The Carlyle Group Inc. (CG) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A indicate strong financial performance, strategic growth in various segments, and positive future outlooks. Key highlights include exceeding 2025 financial targets, significant transaction pipeline, robust growth in AlpInvest and Global Credit, and strategic capital management. Although management deferred some details to February 26, the overall sentiment is positive, driven by strong metrics and optimistic guidance. The lack of market cap information limits precise impact estimation, but the overall positive sentiment suggests a likely stock price increase in the short term.
Key Financial Performance
Fee-related earnings (FRE) Record $1.24 billion in 2025, up 12% year-over-year. This growth was driven by sustained operating momentum across the firm.
FRE margins Record 47% in 2025, up from 46% last year. This reflects continued operating discipline and the scalability of the model.
Transaction fees Record $225 million, up almost 40% year-over-year. This increase was due to strong investment performance and robust fundraising.
Assets under management (AUM) Record $477 billion, driven by strong investment performance and robust fundraising across the platform.
Distributable earnings (DE) $1.7 billion in 2025, up 11% from the prior year. This was attributed to strong performance across the platform.
Fee revenues Record $2.6 billion for the full year, a 10% organic growth rate. Growth was primarily driven by Carlyle AlpInvest (up 46%) and Global Credit (up 13%).
Inflows $54 billion in 2025, up 32% year-over-year. This was led by Global Credit and Carlyle AlpInvest, which each increased by more than 60%.
Deployment Record $54 billion in 2025, up more than 25% versus last year. Growth was led by a more than 40% increase at Carlyle AlpInvest and nearly 30% growth in global private equity.
Realized proceeds $34 billion in 2025, almost 20% higher year-over-year. This reflects improving exit conditions.
Carlyle AlpInvest FRE Record $274 million for the year, up nearly 60%. Growth was driven by strong institutional and global wealth fundraising and continued scale benefits.
Global Credit FRE Record $402 million for 2025, up 21% from the prior year. This growth was attributed to strong performance and increased activity.
Net accrued carry $656 million for Carlyle AlpInvest, up 21% year-over-year. This was driven by strong appreciation in several of the largest funds.
CLO inflows $7 billion in 2025, up almost 20% from the prior year. Carlyle was the most active CLO manager for U.S. activity.
Evergreen Wealth inflows Record in 2025, more than doubled the prior record set in 2024. This was due to strong demand across the Evergreen suite.
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Operating Highlights
Medline IPO: Raised more than $7 billion in equity valuation of $49 billion, marking the largest sponsor-backed IPO of all time, the largest healthcare IPO ever, and the largest IPO of 2025.
StandardAero IPO: Second largest sponsor-backed U.S. IPO in 2024, appreciated approximately 30% since its public offering.
Orion Breweries and Rigaku IPOs: Rigaku was the largest ever sponsor-backed IPO in Japan.
Hexaware IPO: Largest ever sponsor-backed IPO in India and the largest technology service IPO globally in more than a decade.
Global Wealth Expansion: Record inflows in 2025, almost doubling Evergreen Wealth AUM year-over-year. Soft launched CPAP, a private equity solution for individual investors in the U.S.
Carlyle AlpInvest: Record growth with $14 billion invested and $10 billion returned to investors. Closed largest ever secondary strategy at $20 billion.
Global Credit and Insurance: Direct Lending had a record quarter of originations. Carlyle priced a record 39 CLOs in 2025, with $7 billion in CLO inflows, up almost 20% from the prior year.
Fee-Related Earnings (FRE): Record $1.24 billion in 2025, a 12% organic growth rate. FRE margin reached a record 47%.
Deployment and Realized Proceeds: Deployed a record $54 billion in 2025, up more than 25% versus last year. Realized proceeds totaled $34 billion, almost 20% higher year-over-year.
Segment Performance: Carlyle AlpInvest generated a record $274 million of FRE, up nearly 60%. Global Credit delivered a record $402 million of FRE, up 21%.
Global Wealth and Retirement: Expanded wealth organization by 50% in headcount. Hired a Head of Retirement Solutions to support long-term growth.
Shareholder Update: Announced a shareholder update event in February 2026 to share multiyear financial targets and strategic direction.
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Risk or Challenges
Geopolitical Dynamics: Concerns around shifting geopolitical dynamics were mentioned, which could potentially impact market resilience and investment performance.
Macroeconomic Environment: While the macro environment was described as generally constructive, it remains complex, which could pose challenges for deployment and realization activities.
Regulatory Risks: Forward-looking statements highlighted inherent risks and uncertainties, including regulatory hurdles that could materially impact results.
Market Sentiment: Although market sentiment improved in 2025, any reversal could negatively affect M&A and IPO activities.
Exit Environment: Improving exit conditions were noted, but any deterioration could hinder realization of proceeds and investor returns.
Operational Scalability: While FRE margins expanded, continued scalability and operating discipline are required to sustain growth.
Global Wealth Expansion: Significant investments in global wealth and retirement solutions were made, but these initiatives require sustained growth and execution to deliver long-term value.
Deployment Challenges: Record deployment of $54 billion was achieved, but maintaining this level of activity could be challenging in a complex macro environment.
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Guidance & Outlook
Momentum into 2026: The company enters 2026 with strong momentum, having delivered on its 2025 strategy, including exceeding inflow targets, deploying record capital, and positioning its portfolio for a more functional exit environment.
Multiyear Financial Targets: Carlyle plans to share multiyear financial targets and strategic direction at the 2026 shareholder update in February.
Global Wealth Expansion: The company continues to invest in global wealth, including mass affluent retail and retirement, with a 50% increase in headcount and the addition of specialized capabilities. Carlyle sees wealth and retirement as long-term growth engines.
Capital Deployment and Fundraising: With $88 billion of available capital, Carlyle is well-positioned to continue deploying capital across its business. The company expects continued growth in fundraising, supported by a diversified pipeline and expansion in global wealth.
Improving Capital Markets Conditions: The company anticipates improving capital markets conditions, which are expected to support deployment and realization activity in 2026.
Global Credit and Insurance Growth: Carlyle expects continued growth in Global Credit and Insurance, supported by strong momentum, record direct lending originations, and leadership in CLO issuance.
Carlyle AlpInvest Growth: Carlyle AlpInvest remains well-positioned for further growth, with strong institutional and global wealth fundraising and continued scale benefits across the platform.
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Shareholder Return Plan
Dividends: Carlyle returned a record $1.2 billion of capital to shareholders in 2025, which included dividends.
Share Buybacks: Carlyle returned a record $1.2 billion of capital to shareholders in 2025, which included share buybacks.
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Key Q&A
Q:How is Carlyle thinking about sustainability in monetization momentum into 2026, and how dependent are they on equity market exits versus M&A transactions?
A:Harvey Schwartz stated that while the markets have shown some fragility and volatility, the economic engine feels strong based on proprietary data from their portfolio. He emphasized that credit spreads have moved slightly, and there is some hesitation in the market, but overall, the portfolio data indicates good GDP growth, margins, and EBITDA generation. Carlyle is prepared to navigate the market environment.
Q:What is Carlyle's perspective on the direct lending and credit world, and how does this inform their strategy for growing the credit platform?
A:Harvey Schwartz and Justin Plouffe highlighted that Carlyle has been systematic and thoughtful in building their credit business, positioning for opportunities in the direct lending space. They have added a new head of direct lending and expanded origination efforts. Carlyle's credit business is diversified and built to perform well through cycles, with significant inflows into credit wealth funds in the last quarter.
Q:What is Carlyle's exposure to software investments as a percentage of AUM, and how significant is it to their business?
A:Justin Plouffe stated that software investing accounts for 6% of Carlyle's total AUM, which is below other firms. He emphasized that software is not a major driver of Carlyle's business, with their focus being on sectors like aerospace, defense, healthcare, and industrials.
Q:What are Carlyle's expectations for margin expansion in 2026, and which segments are expected to drive growth?
A:Harvey Schwartz mentioned that more details would be provided on February 26. He noted that Carlyle has achieved significant margin improvements over the past three years, with a 1,000 basis point increase since he joined. The team has invested in the business, grown headcount, and repositioned the platform.
Q:What is Carlyle's outlook on capital raising, particularly for Fund 9, and their capital priorities for the new year?
A:Harvey Schwartz highlighted the diversification of Carlyle's business mix across institutional clients, geographies, and opportunities. He noted the success of raising $54 billion last year and emphasized that Carlyle is well-positioned for future fundraising. More details will be shared on February 26.
Q:What is Carlyle's exposure to software in their CLOs, and how might recent volatility impact over-collateralization tests?
A:Justin Plouffe stated that Carlyle's CLO performance is among the best in the industry, with software exposure aligned with the index. He does not expect recent volatility to affect over-collateralization tests and noted that the CLO business is well-positioned to weather market conditions.
Q:Were there negative catch-up fees in AlpInvest this quarter?
A:No, there were no negative catch-up fees this quarter. AlpInvest management fees were up 4% quarter-over-quarter, indicating good momentum.
Q:What is Carlyle's outlook for transaction fees and potential revenue upside?
A:Harvey Schwartz noted that transaction fees have grown significantly over the past three years, demonstrating the agility of Carlyle's platform. He acknowledged that there are still some gaps in the business, but there is potential for further growth. More details will be provided on February 26.
Q:What is Carlyle's strategy for the wealth channel, and what is resonating with distribution partners and clients?
A:Harvey Schwartz emphasized Carlyle's global brand, long history, and commitment to geographic diversification. He highlighted the importance of performance, client engagement, and providing diversified solutions. Carlyle has made significant investments in resources and partnerships, such as the Oracle Redwall partnership, to enhance their presence in the wealth channel.
Q:What are Carlyle's expectations for management fee growth and realizations in 2026?
A:Harvey Schwartz deferred detailed answers to February 26 but noted that Carlyle has strategically positioned their platform for monetizations. He expressed pride in the team's deliberate efforts to take advantage of attractive market environments.
Q:What is Carlyle's outlook for the CLO market in 2026, and how does software and AI impact the business?
A:Harvey Schwartz and Justin Plouffe stated that the CLO business has had a strong two years, with significant activity in issuing and resetting deals. While 2026 may not be a record year, Carlyle's team is well-positioned to participate in the market. They do not expect software and AI concerns to significantly impact the CLO business.
Q:What steps is Carlyle taking to enhance originations and expand the sourcing funnel in their credit business?
A:Justin Plouffe highlighted recent hires, including Alex G and Mike Mayer, to strengthen the origination team. Carlyle achieved nearly $30 billion in originations in 2025, the highest ever, and continues to build a broad-based, durable credit business. Harvey Schwartz noted that most resource build-out is complete, but unique strategic levers remain to be discussed on February 26.
Q:Review of Unclear Management Responses
A:Management avoided providing direct answers to several forward-looking questions, deferring detailed responses to February 26. These include expectations for margin expansion in 2026, management fee growth, realizations, and specific strategies for the credit and CLO businesses. Responses often emphasized past achievements or general positioning without offering concrete details or projections.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AUM Demand
AlpInvest
CLOs
CPAP
Direct Lending
Evergreen
Global Wealth
Japan
Lending origination
Medline
Rigaku
activity
breadth
business
capital investor
credit
decade
environment
equity
example
fee record
fund
issuance
level
market
momentum
offering
platform
portfolio
position
retirement
sector
solution investor
sponsor IPO
strategy
team
technology
transaction
type
wealth
CG Transcript
The Carlyle Group Inc. (CG) Q4 2025 Earnings Call Transcript
Positive2-6
The earnings call summary and Q&A indicate strong financial performance, strategic growth in various segments, and positive future outlooks. Key highlights include exceeding 2025 financial targets, significant transaction pipeline, robust growth in AlpInvest and Global Credit, and strategic capital management. Although management deferred some details to February 26, the overall sentiment is positive, driven by strong metrics and optimistic guidance. The lack of market cap information limits precise impact estimation, but the overall positive sentiment suggests a likely stock price increase in the short term.
The Carlyle Group Inc. (CG) Presents at Goldman Sachs 2025 U.S. Financial Services Conference Transcript
Neutral12-9
The Carlyle Group Inc. (CG) Q3 2025 Earnings Call Transcript
Positive10-31
The company demonstrated strong financial performance with increased FRE growth expectations and significant inflows, especially in Global Credit and Real Estate. The Q&A highlighted confidence in sustained growth across various sectors, including private equity, credit, and wealth channels. Despite some lack of detail in management's responses, the overall sentiment remains positive, driven by strong inflows and optimistic guidance. The absence of negative indicators and the potential for further growth support a strong positive outlook for the stock price.
The Carlyle Group, Inc. (CG) Q2 2025 Earnings Call Transcript
Positive8-6
The earnings call summary indicates strong financial performance with record FRE, AUM, and transaction fees, alongside optimistic guidance and strategic growth initiatives. The Q&A section supports this sentiment, highlighting growth in private credit, wealth management, and insurance sectors. Despite some uncertainty in long-term guidance, the firm's strategic positioning and strong results suggest a positive outlook for the stock price in the near term.
CG Slides
Carlyle Q4 and FY 2025 slides reveal record earnings, 11% growth in fee-earning AUM2026-02-06
Carlyle Q3 2025 slides: Fee-related earnings grow as AUM reaches $474 billion2025-10-31
Carlyle Q2 2025 slides: distributable earnings surge 26%, AUM reaches $465B2025-08-06
Carlyle Q1 2025 slides: Record fee-related earnings amid diversified growth2025-05-08
CG Report
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