265.9
|
||||||
|
Carlyle AlpInvest Carry Funds
|
2
%
|
2
%
|
6
%
|
5
%
|
8
%
|
8
%
|
659.5
|
||||||
|
Net Accrued Performance Revenues
|
$
2,630.1
|
||||||||||||
(1)
Appreciation/(Depreciation) represents unrealized gain/(loss) for the period on a total return basis before fees and expenses. The
percentage of return is calculated as: ending remaining investment fair market value plus net investment outflow (sales proceeds
minus net purchases) minus beginning remaining investment fair market value divided by beginning remaining investment fair
market value. Amounts are fund only, and do not include coinvestments.
Realized Principal Investment Income
. Another source of liquidity we may use to meet our capital needs is the realized
principal investment income generated by our equity method investments and other principal investments. Principal investment
income is realized when we redeem all or a portion of our investment or when we receive or are due cash income, such as
dividends or distributions. Certain of the investments attributable to The Carlyle Group Inc. (excluding certain general partner
interests, certain strategic investments, and investments in certain CLOs) may be sold at our discretion as a source of liquidity.
122
Investments as of
September 30, 2025
consist of the following:
|
Investments in
Carlyle Funds
|
Investments
in NGP
(1)
|
Total
|
|||
|
(Dollars in millions)
|
|||||
|
Investments, excluding performance allocations
|
$
2,961.9
|
$
597.2
|
$
3,559.1
|
||
|
Less: Amounts attributable to non-controlling interests in consolidated entities
|
(380.8)
|
—
|
(380.8)
|
||
|
Plus: Investments in Consolidated Funds, eliminated in consolidation
|
898.1
|
—
|
898.1
|
||
|
Less: Strategic equity method investments in NGP Management
|
—
|
(256.0)
|
(256.0)
|
||
|
Less: Investment in NGP general partners - accrued performance allocations
|
—
|
(341.2)
|
(341.2)
|
||
|
Total investments attributable to The Carlyle Group Inc.
|
$
3,479.2
|
$
—
|
$
3,479.2
|
||
(1)
Strategic equity method investment in NGP Management and investments in NGP general partners - accrued performance allocations.
See Note
4
,
Investments
, to our condensed consolidated financial statements.
Our investments as of
September 30, 2025
can be further attributed as follows (Dollars in millions):
|
Investments in Carlyle Funds, excluding CLOs:
|
|
|
Global Private Equity funds
(1)
|
$
1,226.5
|
|
Global Credit funds
(2)
|
1,280.4
|
|
Carlyle AlpInvest funds
|
428.2
|
|
Total investments in Carlyle Funds, excluding CLOs
|
2,935.1
|
|
Investments in CLOs
|
405.9
|
|
Other investments
|
138.2
|
|
Total investments attributable to The Carlyle Group Inc.
|
3,479.2
|
|
CLO loans and other borrowings collateralized by investments attributable to The Carlyle Group Inc.
(3)
|
(318.3)
|
|
Total investments attributable to The Carlyle Group Inc., net of CLO loans and other borrowings
|
$
3,160.9
|
(1)
Excludes our strategic equity method investment in NGP Management and investments in NGP general partners - accrued
performance allocations.
(2)
Includes the Company’s indirect investment in Fortitude through Carlyle FRL, a Carlyle-affiliated investment fund, as discussed in
Note
4
,
Investments
, to the condensed consolidated financial statements. This investment had a carrying value of
$739.5 million
as
of
September 30, 2025
.
(3)
Of the
$337.0 million
in total CLO borrowings as of
September 30, 2025
and as disclosed in Note
6
,
Borrowings
, to the condensed
consolidated financial statements,
$318.3 million
are collateralized by investments attributable to The Carlyle Group Inc. The
remaining
$18.7 million
in total CLO borrowings are collateralized by investments attributable to non-controlling interests.
Our Liquidity Needs
We generally use our working capital and cash flows to invest in growth initiatives, service our debt, fund the working
capital needs of our business and investment funds and return capital to our common stockholders in the form of dividends or
stock repurchases.
In the future, we expect that our primary liquidity needs will be to:
•
provide capital to facilitate the growth of our existing business lines;
•
provide capital to facilitate our expansion into new, complementary business lines, including acquisitions;
•
pay operating expenses, including compensation and compliance costs and other obligations as they arise;
•
fund costs of litigation and contingencies, including related legal costs;
•
fund the capital investments in our funds;
•
fund capital expenditures;
•
repay borrowings and related interest costs and expenses;
•
pay earn-outs and contingent cash consideration associated with our acquisitions and strategic investments;
123
•
pay income taxes, including corporate income taxes;
•
pay dividends to our common stockholders in accordance with our dividend policy;
•
repurchase our common stock and pay any associated taxes; and
•
settle tax withholding obligations in connection with net share settlements of equity-based awards.
Common Stockholder Dividends
. Under our dividend policy for our common stock, our intention is to pay dividends to
holders of our common stock in an amount of $0.35 per common share on a quarterly basis ($1.40 annually). For U.S. federal
income tax purposes, any dividends we pay generally will be treated as qualified dividend income (generally taxable to U.S.
individual stockholders at capital gain rates) paid by a domestic corporation to the extent paid out of our current or accumulated
earnings and profits, as determined for U.S. federal income tax purposes, with any excess dividends treated as return of capital
to the extent of the stockholder’s basis. The declaration and payment of dividends to holders of our common stock will be at the
sole discretion of our Board of Directors and in compliance with applicable law, and our dividend policy may be changed at any
time.
With respect to dividend year
2025
, the Board of Directors has declared a dividend to common stockholders totaling
$378.9 million
, or
$1.05
per share, consisting of the following:
|
Common Stock Dividends - Dividend Year 2025
|
|||||
|
Quarter
|
Dividend per
Common Share
|
Dividend to
Common
Stockholders
|
Record Date
|
Payment Date
|
|
|
(Dollars in millions, except per share data)
|
|||||
|
Q1 2025
|
$
0.35
|
$
126.3
|
May 19, 2025
|
May 27, 2025
|
|
|
Q2 2025
|
0.35
|
126.5
|
August 18, 2025
|
August 28, 2025
|
|
|
Q3 2025
|
0.35
|
126.1
|
November 10, 2025
|
November 19, 2025
|
|
|
Total
|
$
1.05
|
$
378.9
|
|||
With respect to dividend year
2024
, the Board of Directors declared cumulative dividends to common stockholders
totaling
$502.7 million
, consisting of the following:
|
Common Stock Dividends - Dividend Year 2024
|
|||||
|
Quarter
|
Dividend per
Common Share
|
Dividend to
Common
Stockholders
|
Record Date
|
Payment Date
|
|
|
(Dollars in millions, except per share data)
|
|||||
|
Q1 2024
|
$
0.35
|
$
125.6
|
May 14, 2024
|
May 21, 2024
|
|
|
Q2 2024
|
0.35
|
125.5
|
August 16, 2024
|
August 26, 2024
|
|
|
Q3 2024
|
0.35
|
125.2
|
November 18, 2024
|
November 25, 2024
|
|
|
Q4 2024
|
0.35
|
126.4
|
February 21, 2025
|
February 28, 2025
|
|
|
Total
|
$
1.40
|
$
502.7
|
|||
Dividends to common stockholders paid during the
nine months ended September 30, 2025
totaled
$379.2 million
,
including the amount paid in February 2025 of
$0.35
per common share in respect of the fourth quarter of 2024. Dividends to
common stockholders paid during the
nine months ended September 30, 2024
totaled
$377.8 million
, including the amount paid
in March 2024 of
$0.35
per common share in respect of the fourth quarter of 2023.
Fund Commitments
.
Generally, 3% – 5% of all capital commitments to our investment funds are made by Carlyle, our
senior Carlyle professionals, advisors, and other professionals. Carlyle will generally commit up to 1% of capital commitments
related to our carry funds, although we may elect to invest additional amounts in funds focused on new investment areas. We
may, from time to time, exercise our right to purchase additional interests in our investment funds that become available in the
ordinary course of their operations. We expect our senior Carlyle professionals and employees to continue to make significant
capital contributions to our funds based on their existing commitments, and to make capital commitments to future funds
consistent with the level of their historical commitments. We also intend to make investments in our open-end funds and our
124
CLO vehicles. Our investments in our European CLO vehicles will comply with the risk retention rules as discussed in “Risk
Retention Rules” later in this section.
A substantial majority of the remaining commitments to our investment funds are expected to be funded by senior Carlyle
professionals, operating executives, and other professionals through our internal co-investment program. Of the
$4.0 billion
of
unfunded commitments as of
September 30, 2025
, approximately
$3.4 billion
is subscribed individually by senior Carlyle
professionals, operating executives, and other professionals, with the balance funded directly by the Company. Approximately
78%
of the
$4.0 billion
of unfunded commitments relate to investment funds in our Global Private Equity segment.
Under the Carlyle Global Capital Markets platform, certain of our subsidiaries may act as an underwriter, syndicator or
placement agent for security offerings and loan originations. We earn fees in connection with these activities and bear the risk
of the sale of such securities and placement of such loans, which may be longer dated. As of
September 30, 2025
, there were
no
material commitments related to the origination and syndication of loans and securities under the Carlyle Global Capital
Markets platform.
Repurchase Program
. During the
nine months ended September 30, 2025
, we paid an aggregate of
$225.0 million
to
repurchase and retire approximately
4.2 million
shares of common stock. In addition, during the
nine months ended September
30, 2025
, we paid an aggregate of
$257.8 million
and retired
4.6 million
shares of common stock to settle tax withholding
obligations in connection with net share settlements of equity-based awards, for a total of
$482.8 million
for approximately
8.9
million
shares repurchased or withheld this year. As of
September 30, 2025
,
$0.4 billion
of repurchase capacity remained under
the share repurchase program, which reflects the cost of common shares repurchased as well as shares settled for tax
withholding payments made by the Company related to the net share settlement of equity-based awards. For further information
on our repurchase program, see Note
13
,
Equity
, to the condensed consolidated financial statements included in this Quarterly
Report on Form 10-Q.
Cash Flows
The significant captions and amounts from our condensed consolidated statements of cash flows, which include the
effects of our Consolidated Funds and CLOs in accordance with U.S. GAAP, are summarized below.
|
|
Nine Months Ended September 30,
|
||
|
|
2025
|
2024
|
|
|
|
(Dollars in millions)
|
||
|
Statements of Cash Flows Data
|
|||
|
Net cash used in operating activities
|
$
(2,080.4)
|
$
(406.7)
|
|
|
Net cash used in investing activities
|
(57.4)
|
(50.9)
|
|
|
Net cash provided by financing activities
|
3,015.4
|
370.7
|
|
|
Effect of foreign exchange rate changes
|
82.3
|
23.7
|
|
|
Net change in cash, cash equivalents and restricted cash
|
$
959.9
|
$
(63.2)
|
|
Net cash used in operating activities
.
Net cash used in operating activities
includes the investment activity of our
Consolidated Funds. Excluding this activity, net cash used in operating activities was primarily driven by our earnings in the
respective periods after adjusting for significant non-cash activity, including non-cash performance allocations and incentive
fees, the related non-cash performance allocations and incentive fee related compensation, non-cash equity-based
compensation, and depreciation, amortization and impairments, all of which are included in earnings. Operating cash inflows
primarily include the receipt of management fees, realized performance allocations and incentive fees, while operating cash
outflows primarily include payments for operating expenses, including compensation and general, administrative and other
expenses.
Cash flows provided by operating activities during the
nine months ended September 30, 2025 and 2024
, excluding the
activities of our Consolidated Funds, were
$972.1 million
and
$867.3 million
, respectively. During the
nine months ended
September 30, 2025 and 2024
, operating
cash inflows
primarily included the receipt of management fees and realized
performance allocations and incentive fees, totaling approximately
$2.7 billion
and
$2.8 billion
, respectively. These inflows
were offset by payments for compensation and general, administrative and other expenses of approximately
$2.0 billion
and
$2.0 billion
for the
nine months ended September 30, 2025 and 2024
, respectively, which includes payment of 2024 and 2023
year-end bonuses paid in January 2025 and 2024, respectively.
125
Cash used to purchase investments, as well as the proceeds from the sale of such investments, are also reflected in our
operating activities as investments are a normal part of our operating activities. During the
nine months ended September 30,
2025
, investment proceeds were
$664.0 million
as compared to investment purchases of
$251.1 million
. During the
nine
months ended September 30, 2024
, investment proceeds were
$333.3 million
as compared to investment purchases of
$213.8
million
, which included a $115.1 million deferred consideration payment related to our investment in Fortitude.
The net cash provided by operating activities for the
nine months ended September 30, 2025 and 2024
also reflects the
investment activity of our Consolidated Funds. For the
nine months ended September 30, 2025
, purchases of investments by the
Consolidated Funds were
$9.0 billion
, while proceeds from the sales and settlements of investments by the Consolidated Funds
were
$5.2 billion
. For the
nine months ended September 30, 2024
, purchases of investments by the Consolidated Funds were
$5.0 billion
, while proceeds from the sales and settlements of investments by the Consolidated Funds were
$3.7 billion
.
Net cash used in investing activities
. Our investing activities generally reflect cash used for fixed assets, software for
internal use, and corporate treasury investments. For the
nine months ended September 30, 2025 and 2024
, cash used in
investing activities principally reflects purchases of fixed assets of
$57.4 million
and
$51.0 million
, respectively.
Net cash provided by financing activities
. Excluding the activities of our Consolidated Funds, net cash provided by (used
in) financing activities during the
nine months ended September 30, 2025 and 2024
was
$6.1 million
and
$(888.6) million
,
respectively. During the
nine months ended September 30, 2025
, we issued
$800.0 million
of
5.050%
senior notes due 2035,
and we made no borrowings or repayments under the revolving credit facilities. During the
nine months ended September 30,
2024
, we borrowed and subsequently repaid an aggregate of
$10.4 million
under the
Global Credit Revolving Credit Facility.
Dividends paid to our common stockholders were
$379.2 million
and
$377.8 million
for the
nine months ended
September 30, 2025 and 2024
, respectively. For the
nine months ended September 30, 2025 and 2024
, we paid
$482.8 million
and
$478.8 million
, respectively, to repurchase and retire
8.9 million
and
10.9 million
shares, respectively, which included
shares retired in connection with the net share settlement of equity-based awards. During the
nine months ended September 30,
2024
, we paid
$68.8 million
in January 2024, representing the final annual installment of the deferred consideration payable to
former Carlyle Holdings unitholders in connection with the Conversion. For more information, see Note 9 to the consolidated
financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
The net borrowings (payments) on loans payable by our Consolidated Funds during the
nine months ended September 30,
2025 and 2024
were
$2,755.1 million
and
$1,220.5 million
, respectively. Contributions from non-controlling interest holders
were
$599.1 million
and
$219.2 million
for the
nine months ended September 30, 2025 and 2024
, respectively, which relate
primarily to contributions from the non-controlling interest holders in Consolidated Funds. For the
nine months ended
September 30, 2025 and 2024
, distributions to non-controlling interest holders were
$308.1 million
and
$73.0 million
,
respectively, which relate primarily to distributions to the non-controlling interest holders in Consolidated Funds.
Our Balance Sheet
Total assets were
$27.1 billion
at
September 30, 2025
,
an increase
of
$4.0 billion
compared to
December 31, 2024
,
primarily attributable to
an increase
in Investments in Consolidated Funds of
$3.3 billion
and
an increase
in
Cash and cash
equivalents
of
$1.0 billion
, partially offset by
a decrease
in Investments, including Performance allocations of
$0.4 billion
. The
decrease
in Investments, including Performance allocations was primarily attributable to a decrease in Accrued performance
allocations, primarily driven by depreciation in CAP V and CP VII, as well as the impact of realizations in CPP II, partially
offset by appreciation in our AlpInvest funds and CP VIII. Refer to “—Cash Flows” in Part I, Item 2 of this Quarterly Report
on Form 10-Q for details on the
increase
in Cash and cash equivalents.
Total liabilities were
$20.2 billion
at
September 30, 2025
,
an increase
of
$3.5 billion
from
December 31, 2024
. The
increase
in liabilities was primarily attributable to
an increase
in
Loans payable of Consolidated Funds
of
$2.3 billion
,
an
increase
in
Debt obligations
of
$0.8 billion
,
an increase
in
Other liabilities of Consolidated Funds
of
$0.3 billion
, and
an
increase
in
Deferred revenue
of
$0.2 billion
, partially offset by
a decrease
in
Accrued compensation and benefits
of
$0.2 billion
.
The increase in
Debt obligations
was driven by our issuance of
$800.0 million
of
5.050%
senior notes due 2035 during the third
quarter of 2025. The increase in
Deferred revenue
was driven by the receipt of management fees not yet recognized as revenue.
The
decrease
in Accrued compensation and benefits was primarily attributable to a decrease in Accrued performance
allocations, on which Accrued performance allocations and incentive fee related compensation is based, and the payment of
year-end bonuses.
The assets and liabilities of the Consolidated Funds are generally held within separate legal entities and, as a result, the
assets of the Consolidated Funds are not available to meet our liquidity requirements and similarly the liabilities of the
126
Consolidated Funds are non-recourse to us. In addition, as previously discussed, the CLO term loans generally are secured by
the Company’s investment in the CLO, have a general unsecured interest in the Carlyle entity that manages the CLO, and do
not have recourse to any other Carlyle entity. The number of funds that we consolidate fluctuates period to period. In general,
the number of funds we are required to consolidate has been increasing as a result of the impacts of capital from our balance
sheet invested in new products and our indirect interest in funds through our indirect investment in Fortitude.
Our balance sheet without the effect of the Consolidated Funds can be seen in Note
17
,
Supplemental Financial
Information
, to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. At
September 30, 2025
, our total assets without the effect of the Consolidated Funds were
$15.9 billion
, including cash and cash
equivalents of
$2.2 billion
and net accrued performance revenues of
$2.6 billion
.
Unconsolidated Entities
Certain of our funds have entered into lines of credit secured by their investors’ unpaid capital commitments or by a
pledge of the equity of the underlying investment. These lines of credit are used primarily to reduce the overall number of
capital calls to investors or for working capital needs. In certain instances, however, they may be used for other investment
related activities, including serving as bridge financing for investments. The degree of leverage employed varies among our
funds.
Off-balance Sheet Arrangements
In the normal course of business, we enter into various off-balance sheet arrangements including sponsoring and owning
limited or general partner interests in consolidated and non-consolidated funds, entering into derivative transactions, and
entering into guarantee arrangements. We also have ongoing capital commitment arrangements with certain of our consolidated
and non-consolidated funds. We do not have any other off-balance sheet arrangements that would require us to fund losses or
guarantee target returns to investors in any of our other investment funds.
For further information regarding our off-balance sheet arrangements, see Note
2
,
Summary of Significant Accounting
Policies
, and Note
8
,
Commitments and Contingencies
, to the condensed consolidated financial statements included in this
Quarterly Report on Form 10-Q.
127
Contractual Obligations
The following table sets forth information relating to our contractual obligations as of
September 30, 2025
on a
consolidated basis and on a basis excluding the obligations of the Consolidated Funds:
|
Oct. 1, 2025 to
Dec. 31, 2025
|
2026-2027
|
2028-2029
|
Thereafter
|
Total
|
|||||
|
|
(Dollars in millions)
|
||||||||
|
Debt obligations
(1)
|
$
8.2
|
$
115.4
|
$
522.1
|
$
2,368.6
|
$
3,014.3
|
||||
|
Interest payable
(2)
|
37.4
|
291.0
|
277.7
|
1,780.1
|
2,386.2
|
||||
|
Other consideration
(3)
|
3.7
|
36.0
|
27.6
|
—
|
67.3
|
||||
|
Operating lease obligations
(4)
|
18.4
|
149.6
|
146.6
|
255.6
|
570.2
|
||||
|
Capital commitments to Carlyle funds
(5)
|
4,062.1
|
—
|
—
|
—
|
4,062.1
|
||||
|
Tax receivable agreement payments
(6)
|
—
|
11.0
|
12.6
|
48.0
|
71.6
|
||||
|
Loans payable of Consolidated Funds
(7)
|
100.3
|
796.2
|
797.2
|
10,904.6
|
12,598.3
|
||||
|
Unfunded commitments of the CLOs
(8)
|
13.7
|
—
|
—
|
—
|
13.7
|
||||
|
Consolidated contractual obligations
|
4,243.8
|
1,399.2
|
1,783.8
|
15,356.9
|
22,783.7
|
||||
|
Loans payable of Consolidated Funds
(7)
|
(100.3)
|
(796.2)
|
(797.2)
|
(10,904.6)
|
(12,598.3)
|
||||
|
Capital commitments to Carlyle funds
(5)
|
(3,388.1)
|
—
|
—
|
—
|
(3,388.1)
|
||||
|
Unfunded commitments of the CLOs
(8)
|
(13.7)
|
—
|
—
|
—
|
(13.7)
|
||||
|
Carlyle Operating Entities contractual obligations
|
$
741.7
|
$
603.0
|
$
986.6
|
$
4,452.3
|
$
6,783.6
|
||||
(1)
The table above assumes that no prepayments are made on the senior and subordinated notes and that the outstanding balances, if any, on the senior
credit facility and Global Credit Revolving Credit Facility are repaid on the maturity dates of credit facilities. The CLO term loans are included in the
table above based on the earlier of the stated maturity date or the date the CLO is expected to be dissolved. See Note
6
,
Borrowings
, to the condensed
consolidated financial statements for the various maturity dates of our borrowings.
(2)
The interest rates on the debt obligations as of
September 30, 2025
consist of: 3.500% on $425.0 million of senior notes, 5.050% on $800.0 million of
senior notes, 5.650% on $350.0 million of senior notes, 5.625% on $600.0 million of senior notes, 4.625% on $500.0 million of subordinated notes,
and a range of approximately
3.56%
to
10.12%
for our CLO term loans. Interest payments assume that no prepayments are made and loans are held
until maturity with the exception of the CLO term loans, which are based on the earlier of the stated maturity date or the date the CLO is expected to be
dissolved.
(3)
These obligations represent our estimate of amounts to be paid on the contingent cash obligations associated with our acquisition of Abingworth. The
payment obligations are unsecured obligations of the Company or a subsidiary thereof, subordinated in right of payment to indebtedness of the
Company and its subsidiaries, and do not bear interest.
(4)
We lease office space in various countries around the world, including our largest offices in Washington, D.C., New York City, London, Amsterdam,
and Hong Kong, which have non-cancelable lease agreements expiring in various years through 2036. The amounts in this table represent the minimum
lease payments required over the term of the lease.
(5)
These obligations generally represent commitments by us to fund a portion of the purchase price paid for each investment made by our funds. These
amounts are generally due on demand and are therefore presented in the less than one year category. A substantial majority of these investments is
expected to be funded by senior Carlyle professionals and other professionals through our internal co-investment program. Of the
$4.0 billion
of
unfunded commitments to the funds, approximately
$3.4 billion
is subscribed individually by senior Carlyle professionals, advisors and other
professionals, with the balance funded directly by the Company. Additionally, these obligations include accrued giveback that has been realized but not
yet paid to the respective funds, a portion of which is payable by current and former senior Carlyle professionals.
(6)
In connection with our initial public offering, we entered into a tax receivable agreement with the limited partners of the Carlyle Holdings partnerships
whereby we agreed to pay such limited partners 85% of the amount of cash tax savings, if any, in U.S. federal, state and local income tax realized as a
result of increases in tax basis resulting from exchanges of Carlyle Holdings partnership units for common units of The Carlyle Group L.P. From and
after the consummation of the Conversion, former holders of Carlyle Holdings partnership units do not have any rights to payments under the tax
receivable agreement except for payment obligations pre-existing at the time of the Conversion with respect to exchanges that occurred prior to the
Conversion. These obligations are more than offset by the future cash tax savings that we are expected to realize.
(7)
These obligations represent amounts due to holders of debt securities issued by the consolidated CLO vehicles. These obligations include interest to be
paid on debt securities issued by the consolidated CLO vehicles. Interest payments assume that no prepayments are made and loans are held until
maturity. For debt securities with rights only to the residual value of the CLO and no stated interest, no interest payments were included in this
calculation. Interest payments on variable-rate debt securities are based on interest rates in effect as of
September 30, 2025
, at spreads to market rates
pursuant to the debt agreements, and range from
1.65%
to
11.83%
.
(8)
These obligations represent commitments of the CLOs to fund certain investments. These amounts are generally due on demand and are therefore
presented in the less than one year category.
Excluded from the table above are liabilities for uncertain tax positions of
$36.7 million
at
September 30, 2025
as we are
unable to estimate when such amounts may be paid.
128
Contingent Cash Payments For Business Acquisitions and Strategic Investments
We have certain contingent cash obligations associated with our acquisition of Abingworth, which are accounted for as
compensation expense, and are accrued over the service period. If earned, payments are made in the quarter following the
performance year to which the payments relate. The contingent cash obligations relate to future incentive payments of up to
$130.0 million that are payable upon the achievement of certain performance targets during 2025 through 2028, which is the
maximum amount that could be paid as of
September 30, 2025
. Through
September 30, 2025
, we paid
$2.7 million
related to
these contingent obligations.
In connection with our acquisition of Carlyle Aviation Partners, we had contingent cash payments related to an earn-out
of up to $150.0 million that were payable upon the achievement of certain revenue and earnings performance targets during
2020 through 2025. We previously entered into a termination and settlement agreement with respect to the earn-out and made a
final payment of
$1.0 million
during the first quarter of 2025 for total earn-out payments of
$124.7 million
.
Risk Retention Rules
We will continue to comply with the risk retention rules governing CLOs issued in Europe for which we are a sponsor,
which require a combination of capital from our balance sheet, commitments from senior Carlyle professionals and/or third-
party financing.
Guarantees
See Note
8
,
Commitments and Contingencies
, to the condensed consolidated financial statements included in this
Quarterly Report on Form 10-Q for information related to all of our material guarantees.
Indemnifications
In many of our service contracts, we agree to indemnify the third-party service provider under certain circumstances. The
terms of the indemnities vary from contract to contract, and the amount of indemnification liability, if any, cannot be
determined and has not been included in the table above or recorded in our condensed consolidated financial statements as of
September 30, 2025
. See Note
8
,
Commitments and Contingencies
, to the condensed consolidated financial statements included
in this Quarterly Report on Form 10-Q for information related to indemnifications.
Contingent Obligations (Giveback)
Carried interest is ultimately realized when: (1) an underlying investment is profitably disposed of, (2) certain costs borne
by the limited partner investors have been reimbursed, (3) the fund’s cumulative returns are in excess of the preferred return,
and (4) we have decided to collect carry rather than return additional capital to limited partner investors. Realized carried
interest may be required to be returned by us in future periods if the fund’s investment values decline below certain levels.
When the fair value of a fund’s investments remains constant or falls below certain return hurdles, previously recognized
performance allocations are reversed. See Note
8
,
Commitments and Contingencies
, to the condensed consolidated financial
statements included in this Quarterly Report on Form 10-Q for additional information related to our contingent obligations
(giveback).
Other Contingencies
In the ordinary course of business, we are a party to litigation, investigations, inquiries, employment-related matters,
disputes and other potential claims. We discuss certain of these matters in Note
8
,
Commitments and Contingencies
, to the
condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
129
Carlyle Common Stock
A rollforward of our common stock outstanding for the
nine months ended September 30, 2025
is as follows:
|
Nine Months Ended
September 30,
|
|
|
2025
|
|
|
Balance, beginning of period
|
357,183,632
|
|
Shares issued
|
7,189,022
|
|
Shares repurchased/retired
|
(4,236,146)
|
|
Balance, end of period
|
360,136,508
|
Shares of The Carlyle Group Inc. common stock issued during the
nine months ended September 30, 2025
relate to the
vesting of the Company’s restricted stock units and shares issued and delivered in connection with our equity method
investment in NGP. Shares of The Carlyle Group Inc. common stock repurchased during the
nine months ended September 30,
2025
relate to shares repurchased and subsequently retired as part of our share repurchase programs. Shares of The Carlyle
Group Inc. common stock issued and repurchased/retired during the
nine months ended September 30, 2025
include shares
retired as part of the net share settlement of equity-based awards.
The total shares as of September 30, 2025 as shown above exclude approximately 0.3 million net common shares,
representing the vesting of restricted stock units subsequent to September 30, 2025 that will participate in the common
shareholder dividend that will be paid on November 19, 2025.
Critical Accounting Policies and Estimates
The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires our
management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses,
and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information,
information currently available to us and on various other assumptions management believes to be reasonable under the
circumstances. Actual results could vary from those estimates and we may change our estimates and assumptions in future
evaluations. Changes in these estimates and assumptions may have a material effect on our results of operations and financial
condition.
Other than the Restructuring as discussed in Note
4
,
Investments
, which resulted in the impairment of our investment in
NGP, there have been no material changes in the critical accounting estimates since those discussed in
our Annual Report on
Form 10-K for the year ended
December 31, 2024
.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Our primary exposure to market risk is related to our role as general partner or investment advisor to our investment
funds and the sensitivities to movements in the fair value of their investments, including the effect on management fees,
incentive fees and investment income, including performance allocations. Although our investment funds share many common
themes, each of our asset management asset classes runs its own investment and risk management processes, subject to our
overall risk tolerance and philosophy. The investment process of our investment funds involves a comprehensive due diligence
approach, including review of reputation of shareholders and management, company size and sensitivity of cash flow
generation, business sector and competitive risks, portfolio fit, exit risks and other key factors highlighted by the deal team. Key
investment decisions are generally subject to approval by both the fund-level managing directors, as well as the investment
committee, which generally comprises one or more of the three founding partners as well as senior investment professionals.
Once an investment in a portfolio company has been made, our fund teams closely monitor the performance of the portfolio
company, generally through frequent contact with management and the receipt of financial and management reports.
There was no material change in our market risks during the
nine months ended September 30, 2025
. For additional
information, refer to our Annual Report on Form 10-K for the year ended
December 31, 2024
.
130
Item 4.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be
disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding
required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any
disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any
controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of
achieving the desired control objectives.
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated
the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by
this report. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial
officer concluded that, as of the end of the period covered by this report, the design and operation of our disclosure controls and
procedures were effective to accomplish their objectives at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)
under the Exchange Act) during the fiscal quarter ended
September 30, 2025
that have materially affected, or that are
reasonably likely to materially affect, our internal control over financial reporting.
131
PART II - OTHER INFORMATION
Item 1.
Legal Proceedings
The information required with respect to this item can be found under “Legal Matters” in Note
8
,
Commitments and
Contingencies
, of the notes to the Company’s condensed consolidated financial statements contained in this Quarterly Report
on Form 10-Q, and such information is incorporated by reference into this Item 1.
Item 1A. Risk Factors
For a discussion of our potential risks and uncertainties, see the information under Item 1A. “Risk Factors” in our Annual
Report on Form 10-K for the year ended
December 31, 2024
.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table sets forth repurchases of our common stock during the three months ended
September 30, 2025
for
the periods indicated. During the three months ended
September 30, 2025
,
1.6 million
shares were repurchased. In addition,
1.7
million
shares were retired in connection with the net share settlement of equity-based awards, which are not included in the
table below.
|
Period
|
(a) Total number of
shares
purchased
|
(b) Average
price paid per
share
|
(c) Total number of
shares purchased as
part of publicly
announced plans or
programs
|
(d) Maximum number (or
approximate dollar value)
of shares that may yet be
purchased under the plans
or programs (3)
|
|
(Dollars in millions, except share and per share data)
|
||||
|
July 1, 2025 to July 31, 2025 (1)
|
—
|
$
—
|
—
|
$
879.3
|
|
August 1, 2025 to August 31, 2025 (1)(2)
|
1,101,099
|
$
63.69
|
1,101,099
|
$
809.2
|
|
September 1, 2025 to September 30, 2025
(1)(2)
|
467,300
|
$
63.93
|
467,300
|
$
779.3
|
|
Total
|
1,568,399
|
1,568,399
|
||
(1)
The Board of Directors reset the total repurchase authorization of our previously approved share repurchase program to
$1.4 billion
in shares of our common stock, effective as of February 6, 2024. Under the share repurchase program, shares of our common stock
may be repurchased from time to time in open market transactions, in privately negotiated transactions, or otherwise, including
through Rule 10b5-1 plans. The timing and actual number of shares of common stock repurchased will depend on a variety of
factors, including legal requirements and price, economic, and market conditions. In addition to the repurchase of common stock,
the repurchase program is used for the payment of tax withholding amounts upon net share settlement of equity-based awards
granted pursuant to our Equity Incentive Plan or otherwise based on the value of shares withheld that would have otherwise been
issued to the award holder. The repurchase program may be suspended or discontinued at any time and does not have a specified
expiration date.
(2)
Reflects shares purchased in open market and brokered transactions, which were subsequently retired.
(3)
The remaining repurchase authorization was
$369.3 million
as of
September 30, 2025
when factoring in the net share settlement of
equity-based awards.
Item 3.
Defaults Upon Senior Securities
Not applicable.
Item 4.
Mine Safety Disclosures
Not applicable.
Item 5.
Other Information
132
Item 6.
Exhibits
The following is a list of all exhibits filed or furnished as part of this report:
|
Exhibit No.
|
Description
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
10.1*
|
|
|
22*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1**
|
|
|
32.2**
|
|
|
101.INS
|
Inline XBRL Instance Document - the Instance Document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document.
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Labels Linkbase Document.
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
104
|
The cover page from The Carlyle Group Inc.’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2025
, formatted in Inline XBRL (included within the Exhibit 101 attachments).
|
|
*
|
Filed herewith.
|
|
**
|
Furnished herewith.
|
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or
other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely
on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents
were made solely within the specific context of the relevant agreement or document and may not describe the actual state of
affairs as of the date they were made or at any other time.
133
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
|
|
The Carlyle Group Inc.
|
|||
|
Date: November 7, 2025
|
|
By:
|
|
/s/ John C. Redett
|
|
|
Name:
|
|
John C. Redett
|
|
|
|
Title:
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and
Authorized Officer)
|
||
TABLE OF CONTENTS
Part I Financial InformationItem 1. Financial StatementsItem 2. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart II - Other InformationItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Mine Safety DisclosuresItem 5. Other InformationItem 6. Exhibits