Financial Data and Key Metrics Changes - For Q3 2025, the company reported fee-related earnings, adjusted EBITDA, and adjusted net income increased by 18%, 16%, and 18% respectively compared to Q3 2024 [4] - The fee-related earnings margin for the quarter was 45%, approximately 350 basis points higher than Q3 2024 [4] - The company ended the quarter with a record $87 billion in assets under management, a 9% increase from Q3 2024 [4][18] Business Line Data and Key Metrics Changes - Absolute Return Strategies (ARS) generated a gross rate of return of 14.2% over the last 12 months, with ARS management fees growing 6% year-over-year [5][18] - Private markets management fees increased by 10% year-to-date and 7% year-over-year, driven by solid fundraising and conversion of contracted AUM [18] - The gross unrealized carried interest balance reached an all-time high of $941 million, up 4% from Q2 2025 [6][20] Market Data and Key Metrics Changes - Year-to-date fundraising reached $7.2 billion, surpassing the total for the full year of 2024, with infrastructure and credit leading the growth [5][12] - Insurance clients accounted for approximately 14% of capital raised over the last 12 months and 40% of Q3 capital raised [13] Company Strategy and Development Direction - The company aims to double its 2023 fee-related earnings to over $280 million by 2028 and increase adjusted net income per share to over $1.20 by 2028 [10][22] - The company is focused on expanding its investment strategies across private equity, infrastructure, credit, real estate, and absolute return, with a scalable investment platform [9][10] - The company is actively managing its share buyback program, with $86 million remaining in authorization [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to compound value for shareholders over the long term, citing strong fundraising momentum and investment performance [11][22] - The outlook for ARS is increasingly encouraging, with a strong pipeline and improved investor interest [13][31] Other Important Information - The company announced an increase in its quarterly dividend to $0.12 per share, reflecting confidence in its growth trajectory [10][21] - The company hosted its 2025 Investor Day, highlighting its central role in the alternatives ecosystem and its client-first culture [8][10] Q&A Session Summary Question: Are there ongoing fees for the CFO product? - The CFO is a regular recurring management fee with some carry building over time, and the company will start to enjoy management fees from that pool of capital next quarter [24][26] Question: Why isn't the improvement in ARS reflected in net flows? - Management noted that while interest levels are higher, they are maintaining their flat net flows budgeting assumption for Q4, which is typically a seasonally weaker quarter [27][31] Question: What drives the strong realization outlook in Q3? - The seasonality of Q3 is related to when tax carry is paid in the industry, and the company has a diversified carry across many lines, making it difficult to predict timing [34][37] Question: How is the company managing stock-based compensation and share count? - The company expects stock-based compensation to remain stable, with less than 3% dilution over the last five years, actively managing dilution through buybacks [39][41] Question: What is the current status of the retail business and AUM? - The individual investor channel currently has about $4 billion in AUM, with significant growth in partnerships and separately managed accounts [44][46] Question: Are there concerns in the private credit landscape? - Management indicated that they are not seeing a slowdown in private credit and believe the asset class will continue to grow despite some high-profile credit issues [52][56]

Financial Data and Key Metrics Changes - For the second quarter of 2025, the company reported a 6% increase in fee-related earnings, a 99% increase in adjusted EBITDA, and a 19% increase in adjusted net income compared to 2024 [6][7] - Year-to-date fee-related earnings, adjusted EBITDA, and adjusted net income were up 14%, 17%, and 19% respectively compared to 2024 [6] - The fee-related earnings margin for the quarter was 42%, which is 200 basis points higher than the second quarter of last year [6] Business Line Data and Key Metrics Changes - The infrastructure segment accounted for $1,900,000,000 of fundraising in the first half of the year, contributing significantly to growth [8] - Private credit was the highest contributor to fundraising for the quarter, with expectations of increased diversification in private credit allocations [9] - Absolute return strategies (ARS) had a strong quarter with a multi-strategy composite returning approximately 6% on a gross basis, leading to a 7% increase in fee-paying AUM year-to-date [10][11] Market Data and Key Metrics Changes - Total assets under management (AUM) reached $86,000,000,000, a 5% increase compared to the end of 2024 [7] - Fundraising for the first half of the year totaled $5,300,000,000, a 52% increase from 2024, marking the highest first half fundraising total on record [7] Company Strategy and Development Direction - The company is focused on building out its individual investor channel and has made progress with its distribution joint venture, Grove Lane [11] - The company is also in the market with a structured alternative investment solution, indicating a strategic move towards innovative investment products [12] - AI is a key strategic focus, with increasing adoption expected to enhance efficiency and profitability [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the macro environment, noting strong demand for alternative investments and improved clarity around tax policy [13] - The company remains cautious due to ongoing volatility around interest rates and tariffs, but is well-positioned with $12,000,000,000 of dry powder for investment opportunities [14] - The firm aims to double its fee-related earnings by 2028, reflecting confidence in long-term growth prospects [30] Other Important Information - The company announced plans for its first Investor Day on October 15 in New York, aiming to showcase its growth profile and value proposition [15] - The firm has a strong financial position with robust cash generation and growing unrealized carried interest, which surpassed $900,000,000 this quarter [14][30] Q&A Session Summary Question: Retail uptake on the Evergreen retail vehicle and status on the private equity vehicle - Management indicated that the infrastructure interval fund is generating modest sales and is optimistic about the future of this channel, emphasizing a multiyear build [33][34] - Regarding private equity, management aims to develop their own product similar to infrastructure, with ongoing efforts to communicate progress [37] Question: Performance of absolute return business and fee rate influences - Management noted that while internal forecasts remain unchanged, improved performance has positively impacted the pipeline for ARS [42] - The fee rate has seen slight fluctuations due to idiosyncratic factors, but overall demand remains stable [44][46] Question: Re-ups in a volatile environment - Management reported strong re-ups and client tenure, with expectations for improved fundraising in 2025 compared to 2024 [51][54] Question: Fee pressures in private markets - Management stated that fee conversations have been constructive, with no significant pressures observed [56] Question: Differentiated origination capabilities in infrastructure - Management highlighted the flexible investment model that allows for diverse capital deployment, enhancing deal flow and client solutions [62][66] Question: AI opportunities and modeling - Management emphasized the integration of AI across various functions to improve efficiency and decision-making, with ongoing discussions on best practices [72][76]