Carlyle Group’s Earnings Call Highlights Robust Growth

The Carlyle Group Lp ((CG)) has held its Q3 earnings call. Read on for the main highlights of the call.

The Carlyle Group’s recent earnings call showcased a robust performance across several key financial metrics, underscoring a positive sentiment for the company’s future. Despite facing some challenges, such as lighter realizations and public market volatility, the firm expressed confidence in its growth trajectory as it moves towards 2026.

Strong Fee-Related Earnings (FRE) Growth

The Carlyle Group reported a significant increase in Fee-Related Earnings (FRE), delivering $312 million in the third quarter alone. This contributed to a year-to-date total of $946 million, marking a 16% increase. The company is optimistic about surpassing its financial targets for the year, projecting a full-year FRE growth of approximately 10%.

Record Assets Under Management (AUM)

The firm achieved a record $474 billion in Assets Under Management (AUM), reflecting a 7% increase year-to-date. This growth was driven by organic inflows of $17 billion in the quarter and nearly $60 billion over the past 12 months.

Successful Capital Returns and Transactions

Over the past year, Carlyle returned $19 billion in capital to investors in global private equity, significantly outperforming the industry average. Noteworthy transactions included the EUR 7.7 billion carve-out of BASF’s coatings business and the successful IPO of Orion Breweries in Japan.

Growth in Carlyle AlpInvest

Carlyle AlpInvest demonstrated remarkable growth, with FRE increasing by more than 80% year-to-date. The company closed its largest-ever secondaries fund at $20 billion and completed a $1.25 billion publicly rated, GP-led collateralized fund obligation.

Strong Performance in Global Credit

The Global Credit platform generated nearly $10 billion of inflows in the quarter, with a total AUM of $208 billion. This platform’s FRE now represents nearly one-third of Carlyle’s total.

Momentum in Global Wealth

Carlyle achieved its best fundraising quarter in Global Wealth, with $3 billion of inflows, reflecting a 90% growth rate over the past year.

Lighter Realizations in Q3

The third quarter saw lighter realizations, but a significant increase is expected in Q4. Nearly $5 billion of announced exit transactions are anticipated to close in the coming quarters.

Public Market Volatility Impact

Public market volatility affected private equity performance during the quarter, attributed to market fluctuations rather than impaired stories. This volatility impacted specific investments, highlighting the challenges of navigating public market dynamics.

Forward-Looking Guidance

Carlyle’s forward-looking guidance remains strong, with updated financial targets projecting a full-year FRE growth of approximately 10%, up from a previous outlook of 6%. The firm also anticipates full-year inflows of $50 billion, compared to a prior outlook of $40 billion. Distributable earnings for the quarter were $368 million, or $0.96 per share, contributing to a year-to-date total of $1.3 billion, or just over $3 per share, up 10% from the previous year.

In summary, The Carlyle Group’s earnings call highlighted a strong performance across several key metrics, with positive sentiment about its growth prospects. The company’s achievements in FRE growth, record AUM, and successful capital returns underscore its strategic prowess and resilience in navigating market challenges.