Carlyle(US:CG)2025-10-31 13:30Financial Data and Key Metrics Changes - For Q3 2025, the company reported Fee-Related Earnings (FRE) of $312 million, a 12% increase year-over-year, and year-to-date FRE reached $946 million, up 16% [4][12] - Total assets under management (AUM) reached a record $474 billion, reflecting a 7% increase year-to-date [4] - Distributable earnings for Q3 were $368 million, or $0.96 per share, with year-to-date distributable earnings totaling $1.3 billion, or just over $3 per share, marking a 10% increase from the previous year [12] Business Line Data and Key Metrics Changes - Carlyle Alpha Invest raised $6.3 billion in Q3, bringing year-to-date capital raised to over $15 billion, with AUM at Alpha Invest now at $102 billion, up more than 20% year-to-date [13][14] - Global credit generated nearly $10 billion in inflows during the quarter, totaling $31 billion over the last 12 months, with AUM in global credit now comprising 45% of firm-wide assets [15] - The insurance solutions platform, anchored by a partnership with Fortitude Re, has been active, closing a $4 billion reinsurance agreement and launching a reinsurance sidecar focused on Asia [16] Market Data and Key Metrics Changes - The company noted a 40% year-over-year increase in announced M&A volume and a 60% increase in IPO volumes year-to-date [6] - The credit market remains resilient, with no broad deterioration in credit quality or systemic risk observed [5][6] Company Strategy and Development Direction - The company is focused on exceeding financial targets, with updated guidance for full-year FRE growth of approximately 10% and inflows of $50 billion [4] - The strategy includes significant investments in private markets and retail, with a strong emphasis on partnerships, such as the collaboration with Oracle Red Bull Racing [10][11] - The company aims to leverage its unique operating skill set in industrial corporate carve-outs, with a historical average IRR of 25% [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying health of the global economy, citing steady EBITDA growth and resilient consumer demand [5] - The outlook for inflows remains positive, with strong momentum heading into 2026, particularly in credit and wealth management [26][33] Other Important Information - The company returned $19 billion in capital to investors in global private equity over the past year, significantly exceeding the industry average [7] - The company repurchased over $200 million of stock in the quarter, reflecting confidence in its share value [19] Q&A Session Summary Question: Outlook for inflows by business into year-end and 2026 - Management expressed strong confidence in inflows, highlighting $17 billion in Q3 and a total of $60 billion over the last 12 months, with a revised guidance of $50 billion for the year [26] Question: Key priorities for growth in 2026 - Management noted strong client engagement and strategic execution across all business areas, with a focus on credit, insurance, and wealth management [30][33] Question: Timing of announced transactions and realization pipeline - Management indicated that the realization pipeline is robust, with $5 billion in announced transactions expected to close, including the Medline IPO [39][40] Question: Capital management priorities and stock valuation - Management emphasized a focus on growth investments as the top priority, while also considering share repurchases as an attractive option [45] Question: Diversity of wealth flows and product roadmap - Management highlighted a 10X increase in wealth inflows since the new management team took over, with a strong product roadmap including flagship funds [56][57]