Core Viewpoint - The company faces performance challenges in 2025 due to 'return-insensitive' captive CLO equity funds, leading to faster loan spread compression than CLO liabilities can adjust [1] Group 1: Portfolio Management - The company increased its allocation to non-CLO credit assets to 26% of the portfolio, aiming for higher risk-adjusted returns in regulatory capital relief and private credit [1] - Active portfolio management through 34 resets and 27 refinancings in 2025 resulted in an average CLO debt cost saving of 42 basis points, helping to mitigate some loan spread compression [1] Group 2: Market Conditions - The current loan market is characterized by a 'super majority' of new CLOs being purchased by captive funds, similar to the risk retention period of 2017-2018 [1] Group 3: Strategic Partnerships - Strategic partnerships with Muzinich in the U.S. and Europe are aimed at increasing top-line revenue shares, providing a diversified income stream beyond direct CLO equity holdings [1] Group 4: Credit Profile - The company maintains a higher quality credit profile compared to the broader market, with lower CCC-rated exposure at 4.1% versus 4.3% and a superior junior OC cushion at 4.5% compared to 3.9% [1]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported investment income of $5.9 million, or $0.86 per share, an increase from $5.4 million in the previous quarter [15] - Total expenses for the quarter were $2.5 million, or $0.37 per share, compared to $0.35 in the prior quarter [15] - Net investment income rose to $3.4 million, or $0.49 per share, up from $3 million, or $0.44 per share in Q3 [15] - The net loss for the quarter was $12.4 million, or $1.81 per share [16] - Total assets as of December 31, 2025, were $141.3 million, with total net assets of $98.6 million, resulting in a net asset value per share of $14.42, down from $16.89 as of September 30 [16][21] Business Line Data and Key Metrics Changes - The portfolio generated strong recurring cash flows totaling $9.8 million, or $1.44 per share, exceeding distributions and expenses by $0.41 per share, an increase from $8.7 million, or $1.28 per share in the prior quarter [16] - The weighted average gap yield of the portfolio decreased slightly to 12.99% at quarter end, compared to 13.07% as of September 30 [11] Market Data and Key Metrics Changes - The CLO equity market faced significant challenges in 2025, with industry returns estimated at -10% for the year [9] - The primary pressure on performance came from a substantial tightening of spreads in the underlying loans inside CLOs, approximately 34 basis points in the U.S. loan market [9] - The company observed a gradual slowing down in loan repricing prepayment speeds, with the ratio of CLO loan portfolios pricing above par decreasing from over 50% to about 30% [32] Company Strategy and Development Direction - The company remains optimistic about CLOs, viewing them as attractive investment opportunities compared to other asset classes, with a focus on disciplined portfolio management and opportunistic investments [6][7] - The company plans to utilize its data-driven approach to CLO equity investing to grow its portfolio thoughtfully [6] - The company aims to manage exposure to individual credits or sectoral weaknesses through its diversified portfolio, which consists of CLOs with reinvestment periods ending in 2026 and later [8][14] Management's Comments on Operating Environment and Future Outlook - Management highlighted a resilient macro environment with inflation reducing to central bank targets and a low leveraged loan default rate, indicating continued opportunities for CLO equity investing [7] - The company expects M&A activity to increase marginally and anticipates that the pressure from tightening loan spreads will reduce in the coming quarters [26][27] - Management expressed cautious optimism regarding an improving backdrop for the asset class, with expectations of less spread compression in 2026 compared to 2025 [10][11] Other Important Information - The company executed share issuances through its at-the-market equity issuance program, issuing 30,680 shares for net proceeds of approximately $0.5 million during the quarter [17] - Dividends of $0.22 per common share were distributed in October, November, December, and January, with plans for similar distributions in the following months [18] Q&A Session Summary Question: Can you comment on the investment environment in the primary versus secondary market? - Management noted opportunities in both markets but indicated a current overweight in the secondary market [24] Question: What are the refinancing and reset opportunities in your portfolio over the next few quarters? - Management mentioned multiple positions exiting their non-call periods, expecting upside in a tightening CLO liability spread environment [25] Question: Can you comment on the supply of new loans expected in 2026? - Management expects M&A activity to increase and anticipates a reduction in pressure from tightening loan spreads in the coming quarters [26][27] Question: Is the slowing loan repricing momentum specific to your portfolio or a larger market dynamic? - Management indicated it is both a larger market dynamic and observable in their portfolio, with a gradual slowing in loan repricing speeds [30][32] Question: How does the company view the ATM share issuance relative to the stock's trading position? - Management stated they continue to utilize the ATM when trading at a premium, noting the stock was trading at NAV [34]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported investment income of $5.9 million, or $0.86 per share, compared to $5.4 million in the previous quarter [15] - Total expenses for the quarter were $2.5 million, or $0.37 per share, up from $0.35 in the prior quarter [15] - Net investment income increased to $3.4 million, or $0.49 per share, from $3 million, or $0.44 per share in Q3 [15] - The net loss for the quarter was $12.4 million, or $1.81 per share [16] - Total assets as of December 31, 2025, were $141.3 million, with total net assets of $98.6 million, resulting in a net asset value per share of $14.42, down from $16.89 as of September 30 [16][21] Business Line Data and Key Metrics Changes - The portfolio generated strong recurring cash flows totaling $9.8 million, or $1.44 per share, exceeding distributions and expenses by $0.41 per share, an increase from $8.7 million, or $1.28 per share in the prior quarter [16] - The weighted average GAAP yield of the portfolio decreased slightly to 12.99% at quarter end from 13.07% as of September 30 [11] Market Data and Key Metrics Changes - The CLO equity market faced significant challenges in 2025, with industry returns estimated at -10% for the year [9] - The U.S. loan market experienced substantial spread tightening of approximately 34 basis points [9] - The company noted that tightening credit spreads occurred unevenly, with higher quality credits being bid up while stressed names faced difficulties [9] Company Strategy and Development Direction - The company remains optimistic about CLOs, viewing them as attractive investment opportunities compared to other asset classes, with high demand expected to continue [6] - The focus is on disciplined portfolio management, opportunistic investments, and driving long-term total returns [7] - The company aims to utilize a data-driven approach to CLO equity investing, leveraging machine learning and natural language processing technologies [12] Management's Comments on Operating Environment and Future Outlook - Management highlighted a resilient macro environment with improving inflation and healthy corporate earnings, which could provide opportunities for CLO equity investing [6][7] - The company expects refinancing activity to deliver less spread compression in 2026 compared to 2025, potentially stabilizing the market [10] - Management expressed cautious optimism regarding improving M&A activity and new loan issuance in specific sectors [27] Other Important Information - The company executed share issuances through its ATM equity issuance program, issuing 30,680 shares for net proceeds of approximately $0.5 million [17] - Dividends of $0.22 per common share were distributed in the last quarter and are planned for the upcoming months [18] Q&A Session Summary Question: Can you comment on the investment environment in the primary versus secondary market? - Management noted opportunities in both markets but is currently more overweight in the secondary market [24] Question: Can you comment on refinancing and reset opportunities in your portfolio? - Management indicated multiple positions exiting non-call periods, expecting upside in a tightening CLO liability spread environment [25] Question: What is the expected supply of new loans in 2026? - Management anticipates a marginal increase in M&A activity and new loan issuance, with certain sectors lagging [26] Question: Is the slowing loan repricing momentum specific to the portfolio or a larger market dynamic? - Management confirmed it is both a larger market dynamic and observable in their portfolio, with a gradual slowing in loan repricing speeds [30][32] Question: How does the company view the ATM share issuance relative to stock trading at NAV? - Management stated they continue to utilize the ATM when trading at a premium, but the stock was trading at NAV recently [34]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported investment income of $5.9 million, an increase from $5.4 million in the prior quarter, with net investment income rising to $3.4 million, or $0.49 per share, up from $3 million, or $0.44 per share in Q3 [15][17] - The net loss for the quarter was $12.4 million, or $1.81 per share, with net unrealized losses on investments amounting to $15.7 million, or $2.3 per share [16][17] - Total assets as of December 31, 2025, were $141.3 million, with total net assets of $98.6 million, resulting in a net asset value per share of $14.42, down from $16.89 as of September 30 [17][22] Business Line Data and Key Metrics Changes - The company's portfolio generated strong recurring cash flows totaling $9.8 million, or $1.44 per share, exceeding distributions and expenses by $0.41 per share, an increase from $8.7 million, or $1.28 per share in the prior quarter [17] - The weighted average gap yield of the portfolio decreased slightly to 12.99% at quarter end, compared to 13.07% as of September 30 [11] Market Data and Key Metrics Changes - The CLO equity market faced challenges in Q4 2025 due to tight spreads, with industry returns estimated at -10% for the year [9] - The U.S. loan market experienced substantial spread tightening of approximately 34 basis points, impacting CLO equity performance [9] Company Strategy and Development Direction - The company remains optimistic about CLOs, viewing them as attractive investment opportunities compared to other asset classes, with a focus on disciplined portfolio management and opportunistic investments [6][20] - The strategy includes managing exposure to individual credits and sectoral weaknesses, with nearly the entire portfolio composed of CLOs with reinvestment period end dates of 2026 and later [7][14] Management's Comments on Operating Environment and Future Outlook - Management highlighted a resilient macro environment with inflation reducing to central bank targets and a low leveraged loan default rate, indicating potential opportunities for CLO equity investing [6] - The company expects refinancing activity to deliver less spread compression in 2026, with improved new loan issuance activity supporting wider CLO equity spreads [10][11] Other Important Information - The company executed share issuances through its at-the-market equity issuance program, issuing 30,680 shares for net proceeds of approximately $0.5 million during the quarter [18] - Dividends of $0.22 per common share were distributed in October, November, December, and January, with plans for the same in February, March, April, and May [19] Q&A Session Summary Question: Can you comment on the investment environment in the primary versus secondary market? - Management noted opportunities in both markets but indicated a current overweight in the secondary market [24][25] Question: What are the refinancing and reset opportunities in your portfolio over the next few quarters? - Management mentioned multiple positions exiting their non-call periods, expecting upside from tightening CLO liability spreads [26] Question: Can you comment on the supply of new loans expected in 2026? - Management expressed cautious optimism for improving M&A activity and new loan issuance from specific sectors, while monitoring central bank rate cutting impacts [27][28] Question: Is the slowing loan repricing momentum specific to your portfolio or a larger market dynamic? - Management indicated it is both a larger market dynamic and observable in their portfolio, with a gradual slowing in loan pricing [31][32] Question: How does the company view the ATM share issuance relative to current stock trading? - Management stated they continue to utilize the ATM when trading at a premium, noting the stock was trading at NAV [33][34]

TPG 2026 Conference Summary Company Overview - **Company**: TPG (NasdaqGS: TPG) - **Founded**: 1992, with roots in managing the Bass family office - **Public Listing**: Went public in 2022 - **Assets Under Management (AUM)**: Approximately $290 billion [4][6] Key Financial Highlights - **4Q 2025 Earnings**: Announced on February 10, 2026, with proactive communication to address market concerns [5] - **Capital Raised**: $51 billion in 2025, a 70% increase from $30 billion in 2024 [7][16] - **Investment Deployment**: Over $50 billion deployed in 2025 [7] - **Fee-Related Revenue (FRR)**: Grew to $2.1 billion; Free Cash Flow (FRE) increased to approximately $950 million from over $300 million at IPO [8] - **FRE Margin**: Expected to expand from 45% to 47% in 2026, with an 800 basis point increase since IPO [18] Growth Strategy - **Diversification of AUM**: Shift from 80% private equity at IPO to 50% currently, with growth in other asset classes such as private credit and real estate [10][11] - **Horizontal and Vertical Growth**: Focus on expanding existing businesses and entering new asset classes, including GP-Led Secondaries and hybrid solutions [12][13] - **Strategic Priorities for 2026**: Complete existing fundraises, scale new businesses, and expand private wealth and insurance channels [14][15] Fundraising Insights - **Product Diversification**: In 2025, TPG was in the market for about 25 products, expected to increase to 35 in 2026 [19] - **Credit Business**: Raised over $20 billion for credit businesses in 2025, with expectations for robust fundraising in 2026 [20] - **Real Estate Business**: Anticipated growth with at least four different real estate funds in 2026, supported by strong early dialogues with Limited Partners (LPs) [20] Realizations and Market Conditions - **Realization Strategy**: Averaged $25 billion in realizations annually over the past five years, with expectations for a pickup in 2026 due to stabilizing market conditions [21][22] Insurance Business Development - **Partnership with Jackson Financial**: Established a long-term investment management agreement, focusing on direct lending and investment-grade asset-backed finance [23][26] - **Expansion of Insurance Relationships**: Leveraging Angelo Gordon's capabilities to enhance offerings for insurance clients [24] Private Wealth Channel - **TPOP Launch**: Successfully raised about $1.5 billion since its launch, with plans to expand distribution partnerships [30][31] - **Future Products**: Introduction of a multi-strategy private credit interval fund and a non-traded REIT to broaden offerings [32] Credit Quality and Management - **Direct Lending Focus**: Twin Brook's direct lending strategy targets companies with $0-$25 million EBITDA, maintaining lower leverage levels [39] - **Credit Quality Assurance**: High credit quality with low pick rates, active management of risks associated with portfolio companies [40] Conclusion - TPG is positioned for continued growth through diversification, strategic partnerships, and a focus on expanding its asset management capabilities across various sectors, including private equity, credit, and real estate. The company aims to leverage its strong fundraising capabilities and enhance its offerings in the insurance and private wealth channels.

Financial Data and Key Metrics Changes - TPG reported GAAP net income attributable to TPG Inc. of $77 billion and after-tax distributable earnings of $304 million, or $0.71 per share of Class A common stock [4] - Full-year fee-related revenue reached $2.1 billion, including $628 million for the fourth quarter, which grew 36% year-over-year [31] - After-tax distributable earnings increased 17% year-over-year to $304 million, marking the highest level since becoming a public company [35] - Total AUM increased 23% year-over-year to $303 billion, driven by $51 billion of capital raised and $24 billion of value creation [35] Business Line Data and Key Metrics Changes - Software represents 11% of total AUM, with 18% in private equity and approximately 2% in credit [8] - The credit platform raised a record $21 billion during the year, up 67% from 2024, with a record $9 billion raised in the fourth quarter alone [17] - Private equity fundraising grew over 80% to $28 billion in 2025, while overall industry fundraising for PE declined 11% [20] - The real estate platform appreciated 9% in 2025, with $6 billion of capital deployed [25] Market Data and Key Metrics Changes - The company experienced double-digit value creation across nearly all platforms in 2025, with private equity strategies appreciating 11% over the last twelve months [37] - The credit platform also appreciated 11% over the last twelve months, maintaining strong credit quality with non-accruals just over 1% [38] - The real estate portfolios appreciated more than 9% for the year, driven by robust value creation in data center holdings and other sectors [39] Company Strategy and Development Direction - TPG aims to continue driving outsized growth by scaling existing and newer strategies, deepening integration of capital markets capabilities, and selectively capitalizing on inorganic opportunities [28] - The company is focused on expanding its private wealth strategy and enhancing its insurance solutions business, with a strategic partnership with Jackson Financial expected to close soon [12][42] - TPG plans to begin fundraising for several new funds in 2026, including TPG Real Estate's next fund and various Asia-focused funds [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the firm's ability to sustain growth and deliver differentiated value for stakeholders, citing a strong performance in 2025 as a foundation for future success [47] - The company anticipates another robust year of capital formation in 2026, expecting aggregate capital raising to exceed $50 billion [41] - Management highlighted the importance of maintaining strong relationships with borrowers and sponsors to ensure credit quality and performance [50][54] Other Important Information - TPG's new and emerging strategies attracted over $7 billion of commitments in 2025, indicating effective identification and scaling of high-potential opportunities [16] - The company ended 2025 with $72 billion of dry powder, representing 43% of fee-earning AUM, positioning it well for future investments [35] Q&A Session Summary Question: Concerns about direct lending performance sustainability - Management acknowledged the market's skepticism regarding direct lending performance but emphasized the unique characteristics of their lower middle market focus, which differs from upper middle market dynamics [50][51] Question: Inquiry about transaction fees and revenue outlook - Management noted that transaction fees in Q4 were driven by increased deployment and diversification across various platforms, indicating a long-term growth opportunity in capital markets [65][66] Question: Outlook for net deployment in credit business - Management highlighted the significant growth in the credit business and the expected upward trend in deployment opportunities due to increased capital formation and synergies from the Angelo Gordon acquisition [76][77]

Financial Data and Key Metrics Changes - TPG reported GAAP net income attributable to TPG Inc. of $77 billion and after-tax distributable earnings of $304 million, or $0.71 per share of Class A common stock [4][35] - Full-year fee-related revenue reached $2.1 billion, including $628 million for the fourth quarter, which grew 36% year-over-year [31] - The company finished 2025 with $303 billion of total AUM, up 23% from 2024, driven by $51 billion of capital raised and $24 billion of value creation [35] Business Line Data and Key Metrics Changes - In credit, TPG raised a record $21 billion of credit capital during the year, up 67% from 2024, with a record $9 billion raised in the fourth quarter alone [17] - Private equity fundraising grew over 80% to $28 billion in 2025, while overall industry fundraising for PE declined 11% [20] - The real estate platform appreciated 9% in 2025, with $6 billion of capital deployed [25] Market Data and Key Metrics Changes - Software represents 11% of total AUM, with 18% in private equity and approximately 2% in credit [8] - The company ended 2025 with $72 billion of dry powder, representing 43% of fee-earning AUM [35] Company Strategy and Development Direction - TPG aims to continue driving outsized growth by scaling existing and newer strategies, deepening integration of capital markets capabilities, and selectively capitalizing on inorganic opportunities [28][29] - The company is focused on expanding its private wealth strategy and enhancing its insurance solutions business [12][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to sustain growth and deliver differentiated value for stakeholders, expecting 2026 to be another robust year of capital formation with aggregate capital raising expected to exceed $50 billion [40][41] - The company highlighted the importance of avoiding capital loss and managing exposures in the lending markets, particularly in the lower middle market [56] Other Important Information - TPG announced a long-term strategic partnership with Jackson Financial, which is expected to provide predictable fee revenue and enhance credit capabilities [12] - The company launched several new products in 2025, including Tika, a growth equity strategy, and Advantage Direct Lending, a new core middle market direct lending strategy [15] Q&A Session Questions and Answers Question: Concerns about direct lending performance sustainability - Management emphasized the differences between lower middle market lending and upper middle market lending, highlighting their unique position and rigorous monitoring of borrower performance [50][51][54] Question: Inquiry about transaction fees and revenue outlook - Management noted that transaction fees in Q4 were driven by increased deployment and diversification across various platforms, indicating a long-term growth opportunity in capital markets [66][67] Question: Outlook for net deployment in credit business - Management discussed the significant growth in credit capital and the synergies from the TPG and Angelo Gordon collaboration, which are expected to enhance deployment opportunities [78]

Financial Data and Key Metrics Changes - TPG reported GAAP net income attributable to TPG Inc. of $77 billion and after-tax distributable earnings of $304 million, or $0.71 per share of Class A common stock [3] - Full-year fee-related revenue reached $2.1 billion, including $628 million for the fourth quarter, which grew 36% year-over-year [29] - The company finished 2025 with $303 billion of total AUM, up 23% from 2024, driven by $51 billion of capital raised and $24 billion of value creation [34] Business Line Data and Key Metrics Changes - Software represents 11% of total AUM, with 18% in private equity and approximately 2% in credit [6] - The credit platform raised a record $21 billion of credit capital during the year, up 67% from 2024 [16] - Private equity fundraising grew over 80% to $28 billion in 2025, while overall industry fundraising for PE declined 11% [19] Market Data and Key Metrics Changes - The company ended 2025 with $72 billion of dry powder, representing 43% of fee-earning AUM [34] - The private equity strategies appreciated 3% in the fourth quarter and 11% over the last twelve months [36] - The credit platform also appreciated 3% in the quarter and 11% over the last twelve months [36] Company Strategy and Development Direction - TPG aims to continue driving outsized growth by scaling existing and newer strategies, deepening integration of capital markets capabilities, and selectively capitalizing on inorganic opportunities [27] - The company is focused on expanding its private wealth strategy and enhancing its insurance solutions business [11][41] - TPG plans to begin fundraising for several new funds in real estate and credit, indicating a multiyear period of growth [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of performance and the ability to maintain strong capital formation, expecting 2026 to exceed $50 billion in capital raising [39] - The company highlighted the importance of differentiating its offerings in the market, particularly in the lower middle market, which is less competitive than the upper middle market [50] - Management noted that the strong performance and disciplined investment approach position TPG well to capitalize on attractive investments [9] Other Important Information - TPG's new and emerging strategies attracted over $7 billion of commitments in 2025, underscoring the firm's ability to identify and scale high-potential opportunities [14] - The company reported a record FRE margin of 52% in the fourth quarter and a full-year FRE margin of 45%, reflecting significant capital markets revenue [32] Q&A Session Summary Question: Concerns about sustaining performance in direct lending - Management emphasized the unique dynamics of the lower middle market, where TPG operates as a primary lender with higher coverage ratios and disciplined lending practices [50][51] - They highlighted their rigorous monitoring processes and strong relationships with borrowers, which enhance their ability to value the portfolio accurately [52][54] Question: Inquiry about transaction fees and revenue outlook - Management noted that transaction fees in Q4 were driven by a broadening capital markets business and a significant increase in deployment activity [66] - They expect capital markets to be a long-term growth opportunity, despite some lumpiness in revenue [66] Question: Outlook for net deployment in credit - Management indicated that the credit business has seen substantial growth in capital formation and deployment, particularly in structured credit and new strategies like Advantage Direct Lending [78][79]

Financial Data and Key Metrics Changes - The company reported fee-related earnings per share of $1.08, total operating earnings per share of $1.42, and adjusted net income per share of $1.12, with adjusted net income per share excluding carried interest repayment obligation being $1.30 for Q4 [3] - Management fees for the quarter were $1.1 billion, up 24% year-over-year, driven by fundraising initiatives and deployment across the firm [3] - Total transaction and monitoring fees were $269 million in the quarter, while fee-related earnings were $972 million, reflecting a 15% year-over-year increase [4] Business Line Data and Key Metrics Changes - Insurance segment operating earnings in Q4 were $268 million, with total insurance economics for 2025 reaching $1.9 billion, up 15% for the year [4][6] - Strategic Holdings operating earnings were $44 million in Q4, more than doubling compared to 2024 [6] - Realized performance income within the asset management segment was $528 million, with total monetization activity exceeding $550 million [7] Market Data and Key Metrics Changes - The company raised $28 billion of new capital in Q4, bringing the full-year capital raise to $129 billion, the highest in its history [9] - The North America Private Equity Fund now has over $19 billion of committed capital, while the Global Infrastructure Fund has nearly $16 billion of commitments [10][11] - The K Series suite of products raised $4.5 billion in Q4 and over $16 billion in full year 2025, nearly double the amount raised in 2024 [12] Company Strategy and Development Direction - The company is focused on three growth engines: asset management, insurance, and strategic holdings, positioning itself well for long-term growth [15] - The acquisition of Arctos, valued at $1.4 billion, aims to create a new investing vertical called KKR Solutions, expected to reach $100+ billion of AUM [20][24] - The company emphasizes a collaborative culture to maximize business impact and attract top talent [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding fundraising and fee-related earnings targets for 2026, with a focus on maintaining a strong monetization pipeline [26] - The company noted that despite market volatility, it remains well-positioned due to its disciplined portfolio construction and deployment strategy [30] - Management highlighted the importance of long-term performance over chasing favorable conditions, indicating a strong outlook for the next several years [33] Other Important Information - The company plans to increase its annual dividend from $0.74 to $0.78 per share, marking the seventh consecutive year of dividend increases since its C-Corp conversion [13] - The company has $118 billion of dry powder available for future investments, indicating strong capital availability [18] Q&A Session Questions and Answers Question: How has the company reunderwritten its private portfolios for tariffs and AI? - Management indicated that they have minimal exposure to tariffs and have been proactive in addressing AI-related risks through careful portfolio construction and selling assets that posed threats [34][36][38] Question: Is the strong 2025 result a level to build off of, given the linear deployment model? - Management confirmed that 2025 was a record deployment year and expects to deploy more in the current year, highlighting broad-based deployment across strategies and geographies [42][48] Question: What are the expectations for management fee growth in 2026? - Management expressed confidence in exceeding the $450 million FRE target for 2026, supported by record capital raising and a strong trajectory for management fees [49][51]

Financial Data and Key Metrics Changes - In 2025, the company raised $112 billion of capital, reflecting strong demand from various investor segments [5] - Fee-bearing capital increased by 12% year-over-year to over $600 billion [6] - Fee-related earnings reached a record $3 billion, up 22% year-over-year, while distributable earnings were $2.7 billion, an increase of 14% from the prior year [6][24] - In Q4 2025, fee-related earnings were up 28% year-over-year to $867 million, with margins at 61% for the quarter [23][24] Business Line Data and Key Metrics Changes - The renewable power segment saw significant investments, including acquisitions in clean power assets and a US renewables platform [13] - The private equity business raised $1.6 billion, including $900 million for a special situation strategy [27] - Infrastructure raised $7 billion, including $5 billion for the AI infrastructure fund, marking a strong fundraising quarter [26][27] Market Data and Key Metrics Changes - The company noted a constructive market environment entering 2026, with stabilized interest rates and increased transaction activity [7] - There is a growing demand for real assets that generate stable cash flows, particularly in the context of inflation protection [8][9] Company Strategy and Development Direction - The company aims to double its business by 2030 and achieve a 15% annualized earnings growth [9] - A significant focus is on expanding access to private assets for individual investors through retirement and long-duration savings vehicles [8] - The company is well-positioned to capture opportunities in AI infrastructure, with a $100 billion global AI infrastructure program [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth outlook for 2026, expecting it to be at or above long-term targets due to strong fundraising momentum and a robust pipeline of opportunities [23][41] - The company is prepared for a meaningful expansion of its asset management mandate and anticipates strong earnings growth driven by recent acquisitions [17][31] Other Important Information - The board of directors increased the quarterly dividend by 15% to $0.50025 per share, payable on March 31, 2026 [32] - The company announced a leadership transition, with Conor Teskey appointed as CEO, reflecting a long-term succession plan [10] Q&A Session Summary Question: Is secondaries a strategically important area for the company? - The company tracks the secondaries market closely and sees it as a potential area for future growth, but will be selective in pursuing opportunities [34][35] Question: Can you elaborate on the growth expectations for 2026? - The company expects strong growth in 2026, with initiatives like the acquisition of Oaktree contributing to FRE growth, and a favorable market environment supporting increased deal activity [41] Question: What is the company's exposure to AI-driven disruption? - The company has minimal exposure to software businesses and focuses on long-term contracted real assets, positioning itself to benefit from increased AI penetration [44][46] Question: How is the company managing liquidity and uncalled commitments? - The company maintains over $3 billion in liquidity and views its uncalled capital of approximately $130 billion as a critical component for future growth [49][53] Question: What is the outlook for credit within the portfolio? - Demand for credit remains robust, with strong inflows into well-positioned products, despite some market concerns [72]