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01/10 16:38
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Fee-Related Earnings (FRE) $312 million for the quarter, up 12% year-over-year. This increase was fueled by organic topline growth, with total fee revenue increasing 11% for Q3 and a 13% growth rate year-to-date, representing the fastest pace of growth in the last 3 years.
Distributable Earnings $368 million for Q3, or $0.96 per share. Year-to-date, distributable earnings totaled $1.3 billion, or just over $3 per share, up 10% from last year.
Assets Under Management (AUM) Record $474 billion, up 7% year-to-date. AlpInvest AUM reached $102 billion, up more than 20% year-to-date. Global Credit AUM totaled $208 billion, comprising 45% of firm-wide assets, and has grown at a 33% CAGR over the past 5 years.
Capital Markets and Transaction Fees $32 million for Q3, up almost 20% year-over-year, and have more than doubled over the past 12 months.
Global Wealth Evergreen Vehicles $32 billion of evergreen capital, with $3 billion raised in Q3. The $6 billion raised over the past year reflects a 90% growth rate from the same period last year.
Insurance Solutions Platform $87 billion in AUM, with recent activities including a $4 billion reinsurance agreement with Unum, issuance of a $500 million funding agreement-backed note, and the launch of a reinsurance sidecar focused on Asia.
Global Private Equity Capital Deployment $40 billion of available capital to deploy, with nearly $5 billion of announced exit transactions anticipated to close in the coming quarters. Over the past year, $19 billion was returned to investors, 150% of the industry average.
Carlyle AlpInvest FRE More than 80% year-to-date growth. FRE at AlpInvest now represents 23% of Carlyle's FRE, about triple the level from 2 years prior.
Global Credit Inflows Nearly $10 billion in Q3, with $31 billion in inflows over the last 12 months. The $10 billion asset-backed finance business raised $2 billion in Q3.
Fee-Related Earnings Margins 48% for the quarter and year-to-date, exceeding last year's record of 46%.
Proprietary U.S. economic data: Carlyle released proprietary U.S. economic data derived from its portfolio of nearly 300 operating companies and more than 700,000 employees, providing real-time insights into the economy.
Carlyle AlpInvest Secondaries Fund: Closed its largest-ever secondaries fund of $20 billion, scaling the business further.
GP-led collateralized fund obligation: Closed a $1.25 billion publicly rated, GP-led collateralized fund obligation, the largest of its kind to date.
Credit secondaries continuation vehicle: Completed a $550 million credit secondaries continuation vehicle, reflecting evolution across newer asset classes.
Global Private Equity: Returned $19 billion in capital to investors over the past year, 150% of the industry average. Announced a EUR 7.7 billion carve-out of BASF's coatings business and completed the sale of Calastone and HSO in Europe.
Global Wealth: Achieved $3 billion in inflows, marking the best fundraising quarter in Global Wealth ever. Partnered with Oracle Red Bull Racing to expand private markets partnership in Formula One.
Insurance Solutions: Closed a $4 billion reinsurance agreement with Unum, issued a $500 million funding agreement-backed note, and launched a reinsurance sidecar focused on Asia.
Fee-Related Earnings (FRE): Generated $312 million in Q3, up 12% year-over-year, with year-to-date FRE growth of 16%.
Global Credit: Generated nearly $10 billion of inflows in Q3, with total AUM reaching $208 billion. FRE from Global Credit now represents nearly 1/3 of Carlyle's total.
Evergreen Wealth Products: Raised $3 billion in Q3, with $6 billion raised over the past year, reflecting a 90% growth rate.
Capital Allocation and Compensation Strategy: Overhauled strategy to increase alignment with stakeholders, paying more carry to employees and more fee-related earnings to shareholders.
Debt Issuance: Issued $800 million of 10-year notes at 5%, extending liability duration and leveraging a strong credit rating.
Stock Repurchase: Repurchased over $200 million of stock in Q3, reflecting confidence in Carlyle shares as an attractive investment.
Macro Environment: Complex and resilient macro environment with potential risks from policy shifts and geopolitical tensions. These factors could impact market stability and investor confidence.
Credit Markets: Evolving credit cycle with repricing and idiosyncratic credit events. While no broad systemic risks are evident, the situation requires close monitoring.
Global Private Equity: Dependence on improving transaction environments and successful exits. Any slowdown in these areas could impact capital returns to investors.
Insurance Solutions: Growth in insurance solutions is tied to successful reinsurance agreements and partnerships. Any disruptions in these areas could hinder growth.
Global Wealth: Heavy reliance on scaling evergreen vehicles and partnerships. Any challenges in maintaining growth momentum or partnership effectiveness could impact inflows.
Balance Sheet and Capital Management: Increased debt issuance to fund growth initiatives. Rising interest rates or market volatility could affect the cost of capital and financial flexibility.
Financial Targets for 2025: Carlyle expects to exceed its financial targets for 2025, including full-year FRE growth of approximately 10% (up from the prior outlook of 6%) and full-year inflows of $50 billion (up from the prior outlook of $40 billion).
Economic and Market Outlook: Management views the macroeconomic environment as resilient, with moderated inflation, healthy balance sheets, and strong consumer spending. Credit markets are evolving but not signaling broad stress or systemic risk.
Global Private Equity: Carlyle anticipates a significant step-up in realizations in Q4 2025, with nearly $5 billion of announced exit transactions expected to close in the coming quarters. The company also highlighted a growing transaction pipeline, including a EUR 7.7 billion carve-out of BASF's coatings business.
Carlyle AlpInvest: The AlpInvest platform is expected to continue its strong growth trajectory, with FRE now representing 23% of Carlyle's total FRE. The platform recently closed its largest-ever secondaries fund of $20 billion and is positioned to benefit from strong secular and cyclical tailwinds.
Global Credit: Carlyle's Global Credit platform is projected to grow further, with $20 billion of new AUM expected in the intermediate term from initiatives such as reinsurance agreements and a reinsurance sidecar focused on Asia. The direct lending platform is also expected to capitalize on market opportunities, with a 20% CAGR over the past five years.
Global Wealth: The Global Wealth segment is scaling rapidly, with evergreen vehicles raising $3 billion in Q3 2025. Carlyle anticipates continued growth in this segment, supported by partnerships like the Carlyle AlpInvest CAP solution with UBS, which has already surpassed $1 billion in assets.
Capital Management: Carlyle issued $800 million of 10-year notes at 5% to support growth initiatives and repurchased over $200 million of stock in Q3 2025. The company plans to balance share repurchases with investments to drive future growth.
Dividends and Shareholder Returns: We returned more than $2 billion in capital to shareholders through dividends and repurchases.
Share Repurchase: We also repurchased over $200 million of stock in the quarter, reflecting our conviction that Carlyle shares continue to be an attractive investment.
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 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.
The earnings call indicates strong financial performance, with significant growth in fee-related earnings, distributable earnings, and assets under management. The firm also returned substantial proceeds to investors, suggesting strong investment portfolio performance. Management's positive outlook on growth opportunities, particularly in Japan, and the robust FRE margin support a positive sentiment. Although some concerns were noted in the Q&A, such as vague responses on inorganic growth, the overall performance and optimistic guidance outweigh these, suggesting a likely positive stock price movement.
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