Carlyle(CG) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported record fee-related earnings (FRE) of $311 million, up 17$455 million, marking a record start to the year [18] - Assets under management (AUM) increased to $453 billion, up 6$50 billion of inflows over the past year [19][20] Business Line Data and Key Metrics Changes - Carlyle AlpInvest generated record FRE in the first quarter, nearly double from the same period last year, with AUM growing 12% to a record $89 billion [11] - Global Credit saw quarterly fee-related earnings surpassing$100 million for the first time, an increase of nearly 50% from last year [12] - Global Private Equity results were in line with expectations, with significant capital returned to investors, totaling nearly $8 billion over the past year [23] Market Data and Key Metrics Changes - The company noted strong momentum in private credit solutions, particularly in European lending, where deployment increased by 150$84 billion of dry powder available [8] - Carlyle is focusing on diversifying its business lines and leveraging its global brand to drive growth, particularly in wealth management and private equity [14][55] - The strategic initiative to grow capital markets is accelerating, with a record 150 million in fees generated over the past six months [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macro environment, noting that while there are uncertainties, the long-term trends driving demand for private capital remain strong [9][19] - The impact of recent trade policies on investor sentiment and risk appetite was discussed, with management indicating that the majority of their portfolio is U.S.-based and less affected by tariffs [6][7] Other Important Information - The company has seen a doubling of evergreen inflows over the past year, indicating strong performance in its global wealth strategy [14] - Carlyle's diversified platform allows it to mobilize resources effectively during periods of market volatility [16] Q&A Session Summary Question: Impact of trade policy and tariffs on investment activity - Management noted that while there is a cautious approach among investors, there remains a willingness to deploy capital as long as policy implementation progresses positively [30][32] Question: Future of private equity franchise and fundraising - Management indicated no major adjustments to the timing of Fund IX, with a focus on performance and deployment in Fund VIII [36][91] Question: Insurance wins and fundraising guidance - The 40 billion flow guidance includes the recent insurance transactions, with strong performance in wealth products noted [45][96] Question: Endowment sector stress and its implications - Management does not foresee a significant decline in allocations to private capital from endowments, viewing potential opportunities for capital deployment [61][62] Question: Strategic alternatives in the insurance space - Management expressed a preference for organic growth but remains open to accretive acquisitions if they make sense [68][72] Question: Opportunities in Japan - The company highlighted a strong position in Japan, with expectations for continued growth in the market due to evolving corporate stewardship and asset management capabilities [76][78]