Q1 2025 Carlyle Group Inc Earnings Call

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I would now like to hand, the conference over to your Speaker today, Daniel Harris head of Investor Relations. Please go ahead.

Thank you Danielle good morning, and welcome to Carlyle's first quarter 2025 earnings call with me on the call. This morning is our Chief Executive Officer, Harvey Schwartz, and our Chief Financial Officer, and head of corporate strategy genre that.

Earlier. This morning, we issued a press release and a detailed earnings presentation, which is available on our Investor Relations website.

This call is being webcast and a replay will be available.

We will refer to certain non-GAAP financial measures during today's call. These measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. We have provided reconciliation of these measures to GAAP in our earnings release to the extent reasonably available.

Any forward looking statements made today do not guarantee future performance and undue reliance should not be placed on them.

These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the risk factors section of our annual report on Form 10-K that could cause actual results to differ materially from those indicated Carlyle assumes no obligation to update any forward looking statements at any time.

Speaker Change: In order to ensure participation by all those on the line. Please limit yourself to one question and return to the queue for any additional follow ups and with that let me turn the call over to our Chief Executive Officer Harvey Schwartz.

Harvey Schwartz: Thanks, Dan and good morning, everyone and thank you for joining us all.

Harvey Schwartz: Ill quickly touch on this quarter's record results and then share my perspective on the macro environment.

Harvey Schwartz: First quarter performance was quite strong hitting record levels.

Harvey Schwartz: The quarter's highlights include record fee related earnings of $311 million, that's up 17% year over year record FRE margin, 48%.

Harvey Schwartz: Our highest level of distributable earnings in several years at $455 million and record assets under management of 453 billion.

Harvey Schwartz: Across the board for margin expansion FRE growth.

Harvey Schwartz: The investment performance and fundraising you can really see the strategy coming together as we progress towards our goals for this year and beyond.

Harvey Schwartz: Now, let me shift and talk about how we're thinking about the current environment.

Harvey Schwartz: We ended the year with a very high level of market optimism and very high expectations.

Harvey Schwartz: Markets were fully risk on.

Operator: At this time, all participants are in a listen-only After the speaker's presentation, there will be a question and answer.

Year over year record FRE margin, 48%.

Harvey Schwartz: Of course, as we saw the recently announced trade policies very quickly impacted investor sentiment and risk appetite.

Our highest level of distributable earnings in several years at $455 million and record assets under management of 453 billion.

Operator: So ask a question during the session. You will need to press star 1-1 on your telephone. We'll then hear an automated message advising your hand... After all your questions, please press star 1 1 again.

Harvey Schwartz: With respect to our global portfolio, we think about this in terms of first order effects and knock on impacts.

Across the board for margin expansion FRE growth to investment performance and fundraising you can really see the strategy coming together as we progress towards our goals for this year and beyond.

Harvey Schwartz: Aspect of first order effects.

Harvey Schwartz: The effects of the tariffs are contained to a limited number of investments.

Operator: Please be advised that today's conference is being.

Harvey Schwartz: The majority of our global private equity portfolio is services oriented with 80% of companies based in the U S.

Daniel Harris: I would now like to hand the conference over to your speaker today, Daniel Harris, head of investor relations. Please go ahead.

Harvey Schwartz: Second order effects on the economy are beginning to emerge.

Now, let me shift and talk about how we're thinking about the current environment.

Harvey Schwartz: As we've seen in some of the recent economic data, but given where we are in terms of the policy implementation. The long term effects of the trade policy or too difficult to forecast at this point.

Harvey Schwartz: Good morning and welcome to Carlyle's first quarter 2025 earnings call. With me on the call this morning is our Chief Executive Officer, Harvey Schwartz, and our Chief Financial Officer and Head of Corporate Strategy, John Redett.

We ended the year with a very high level of market optimism and very high expectations.

Markets were fully risk on.

Harvey Schwartz: From a carve out perspective, we are exceptionally well positioned to lead in this environment.

Of course, as we saw the recently announced trade policies very quickly impacted investor sentiment and risk appetite.

Harvey Schwartz: Earlier this morning, we issued a press release and a detailed earnings presentation, which is available on our investor relations website.

Harvey Schwartz: Our investment horizon, and our capital base, our long term and our capital light model affords us the ability to capitalize on compelling new investment opportunities.

With respect to our global portfolio, we think about this in terms of first order effects and knock on impacts.

Harvey Schwartz: This call is being webcast and a replay will be available. We will refer to certain non-GAAP financial measures during today's call. These measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles.

Expect a first order effects.

Harvey Schwartz: In a dynamic environment like today.

The effects of the tariffs are contained to eliminate a number of investments the majority.

Speaker Change: You'd experience scale.

Our global private equity portfolio is services oriented with 80% of companies based in the U S.

Speaker Change: Rand and a diversified platform to meet the shifting demands of private capital and serve the needs of our clients.

Harvey Schwartz: We have provided reconciliation of these measures to GAAP in our earnings release to the extent reasonably available.

Second order effects on the economy are beginning to emerge.

Speaker Change: With $84 billion of dry powder, we are well positioned to be active in this market environment as opportunities emerge.

Harvey Schwartz: Any forward-looking statements made today do not guarantee future performance, and undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the risk factor section of our annual report on Form 10-K that could cause actual results to differ materially from those indicated.

As we've seen in some of the recent economic data, but given where we are in terms of the policy implementation. The long term effects of the trade policy or too difficult to forecast at this point.

Speaker Change: Although we are going through this period of uncertainty the macro trends driving demand for private capital remains strong and likely will be reinforced over the coming years.

From our Carlisle perspective, we're exceptionally well positioned to lead in this environment.

Our investment horizon, and our capital base, our long term and our capital light model affords us the ability to capitalize on compelling new investment opportunities.

Speaker Change: Over the past two decades, the number of public companies in the U S has been cut nearly in half while the number of private companies has increased by more than fivefold.

Harvey Schwartz: Carlyle assumes no obligation to update any forward-looking statements at any time.

Operator: In order to ensure participation by all those on the line, please limit yourself to one question and return to the queue for any additional follow-ups.

In a dynamic environment like today.

Speaker Change: For investors looking to drive returns and capture the next generation of market growth.

Did experience scale.

Harvey Schwartz: And with that, let me turn the call over to our Chief Executive Officer, Harvey Schwartz. Thanks, Dan. Good morning, everyone, and thank you for joining us. I'll quickly touch on this quarter's record results and then share my perspective on the macro environment. First quarter performance was quite strong, hitting record levels. Quarters highlights include record fee-related earnings of $311 million, that's up 17% year-over-year, record FRE margin, 48%. our highest level of distributable earnings in several years at $455 million and record assets under management of $453 billion. Across the board, from margin expansion, to FRE growth, to investment performance, and fundraising, you can really see the strategy coming together as we progress towards our goals for this year and beyond.

Speaker Change: Private market access has never been more important.

Rand and a diversified platform to meet the shifting demands of private capital and serve the needs of our clients.

Speaker Change: These structural shifts are already showing up in carlyle's results.

Speaker Change: We are seeing strong momentum across our key growth areas and believe the trends reshaping global markets will continue to play to our strengths.

With $84 billion of dry powder, we are well positioned to be active in this market environment as opportunities emerge.

Speaker Change: Now I'll touch on our businesses and growth areas that we've been focused on over the past two years.

Although we are going through this period of uncertainty the macro trends driving demand for private capital remained strong and likely will be reinforced over the coming years.

Speaker Change: Carlisle App less generated record FRE in the first quarter nearly double the first quarter last year.

Over the past two decades, the number of public companies in the U S has been cut nearly in half while the number of private companies has increased by more than fivefold.

Speaker Change: AUM in this business grew 12% over the past year to a record 89 billion.

Speaker Change: The business continues to diversify across client solutions. A good example of this is our latest portfolio finance funds, which held its final close last month at more than $4 billion more than three times the size of its predecessor.

For investors looking to drive returns and capture the next generation of market growth private market access has never been more important.

Speaker Change: These structural shifts are already showing up in carlyle's results.

Speaker Change: We're seeing strong momentum across our key growth areas and believe the trends reshaping global markets will continue to play to our strengths.

Speaker Change: In global credit quarterly fee related earnings surpassed 100 million for the first time, an increase of nearly 50% from last year.

Harvey Schwartz: Now, let me shift and talk about how we're thinking about the current environment. We entered the year with a very high level of market optimism and very high expectations. markets were fully risk on. Of course, as we saw, the recently announced trade policies very quickly impacted investor sentiment and risk appetite. With respect to our global portfolio, we think about this in terms of first-order effects and knock-on impact. The effects of the tariffs are contained to a limited number of investors. The majority of our global private equity portfolio is services oriented with 80% of companies based in the U.S.

Speaker Change: Now I'll touch on our businesses and growth areas that we've been focused on over the past two years.

Speaker Change: The significant demand for private credit solutions continues to drive inflows in our investment opportunities continue to expand.

Speaker Change: Carlisle App less generated record FRE in the first quarter nearly double the first quarter last year.

Speaker Change: Recently, our private credit team has leaned into significant opportunities in European lending with less competition is leading to strong relative value.

Speaker Change: AUM in this business grew 12% over the past year to a record 89 billion.

Speaker Change: Premium private credit deployment is up 150% year over year.

Speaker Change: The business continues to diversify across client solutions. A good example of this is our latest portfolio finance funds, which held its final close last month and more than $4 billion.

Speaker Change: We also had a strong start to the year in insurance with fortitude announcing more than 8 billion in reinsurance transactions.

Speaker Change: More than three times the size of its predecessor.

Speaker Change: Fortitude annuity reinsurance agreement tire life insurance company was there six transaction in Japan.

Speaker Change: In global credit quarterly fee related earnings surpassed 100 million for the first time, an increase of nearly 50% from last year.

Harvey Schwartz: Second order effects on the economy are beginning to emerge. As we've seen in some of the recent economic data, but given where we are in terms of a policy implementation, the long-term effects of the trade policy are too difficult to forecast at this point.

Speaker Change: Carlyle's long term track record.

Speaker Change: Regarding Japan alongside strong investment origination capabilities have helped forward or to develop a leading presence in the market.

Speaker Change: The significant demand for private credit solutions continues to drive inflows in our investment opportunities continue to expand.

Speaker Change: Our pipeline of growth opportunities remains healthy as insurance companies seek to transfer risk and improve capital efficiency.

Harvey Schwartz: From a Carlyle perspective, we are exceptionally well-positioned to lead in this environment. Our investment horizon and our capital base are long term, and our capital light model affords us the ability to capitalize on compelling new investment opportunities. in a dynamic environment like today.

Speaker Change: Recently, our private credit team has leaned into significant opportunities in European lending.

Speaker Change: And our strategic initiatives to grow capital markets continues to accelerate.

Speaker Change: With less competition is leading to strong relative value.

Speaker Change: Private credit deployment is up 150% year over year.

Speaker Change: Over just the past six months, we generated a record $150 million in fees.

Speaker Change: We also had a strong start to the year in insurance with fortitude announcing more than $8 billion in reinsurance transactions.

Speaker Change: We see substantial opportunity for long term growth in this business, although the near term market environment may slow the pace of activity.

Harvey Schwartz: and Ed Experian. scale, brand, and a diversified platform to meet the shifting demands of private capital and serve the needs of our clients. With $84 billion of dry powder, we are well positioned to be active in this market environment as opportunities emerge. Although we are going through this period of uncertainty, the macro trends driving demand for private capital remain strong and likely will be reinforced over the coming year.

Speaker Change: Fortitude annuity reinsurance agreement tire life insurance company was there six transaction in Japan.

Speaker Change: Moving on to global wealth as you know two years ago, we prioritize this initiative by aggressively adding to the team and leveraging our global brand to drive growth.

Speaker Change: Carlyle's long term track record track record in Japan, alongside strong investment origination capabilities have helped forward it to develop a leading presence in the market.

Speaker Change: As a result, evergreen inflows have doubled over the past year.

Speaker Change: Our pipeline of growth opportunities remains healthy as insurance companies seek to transfer risk and improve capital efficiency.

Speaker Change: In global private equity, we remain focused on driving value in our portfolio of companies and monetizing assets.

Speaker Change: And our strategic initiatives to grow capital markets continues to accelerate.

Harvey Schwartz: Over the past two decades, the number of public companies in the U.S. has been cut nearly in half, while the number of private companies has increased by more than fivefold. For investors looking to drive returns and capture the next generation of market growth, private market access has never been more important. These structural shifts are already showing up in Carlyle's results. We are seeing strong momentum across our key growth areas and believe the trends reshaping global markets will continue to play to our strength.

Speaker Change: We've generated $20 billion of realizations over the last 12 months.

Speaker Change: Over just the past six months, we generated a record $150 million in fees.

Speaker Change: In the first quarter, we successfully IPO <unk> technologies in India.

Speaker Change: We see substantial opportunity for long term growth in this business, although the near term market environment may slow the pace of activity.

Speaker Change: This was the largest ever sponsor backed IPO in India, and the largest technology services IPO globally and more than a decade.

Speaker Change: Moving on to global wealth as you know two years ago, we prioritize this initiative by aggressively adding to the team and leveraging our global brand to drive growth.

Speaker Change: We also closed on nearly $1 billion secondary sale of shares of standard Arrow and a $1 4 billion cell power assets.

Speaker Change: John will touch on this in more detail.

Speaker Change: As a result, evergreen inflows have doubled over the past year.

Harvey Schwartz: Now I'll touch on our businesses and growth areas that we've been focused on over the past two years. Carlyle Alpinest generated record FRE in the first quarter, nearly double the first quarter last year. AUM in this business grew 12% over the past year to a record $89 billion. The business continues to diversify across client solutions.

Speaker Change: We saw continued appreciation in our latest vintage U S buyout funds in the underlying portfolio companies continue to grow EBITDA at double digit rates through the first quarter.

Speaker Change: In global private equity, we remain focused on driving value in our portfolio of companies and monetizing assets.

Speaker Change: We've generated $20 billion of realizations over the last 12 months.

Speaker Change: The portfolio remains well positioned in the current environment.

Speaker Change: Hello, close Carlyle is much more diversified today than it has ever been.

Speaker Change: In the first quarter, we successfully IPO X where technologies in India.

Speaker Change: During these periods of market volatility breath of our platform enables us to mobilize where opportunities present the present itself.

Speaker Change: This was the largest ever sponsor backed IPO in India, and the largest technology services IPO globally and more than a decade.

Harvey Schwartz: A good example of this is our latest portfolio finance fund, which held its final close last month at more than $4 billion, more than three times the size of its predecessor. In global credit, quarterly fee-related earnings surpassed $100 million for the first time, an increase of nearly 50% from last year. The significant demand for private credit solutions continues to drive inflows and our investment opportunities continue to expand. Recently, our private credit team has leaned into significant opportunities in European lending, where less competition is leading to strong relative value. European private credit deployment is up 150% year-over-year.

Speaker Change: We will continue to invest in our growth leverage our long term investment horizon and capture value creation opportunities in the private markets.

Speaker Change: We also closed a nearly $1 billion secondary sale of shares of standard Arrow and a $1 4 billion cell bio asset.

John: With that let me now turn the call over to John who will walk through our results in more detail.

Speaker Change: John will touch on this in more detail.

Speaker Change: We saw continued appreciation in our latest vintage U S buyout funds and the underlying portfolio of companies continue to grow EBITDA at double digit rates through the first quarter.

John: Thanks Harvey.

John: Morning, everyone.

John: As Harvey said, our first quarter results were strong we delivered record FRE.

John: FRE margin and assets under management.

Speaker Change: The portfolio remains well positioned in the current environment.

John: Day of $455 million was a record start to the year.

Speaker Change: Hello, close Carlyle is much more diversified today than it has ever been.

John: As a management team we are focused on accelerating long term growth.

Speaker Change: During these periods of market volatility breath of our platform enables us to mobilize where opportunities present the present itself.

Harvey Schwartz: We also had a strong start to the year in insurance, with Fortitude announcing more than $8 billion in reinsurance transactions. Fortitude's annuity reinsurance agreement with Tile Life Insurance Company was their sixth transaction in Japan. Carlyle's long-term track record in Japan alongside strong investment origination capabilities have helped Ford to develop a leading presence in the market. Our pipeline of growth opportunities remains healthy, as insurance companies seek to transfer risk and improve capital. and our strategic initiative to grow capital markets continues to accelerate.

John: While also achieving our near term goals.

John: We remain comfortable with our ability to meet our 2025 financial targets.

Speaker Change: We will continue to invest in our growth leverage our long term investment horizon and capture value creation opportunities in the private markets.

John: But realize the situation is fluid.

John: And the market backdrop is uncertain.

Speaker Change: With that let me now turn the call over to John who will walk through our results in more detail.

John: We continue to invest in our businesses to better position Carlyle for long term success.

John: Thanks Harvey.

John: Morning, everyone.

John: We finished the first quarter with 453 billion of AUM.

Speaker Change: As Harvey said, our first quarter results were strong we delivered record FRE.

John: Up 6% year over year.

Speaker Change: FRE margin and assets under management.

John: Growth was driven by $50 billion of inflows over the past year.

Speaker Change: Day of $455 million was a record start to the year.

John: Including $14 billion in the first quarter alone.

Harvey Schwartz: Over just the past six months, we generated a record $150 million in fees. We see substantial opportunity for long-term growth in this business, although the near-term market environment may slow the pace of activity.

Speaker Change: As a management team, we're focused on accelerating long term growth.

John: We generated record FRE of $311 million in the first quarter.

Speaker Change: While also achieving our near term goals.

John: 17% higher than the first quarter last year.

Speaker Change: We remain comfortable with our ability to meet our 2025 financial targets.

John: Overall, we saw strong growth in Carlisle op invest.

Speaker Change: But realize the situation is fluid.

In global credit.

Harvey Schwartz: Moving on to global wealth. As you know, two years ago, we prioritized this initiative by aggressively adding to the team and leveraging our global brand to drive growth. As a result, evergreen inflows have doubled over the past year. In global private equity, we remain focused on driving value in our portfolio companies and monetizing assets. We've generated $20 billion of realization over the last 12 months.

John: While global private equity was in line with expectations.

Speaker Change: And the market backdrop is uncertain.

Speaker Change: We continue to invest in our businesses to better position Carlyle for long term success.

John: Transaction fees more than tripled in the quarter compared to the same period last year.

John: The $150 million in transaction fees, we generated over the past two quarters is more than any prior year.

Speaker Change: We finished the first quarter with 453 billion of AUM.

Speaker Change: Up 6% year over year.

Speaker Change: Growth was driven by $50 billion of inflows over the past year.

John: Carlisle out invest generated $66 million in FRE in the first quarter nearly double the level from the first quarter of 2024.

Speaker Change: Including <unk> 14 billion in the first quarter alone.

Speaker Change: We generated record FRE of $311 million in the first quarter.

Harvey Schwartz: In the first quarter, we successfully IPO'd ExaWare Technologies in India. This is the largest ever sponsored by IPO in India and the largest technology services IPO globally in more than a decade. We also closed a nearly $1 billion secondary sale of shares of Standard Arrow and a $1.4 billion sale of Parallax.

John: Management fee growth of nearly 40% year over year led to a record FRE margin of.

Speaker Change: 17% higher than the first quarter last year.

John: 58%.

Speaker Change: Overall, we saw strong growth in Carlyle will help invest.

John: With good momentum across all areas of Carlisle out invest.

John: With strong inflows into our secondaries platform portfolio finance.

John: And our global wealth strategy.

John: In global credit first.

Harvey Schwartz: John will touch on this in more detail. We saw continued appreciation in our two latest vintage U.S. buyout funds, and the underlying portfolio companies continue to grow EBITDA at double-digit rates through the first quarter.

John: First quarter revenue of $232 million grew 28% year over year.

John: Driven by capital market fees.

John: Global credit also experienced strong first quarter inflows of $7 5 billion.

Harvey Schwartz: The portfolio remains well-positioned in the current environment.

John: The rapid growth of Carlisle help invest in global credit has driven these businesses to account for 50%.

Harvey Schwartz: Hello. To close, Carlyle is much more diversified today than it has ever been. During these periods of market volatility, the breadth of our platform enables us to mobilize for opportunities present themselves. We will continue to invest in our growth, leverage our long-term investment horizon, and capture value creation opportunities in the private market.

John: Of our firm wide FRE.

John: Compared to 34%.

John: 2023.

John: In global private equity.

John: <unk> were in line with our expectations given expected step downs in several funds.

John: Management fees should increase in the second quarter as we recently activated management fees.

John Redett: With that, let me now turn the call over to John, who will walk through our results in more detail. Thanks, Harvey. Good morning, everyone. As Harvey said, our first quarter results were strong. We delivered record FRE. FRA Margin, and Assets Under Management. DE of $455 million was a record start to the year. As a management team, we are focused on accelerating long-term growth. while also achieving our near-term goal. We remain comfortable with our ability to meet our 2025 financial targets. but realize the situation is fluid and a market backdrop is uncertain. We continue to invest in our businesses to better position Carlyle for long term success.

Speaker Change: 232 million grew 28% year over year, driven by capital market fees Global credit also experienced strong first quarter inflows of seven and a half billion dollars.

John: Our latest U S real estate fund.

John: A highlight in our private equity business as U S buyout.

John: Our largest flagship strategy, which continues to perform particularly well.

Speaker Change: The rapid growth of Carlyle Alpenvest and global credit has driven these businesses to account for 50% of our firm wide freed to 34%.

John: The last two vintages, each appreciated 2% to 3% in the quarter.

John: At around 18% over the past year.

John: Along with this depreciation we also returned significant capital to investors.

Speaker Change: 2023, and global private equity results were in line with our expectations given expected step downs in several funds.

John: Across all of our U S buyout strategies.

John: We returned nearly 8 billion of proceeds to investors over the past year.

John: More broadly across the Carlyle investment platform, we returned 31 billion in proceeds more than 40% higher than the prior 12 month period.

Speaker Change: Management fee should increase in the second quarter as we recently activated management fees on our latest U S Real estate fund.

John Redett: We finished the first quarter with 453 billion of AUM. up 6% year over year. Growth was driven by 50 billion of inflows over the past year. including $14 billion in the first quarter alone. We generated a record FRE of $311 million in the first quarter. 17% higher than the first quarter last year. Overall, we saw strong growth in Carlyle Alpenvest. and Global Credit. while global private equity was in line with expectations. Transaction fees more than tripled in the quarter compared to the same period last year. The $150 million in transaction fees we generated over the past two quarters is more than any prior year.

John: This is indicative of the strength of our diversified global investment portfolio.

Speaker Change: A highlight in our private equity business is U S buyout, our largest flagship strategy, which continues to perform particularly well the last two vintages, each appreciated 2% to 3% in the quarter and around 18% over.

John: And further upside when markets are more active.

John: In our evergreen strategies, we managed 26 billion in AUM up 20, 27% over the past year.

Speaker Change: Along with this appreciation. We also returned significant capital to investors across all of our U S. Buyout strategies, we return nearly 8 billion of proceeds to investors over the past year more broadly across the Carlin.

John: And we continue to actively invest in our wealth capabilities.

With head count in this area, increasing by 100% over the past year.

John: This remains a major driver of long term growth for Carlyle.

John: Wrapping up.

John: While market conditions remain dynamic Carlyle is built to perform across market cycles.

Speaker Change: We returned 31 billion in proceeds more than 40% higher than the prior 12 month period. This is indicative of the strength of our diversified global investment portfolio and further upside when markets are more active in our evergreen strategies.

John: Our nearly 40 year track record.

John: Long term capital base and.

John: And global scale to provide a strong foundation for continued growth.

John Redett: Carlyle Alpenbest generated $66 million in FRE in the first quarter, nearly double the level from the first quarter of 2024. Management fee growth of nearly 40% year over year led to a record FRE margin of 58%. with good momentum across all areas of Carlyle AlpInvest with strong inflows into our secondaries platform, portfolio finance. and our Global Wealth Strategy. and Global Credit. First quarter revenue of $232 million grew 28% year over year. Driven by capital markets. Global Credit also experienced strong first quarter inflows of $7.5 billion. The rapid growth of Carlyle Alp Invest and Global Credit has driven these businesses to account for 50% of our firm-wide FRE.

John: We are confident in our ability to deliver attractive results for shareholders.

Speaker Change: Is 26 billion in a U M up 27% over the past year, and we continue to actively invest in our wealth capabilities with headcount in this area increasing by 100% over the past year.

John: While continuing to be a trusted partner.

John: To our investors.

Speaker Change: With that let me turn the call over to the operator for your questions.

Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Speaker Change: This remains a major driver of long term growth for Carlyle wrapping up.

Speaker Change: To withdraw your question. Please press star one again in.

Speaker Change: In the interest of time, we ask which please limit yourself to one question you may rejoin the queue. Please standby, while we compile the Q&A roster.

Speaker Change: Wall market conditions remain dynamic Carlyle is built to perform across market cycles, our nearly 40 year track record long term capital base.

Speaker Change: Okay.

Speaker Change: Our first question comes from Ben <unk> with Barclays. Your line is open.

Speaker Change: Global scale provide a strong foundation for continued growth we are confident in our ability to deliver attractive results for shareholders, while continuing to be a trusted partner to our investors with that let me turn the call over to the operator for your questions.

Ben: Hey, good morning, and thanks for taking the question.

Speaker Change: Good morning, Ben maybe just start good morning, Harvey Let me just starting out with something high level I mean, you talked a little bit about the macro backdrop.

Speaker Change: Given your portfolio is quite global can you talk a little bit about how you're viewing the impact in trade policy and tariffs on investment and deployment activity and.

Speaker Change: As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again in the interest of time, yes that you. Please limit yourself to one question you may rejoin the queue. Please stand by.

John Redett: compared to 34% in 2023. and Global Private Equity. Results were in line with our expectations given expected step-downs in several funds. Management fees should increase in the second quarter as we recently activated management fees on our latest US real estate.

Speaker Change: And how is that may be feeding into the LP discussions getting you mentioned in Q1.

Speaker Change: Especially earlier in the year and turned a lot of capital.

Speaker Change: Is that sort of impacting LP discussions.

Speaker Change: More mortgages.

Speaker Change: Yes.

Speaker Change: Our first question comes from Ben Buddish with Barclays. Your line is open hey, good morning, and thanks for taking the question morning Man. If you start morning, Harby high level I mean, you talk about TRO.

Speaker Change: Sure so.

Speaker Change: <unk>.

Speaker Change: I think actually just stepping back for a second and I talked a bit about some of this in my prepared remarks.

John Redett: A highlight in our private equity business is U.S. Buyout. our largest flagship strategy, which continues to perform particularly well. The last two vintages each appreciated 2% to 3% in the quarter. and around 18% over the past year. Along with this appreciation, we also returned significant capital to investors. Across all of our U.S. buyout strategies, we returned nearly $8 billion of proceeds to investors over the past year. More broadly, across the Carlyle investment platform, we returned $31 billion in proceeds, more than 40% higher than the prior 12-month period. This is indicative of the strength of our diversified global investment portfolio.

Speaker Change: We obviously came into the year with very very high expectations.

Speaker Change: The tariff policy implementation.

Speaker Change: I think market participants, obviously were caught a bit flat footed with the initial announcement I think subsequent to that the administration has done a thoughtful job of.

Speaker Change: Bringing together.

Ben Buddish: Especially earlier in the year you had joined a lot of capital how is that sort of impacting you know LP discussions you know more more recently.

Speaker Change: How they are thinking about the broader implementation of the full policy set.

Speaker Change: I was at <unk> earlier, this week and I heard the Treasury Secretary to talk about the three legs of the stool and I think that the articulation of the understanding across market participants.

Speaker Change: Sure So [noise].

Speaker Change: I think actually just stepping back for a second and I talked a bit about some of this about my prepared remarks, you know, we obviously came into the year with very very high expectations. The tariff policy implementation I think market.

Speaker Change: Really.

Speaker Change: Having a much more positive impact on what was initial sentiment reaction.

John Redett: and further upside when markets are more active.

John Redett: In our evergreen strategies, we managed $26 billion in AUM, up 27% over the past year. and we continue to actively invest in our wealth capabilities. with headcount in this area increasing by 100% over the past year. This remains a major driver of long-term growth for Carlyle.

Speaker Change: Now more broadly I would say.

Speaker Change: Discussions with Lps.

Speaker Change: There is a sort of that sort of short term focus that everyone has in the marketplace and ive talked to more <unk> and Ceos in the last couple of weeks maybe in my entire career I would say, so obviously theres a lot of focus on headlines.

Speaker Change: A bit flat footed with the initial announcement I think subsequent to that the administration has done a thoughtful job of bringing together.

Speaker Change: How they're thinking about the broader implementation of the full policy set I was at Milken earlier this week and I heard the Treasury Secretary talk about the three legs of the stool and I think that you articulation and the understanding across market participants is really.

Speaker Change: Expectations day to day, because the market just wants to see sort of where the policy is headed in terms of progress.

John Redett: Wrapping up. While market conditions remain dynamic, Carlyle is built to perform across market cycles. are nearly 40-year track records. long-term capital base. and Global Scale provide a strong foundation for continued growth. We are confident in our ability to deliver attractive results for shareholders, while continuing to be a trusted partner to our investors.

Speaker Change: But I would say broadly speaking.

Speaker Change: This is not an environment, where I would say is either a red light Green light I would say, it's sort of <unk>.

Speaker Change: I think having a much more positive impact on what was initial sentiment reaction now more broadly I would say the discussions with L. P's.

Speaker Change: Different shades of yellow.

Speaker Change: But the vast majority of the.

Speaker Change: The senior folks have spoken in the last several weeks.

Speaker Change: I would say.

Speaker Change: There's a sort of sort of form focus that everyone has in the marketplace and I've talked to more C. O's and Ceos in the last couple of weeks and maybe in my entire career I would say so obviously, there's a lot of focus on headlines expectations day to day.

Speaker Change: Cautiously opportunistic.

Operator: With that, let me turn the call over to the operator for your question. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To draw your question, please press star 1 1.

Speaker Change: So very much looking for opportunities to deploy capital.

Speaker Change: And one variant or another each conversation finishes with hey, we're open for business.

Speaker Change: And that Shouldnt really be surprising when we think about where the S&P is relative to the start of the year.

Speaker Change: The market just wants to see sort of where the policy is headed in terms of progress, but I would say broadly speaking.

Operator: In the interest of time, we ask that you please limit yourself to one question. You may rejoin the. stand by while we compile the Q&A.

Speaker Change: And where capital markets are but I would say that people are.

Speaker Change: This is not an environment, where I would say is either a red light or a green light I would say, it's sort of different shades of yellow, but.

Deploying capital, but theyre being very very thoughtful about it and the more progress we see on policy implementation. Obviously, the more positive reaction will have in the marketplace now the one big question out there that everyone's focused on as are we is where it's the dialogue with China because it is hard for a mark.

Ben Budish: Our first question comes from Ben Budish with Barclays. Your line is open. Hey, good morning, and thanks for taking the question. Morning, Ben. Maybe just start at—morning, Harvey. Maybe just starting out with something high-level. I mean, you talked a little bit about the macro backdrop.

Harvey Schwartz: Just, you know, given your portfolio is quite global, can you talk a little bit about how you're viewing the impact of trade policy and tariffs on investment and deployment activity, and how is that maybe feeding into LP discussions? You know, you mentioned in Q1 that, you know, especially earlier in the year, you had earned a lot of capital. How is that sort of impacting, you know, LP discussions, you know, more recently?

Speaker Change: Participants, including us to see the backdrop in terms of second order effects on the economy, if the U S and kind of the two largest economy in the world are in some very long sustained trade embargo or trade war.

Speaker Change: Another each conversation finishes with hey, we're open for business and that shouldn't really be surprising when we think about where the SP is relative to the start of the year and where capital markets are but I would say that people are.

Speaker Change: Hard to imagine.

Speaker Change: That really being good for the global economic environment. So that's really the biggest question on People's minds, and they want to see progress.

Harvey Schwartz: You're so I think, actually, just stepping back for a second, I talked a bit about some of this in my prepared remarks. You know, we obviously came into the year with very, very high expectations. The tariff policy implementation I think market participants obviously were caught a bit flat-footed with the initial announcement. I think subsequent to that, the administration has done a thoughtful job of bringing together how they're thinking about the broader implementation of the full policy set. I was at Milken earlier this week, and I heard the Treasury Secretary talk about the three legs of the stool.

Speaker Change: Deploying capital, but they're being very very thoughtful about it and the more progress we see on policy implementation, obviously, the more positive reaction will happen the marketplace now the one big question out there that everyone's focused on as our we is where the dialogue sit.

Speaker Change: Thank you. Our next question comes from Alex <unk> with Goldman Sachs. Your line is now open.

Alex: Hey, good morning, everybody. Thank you for the question as well.

Speaker Change: So I wanted to double click into private equity for a second so very good momentum outside of private equity. Obviously, you talked about op invest in real estate and credit all of that is moving along nicely, but given the fact that theres just so much focus for you and really the industry broadly as well on DPI performance and just the elongated sales cycle.

Speaker Change: Because it is hard for a market participants, including us to see the backdrop in terms of second order effects in the economy, if the U S and kind of the two largest accounts in the world are in some very long sustained freight embargo Retrade war, it's hard to imagine.

Speaker Change: We're seeing private equity how are you thinking about the corporate key franchise for the next 12 to 18 months, what does it mean for <unk> and in terms of both sizing and timing. Thanks.

Speaker Change: That really being good for the global economic environment. So that's really the biggest question on People's minds, and they want to see progress.

Harvey Schwartz: And I think that the articulation and the understanding across market participants is really I think having a much more positive impact on what was initial sentiment reaction.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Alex Blostein with Goldman Sachs. Your line is now open.

Speaker Change: So on timing I don't see any major adjustments to us going back into the market on <unk> and that will really be driven by our pace of deployment you saw that we were very active.

Alex Blostein: Hi, good morning, everybody. Thank you for the questions well, so hurry I wanted to double click into private equity for a second so very good momentum outside of private equity, obviously, you talked about Alphamedus and real estate and credit all that is moving along nicely, but given the fact.

Harvey Schwartz: Now, more broadly, I would say the discussions with LPs There's a sort of a sort of short-term focus that everyone has in the marketplace. And I've talked to more CIOs and CEOs in the last couple of weeks than maybe in my entire career, I would say. So obviously, there's a lot of focus on headlines, expectations day to day, because the market just wants to see sort of where the policy is headed in terms of progress. But I would say, broadly speaking, this is not an environment where, I would say, is either a red light or a green light.

Speaker Change: In deploying capital in <unk> last year, I think more importantly across the private equity complex a couple of factors one.

Speaker Change: Towards the end of this year beginning of next year, we will be launching our wealth platform and that'll bring in a whole separate stream of capital. There's a lot of appetite for Carlyle on platforms globally across all of our solutions.

Speaker Change: For you and really the industry brought leaves well on D. P. I performance and just the elongated sales cycle, we're seeing private equity how are you thinking about the corporate P franchise for the next 12 to 18 months what does it mean for you know CPN and in terms of both sizing and timing. Thanks.

Speaker Change: In terms of the dynamic I'll tell you the way we're thinking about it and we are managing our business is.

Speaker Change: So on time I don't see any major adjustments, that's going back into the market on C. P. Nine that'll really be driven by our pace of deployment you saw that we were very active.

Speaker Change: Obviously, our teams have done a really good job and John highlighted U S buyout in terms of the portfolio.

Harvey Schwartz: I would say it's sort of different shades of yellow. But the vast majority of the senior folks I've spoken to in the last couple of weeks. are, I would say, Cautiously opportunistic. So very much looking for opportunities to deploy capital. In one variant or another, each conversation finishes with, hey, we're open for business. And that shouldn't really be surprising when we think about where the S&P is relative to the start of the year and where capital markets are, but I would say that people are. deploying capital, but they're being very, very thoughtful about it. And the more progress we see on policy implementation, obviously, the more positive reaction we'll have in the marketplace.

Speaker Change: And the amount of capital we return across our private equity complex really makes us a bit of a positive outlier. So we've been actively returning capital I mean, some top my head if I think about the last nine months or so we took standard arrow public and it was the third largest IPO.

Speaker Change: I think.

Speaker Change: Towards the end of this year beginning of next year, we will be launching our wealth platform and that'll bring in a whole separate stream of capital. There's a lot of appetite for Carlyle on platforms globally across all of our solutions.

John: The year in the U S. We did hex aware, which John spoke about in EMEA, which is the largest ever private equity owned company in India, which is <unk> largest ever private equity owned entity in Japan, and so our teams.

Speaker Change: Have been navigating this market environment I think quite thoughtfully.

John: In terms of private equity broadly I think that the.

John: The marketplace will continue to see some headwinds I think that those headwinds if you have scale like we do and diversification I think it's much.

Speaker Change: And the amount of capital we returned across our private equity complex really makes us a bit of a positive outlier. So we've been actively returning capital my head if I think about the last nine months or so we took standard error public and it was the third largest IPO.

Harvey Schwartz: Now, the one big question out there that everyone's focused on, as are we, is where's the dialogue sit with China, because it is hard for market participants, including us, to see the backdrop in terms of second order effects in the economy. If the US and China, the two largest economies in the world are in some very long sustained trade embargo or trade war, it's hard to imagine that really being good for the global economic environment. So that's really the biggest question on people's minds, and they want to see progress.

John: More easily navigated, but we're really.

Speaker Change: Quite proud of the performance, particularly our U S buyout business under John what would you add yes look.

John: Of the year in the U S. We did hexaware, which John spoke about any which is the largest ever private equity owned company in India, which is regaku largest ever private equity owned entity in Japan, and so our teams.

Speaker Change: Look this is a business we've talked a lot about in the past we made some changes to our U S. Private equity business I would just echo Harvey Harvey said, we're very happy with the performance in our U S buyout business again, good appreciation. This quarter. If you look at the last 12 months around 18% for our two latest vintages. So the performance is true.

John: I've been navigating this market environment, I think quite bothly in terms of private equity broadly I think that the marketplace will continue to see some headwinds I think that those headwinds if you have scale like we do anification.

Alex Blostein: Our next question comes from Alex Blostein with Goldman Sachs. Your line is now open. Hi, good morning, everybody. Thank you for the questions.

Speaker Change: <unk> to our expectations and also just what Harvey said, we have been very active on the realization front.

Speaker Change: Harvey listed a couple of those and quite frankly, we even had a realization in our Asia Asia buyout business post trade Liberation day, we sold a big block of.

Harvey Schwartz: Well, so Hari, I wanted to double click into private equity for a second. So very good momentum outside of private equity. Obviously, you talked about Alpinvest and real estate and credit, all of that is moving along nicely. But given the fact that there's just so much focus for you, and really the industry broadly as well on DPI performance, and just the elongated sales cycle, we're seeing private equity.

John: More easily navigated, but we're really.

John: Quite proud of the performance, particularly in our U S. Bio business I know John what would you add yeah look this is a business we've talked a lot about in the past we made some changes to our U S. Private equity business I would just echo Harvard what Harvey said, we're very happy with the performance and our us.

The company, we owned in India. So, we're continuing to execute and that's what we're focused on.

Speaker Change: Thank you. Our next question comes from Patrick Davitt with Autonomous Research. Your line is open.

Harvey Schwartz: How are you thinking about the corporate P franchise for the next 12 to 18 months? What does it mean for you know, CP9 and in terms of both sizing and timing? Thanks. So on timing, I don't see any major adjustments to us going back into the market on CP9, that'll really be driven by our pace of deployment. You saw that we were very active in deploying capital in CP9 last year. I think, you know, more importantly, across the private equity complex, a couple of factors.

Patrick Davitt: Hi, good morning, everyone.

John: Good appreciation this quarter. If you look at the last 12 months around 18% for our two latest vintages. So the performance is is tracking to our expectations and also just what Harvey said, we have been very active on the realization front and in Harvey listed a couple of those even.

Speaker Change: So nice to see you had some chunky insurance wins, but.

Speaker Change: How should we be thinking about those relative to the kind of roughly 40 billion flow guide you were expecting for the year is this counting towards that or should we consider it incremental to that and then more specifically within that flowed trac could you update us on how the wealth product flows are tracking how the redemption requests are tracking since liberation.

Speaker Change: Asia Asia Biop business post trade Liberation day, we sold a big block of the company we owned in India. So, we're continuing to execute and and that's what we're focused on.

Harvey Schwartz: One, towards the end of this year, beginning of next year, we will be launching our wealth platform and that'll bring in a whole separate stream of capital. There's a lot of appetite for Carlyle on platforms globally across all of our solutions. In terms of the dynamic, I'll tell you the way we're thinking about it and the way we're managing our business is, obviously, our teams have done a really good job, and John highlighted U.S. Buyout, in terms of the portfolio, and the amount of capital we've returned across our private equity complex really makes us a bit of a positive outlier, so we've been actively returning capital.

Speaker Change: Thank you.

Speaker Change: Yes so.

Speaker Change: Thank you. Our next question comes from Patrick David with Autonomous Research. Your line is open.

Speaker Change: When we put out the $40 billion ish.

Speaker Change: In the fourth quarter.

Speaker Change: <unk>.

Speaker Change: We view that $40 billion is a flow number so you should assume the 14.

Speaker Change: It's.

Speaker Change: Tracks to that $40 billion low number we put out there.

Speaker Change: In terms of.

Speaker Change: Well I would say we've had very very strong performance again. This is an area. We have been talking about a lot we're very focused on making investments.

Speaker Change: And then more specifically within that float track could you update us on how the wealth product flows are tracking how the redemption requests are tracking since liberation day. Thank you.

Speaker Change: In that space fundraising in the quarter was up 40% the.

John Redett: I mean, off the top of my head, if I think about the last nine months or so, we took Standard Arrow Public, I think it was the third largest IPO, of the year in the U.S., we did Hexaware, which John spoke about in India, which is the largest ever private equity-owned company in India, we did Rigaku, largest ever private equity-owned entity in Japan, and so our teams have been navigating this market environment, I think, quite thoughtfully. In terms of private equity broadly, I think that the marketplace will continue to see some headwinds, I think that those headwinds, if you have scale, like we do, and diversification, I think it's much more easily navigated, but we're really quite proud of the performance, particularly in our U.S.

Speaker Change: The amount we have in the evergreen products is up 70% year over year. So we're very pleased with the progress we are seeing in wealth and again, we only really have two products in the market that sea Tac, our credit product and cap them, our secondary product and if you look at the trajectory of cap them, it's really quite impressive in terms of the.

Speaker Change: Yeah. So.

Speaker Change: I when we put out the 40 billionish in the fourth quarter results.

Speaker Change: Fund raising.

Speaker Change: In terms of kind of post post trade policy shift.

Speaker Change: I'd say the data set we're looking at it is limited to April, but we have not seen anything in the data that would give us pause April actually was a good month, so based on what we're seeing.

Speaker Change: Well I would say we've had very very strong performance again. This is an area. We have been talking about a lot. We're very focused on making investments in that space fund raising in the quarter was up 40%.

Speaker Change: We feel pretty good.

Speaker Change: Amount, we have in the evergreen products is up 70% year over year. So we're very pleased with the progress we're seeing in well and again, we only really have two products in the market. That's ctech, our credit product in cap M. Our secondary's product in if you look at.

Speaker Change: Thank you. Our next question comes from Brian Bedell with Deutsche Bank. Your line is open.

John Redett: Buyout business.

John Redett: I don't know, John, what would you add? Yeah, look, this is a business we've talked a lot about in the past. We made some changes to our U.S. private equity business. I would just echo what Harvey said. We're very happy with the PE performance in our U.S. Buyout business. Again, good appreciation this quarter. If you look at the last 12 months, around 18% for our two latest vintages, so the performance is tracking to our expectations. Also, just what Harvey said, we have been very active on the realization front, and Harvey listed a couple of those, and quite frankly, we even had a realization in our Asia Buyout business post-trade liberation day.

Brian Bedell: Okay, great. Thanks, Scott. Thanks, Good morning folks thanks for taking my question.

Brian Bedell: Maybe just shifting to expenses very good FRE margin in one Q.

Brian Bedell: Seems like it's tracking a little ahead of that.

Speaker Change: It's really quite impressive in terms of the fundraising in terms of kind of post post trade policy shift I'd say the dataset. We're looking at it's limited to April, but we have not seen anything in the data that would give us April actually based on.

Brian Bedell: The run rate expected for the year. So maybe if you can talk John a little bit about you know.

Brian Bedell: About that run rate.

Brian Bedell: <unk> is just.

Brian Bedell: This is a good run rate for G&A as we move through the year.

Brian Bedell: And should we be expecting any additional expenses related to the retail.

Speaker Change: We feel pretty good.

Brian Bedell: Wealth efforts.

Speaker Change: Thank you. Our next question comes from Brian Bedell with Deutsche Bank. Your line is open great. Thanks. Good morning folks. Thanks for taking my question, maybe just shifting two expenses very good for your margin in one Q.

John Redett: We sold a big block of a company we owned in India, so we're continuing to execute, and that's what we're focused on.

Brian Bedell: Yeah, So I would say the 48%.

Brian Bedell: Margin, we're very happy with where that margin is.

Brian Bedell: We've been very very we've talked a lot about how.

Patrick Davitt: Our next question comes from Patrick Davitt. Autonomous Research, your line So nice to see you have some chunky insurance wins, but how should we be thinking about those relative to the kind of roughly $40 billion flow guide you were expecting for the year? Is this counting towards that, or should we consider it incremental to that?

Brian Bedell: We don't see expenses as a way to get that margin higher we're much more focused on driving that margin higher via growth in.

Speaker Change: Seems like it's tracking a little a bit ahead of the run rate expected for the year. So maybe if you can talk John a little bit about that run rate.

Brian Bedell: We're investing in the business heavily as we said on the last earnings call. The 6% FRE growth. We gave for 2025 really reflects continued investment in the business. So the 48% youre seen in the quarter reflects heavy investment in the areas we've talked about in the past where we see.

Speaker Change: Is you know is this a good run rate for G. N as we move through the year and should we be expecting any you know additional expenses related to the retail.

John Redett: And then more specifically within that flow track, could you update us on how the wealth product flows are tracking, how the redemption requests are tracking since Liberation Day? Thank you.

Speaker Change: Well.

Brian Bedell: Growth coming from so I wouldn't expect.

Speaker Change: Yeah, So I I would say the the 48% F E margin, we're very happy with where that margin is and you know look we've been very very we talked a lot about how we don't see expenses as a way to get that margin higher we're much more focused on driving that margin higher via growth and.

Brian Bedell: To escalate I think it's pretty well planned out throughout the year in terms of G&A.

John Redett: Yes, so When we put out the $40 billion-ish in the fourth quarter results, we viewed the $40 billion as a flow number, so you should assume the 14 tracks to that $40 billion flow number we put out there. In terms of wealth, I would say we've had very, very strong performance. Again, this is an area we have been talking about a lot. We're very focused on making investments in that space. Fundraising in the quarter was up 40%. The amount we have in the Evergreen products is up 70% year-over-year, so we're very pleased with the progress we're seeing in wealth.

Brian Bedell: Look the first quarter number was clearly higher than the first quarter of last year I would just say the first quarter of last year had some kind of one off positive. So I don't think its a good reference point.

Speaker Change: In the business heavily as we said on the last earnings call. The 6% F. Re growth. We gave for 2025 really reflects continued investment in the business. So the 48% you're seeing in the quarter reflects heavy investments.

Brian Bedell: But I'm happy with where G&A is I think it's pretty close to a good run rate.

Speaker Change: Type number.

Brian Bedell: Think of Hunter.

Brian Bedell: 100 ish as a as a good run rate G&A again fourth quarter.

You compare first quarter against fourth quarter fourth quarter is always a bit elevated but we're very pleased with where G&A is in kind of 95 to 100 ish is kind of how I think about a run rate.

Speaker Change: Talked about in the past, where we see growth coming from so I wouldn't expect.

Speaker Change: Thank you. Our next question comes from Brian Mckenna with citizens. Your line is open.

John Redett: Again, we only really have two products in the market. That's SeaTac, our credit product, and CapM, our secondaries product. If you look at the trajectory of CapM, it's really quite impressive in terms of the fundraising. In terms of post-trade policy shift, I'd say the data set we're looking at is limited to April, but we have not seen anything in the data that would give us pause. April actually was a good month, so based on what we're seeing, we feel pretty good.

Thanks, Good morning, everyone. So Alison Vasquez experienced some pretty impressive growth over the past year and it seems like the business remains well positioned moving forward, but how should we think about related fundraising for the balance of this year I know capex will be in the market.

Speaker Change: But I I'm happy with where GA is I think it's pretty close to a a good run rate type number I kind of think of hundred issues is a is a good run rate GA again fourth quarter. Yeah. If you compare first quarter in fourth quarter is always Ava.

Speaker Change: But what else will you be raising capital for and then just bigger picture if I look at ALP invest FRE.

Speaker Change: <unk> now represents 20% plus.

Speaker Change: Wide FRE, so where can this contribution go longer term.

Speaker Change: We're very pleased with where G. N. A is and you know kind of 95 to 100 is is kind of how I think about a run rate. Thank you. Our next question comes from Brian Mckenna with citizens. Your line is open. Thanks, good morning, everyone. So experienced experience.

Speaker Change: So well I'll kick off and then I'll hand, it over to John for a bit of detail, but I would say that.

Brian Bedell: Our next question comes from Brian Bedell with Deutsche Bank. Your line is open. Great. Thanks. Good morning, folks. Thanks for taking my question.

John: One of the initiatives over the past few years was really to better integrate the <unk> team into the broader strategy of the firm.

John Redett: Maybe just shifting to expenses. Very good FREA margin in 1Q. Seems like it's tracking a little bit ahead of the run rate expected for the year. So maybe if you can talk, John, a little bit about that run rate. Is this a good run rate for G&A as we move through the year? And should we be expecting any additional expenses related to the retail wealth effort? Yeah, so I would say the 48 percent FRE margin, we're very happy with where that margin is. And, you know, look, we've been very, very, we've talked a lot about how we don't see expenses as a way to get that margin higher.

John: So that included obviously driving the cap M solution through the wealth channel and really leveraging the entire distribution capability of the firm and so we are really starting to see is the convergence of those strategic efforts plus a great performance by the team I was just in Amsterdam, we celebrated the 20 <unk> anniversary.

Brian McKenna: Growth over the past year and it seems like the business remains well positioned moving forward, but how should we think about related fund raising for the balance of this year I know cap M will be in the market, but but what else will you be raising capital for and then just bigger picture if I look at ALP.

John: And so.

Brian McKenna: Now represents 20% plus a firm wide F. R E. So where where can this contribution go longer term.

John: Now this is also an area, where lp's globally, regardless of institutions sovereign wealth.

John: Or.

Speaker Change: So well I'll take off and I'll hand over John for a bit of the detail, but I would say that one of the initiatives over the past few years was really to better integrate the alpha investment into the broader strategy of the firm. So that included obviously driving the cap Mo.

John: The wealth channel there's huge interest in this category and I would say I expect that to continue for an extended period of time. So as we continue to leverage the brand and the platform I think there is significant upside from here.

John: But we're really pleased and obviously all of this has been done across the entire platform organically.

John Redett: We're much more focused on driving that margin higher via growth. And, you know, we're investing in the business heavily, as we said on the last earnings call. The 6 percent FRE growth we gave for 2025 really reflects continued investment in the business. So the 48 percent you're seeing in the quarter reflects heavy investment in the areas we've talked about in the past where we see growth coming from. So I wouldn't expect that to escalate. I think it's pretty well planned out throughout the year.

Speaker Change: Really leveraging the entire distribution capability of the firm and so what you're really starting to see is the convergence of those strategic efforts plus the great performance by the team I was just in Amsterdam, we celebrated the 25th anniversary of album Best and so.

Speaker Change: Yes, the only the only thing I'd add I mean.

Speaker Change: Obviously, we couldnt be more pleased with how this business is performing I mean, the organic growth rate numbers are are really really strong.

Speaker Change: Now this is also an area, where lp's globally, regardless of institution sovereign wealth.

Speaker Change: <unk> margin is very impressive.

Speaker Change: Look I think the secondary market as a whole.

Speaker Change: For the well channel there's huge interest in this category and I would say I expect that they continue very for an extended period of time. So as we continue to leverage the brand and the platform I think there's significant upside from here.

Speaker Change: The market continues to grow at very elevated levels.

Speaker Change: Activity levels are going to accelerate given the current market conditions.

John Redett: In terms of G&A, you know, look, the first quarter number was clearly higher than the first quarter of last year. I would just say the first quarter last year had some kind of one-off positives. So I don't think it's a good reference point. But I'm happy with where G&A is. I think it's pretty close to a good run rate type number. I kind of think of 100-ish is a good run rate GNA. Again, fourth quarter, if you compare first quarter against fourth quarter, fourth quarter is always a bit elevated, but we're very pleased with where GNA is.

Speaker Change: We think it's a really attractive space I think the thing you need to think about in terms of this business and its ability to have a sustainable long term growth rate is.

Speaker Change: And obviously all this has been done across the entire platform organically.

Speaker Change: We will wrap up fund raising.

Speaker Change: Yeah. The only the only thing I'd add I mean look echo a little bit Harvey said, we couldn't be more pleased with how this business is performing I mean, the organic growth rate numbers are are really really strong. The F. R. E margin is very impressive and you know look I think.

Speaker Change: At some point, probably mid year for our secondaries fund, but that funds already 57% committed so there's a there's a very clear growth path for this business, we will probably be in the market sometime soon with the next vintage of the funds. So the.

Speaker Change: The growth rate is kind of impressive looking back but also as you think about this business going forward I really really like the growth path.

Speaker Change: The market continues to grow at very elevated levels, we think activity levels are going to accelerate given the current market conditions. So we think it's a really attractive space I think the thing you need to think about in terms of this business and its ability to have a.

John Redett: And, you know, kind of 95 to 100-ish is kind of how I think about a run rate.

Speaker Change: Thank you. Our next question comes from Ken Worthington with JP Morgan Your line is open.

Brian McKenna: Our next question comes from Brian McKenna with Citizens.

Harvey Schwartz: Your line is Good morning, everyone. So Alpenvest has experienced some pretty impressive growth over the past year. And it seems like the business remains well positioned moving forward.

Ken Worthington: Hi, good morning, Thanks for taking the question.

Ken Worthington: We're seeing some potential for stress in the endowment sector and the financial media, suggesting their position in private markets.

Harvey Schwartz: But how should we think about related fundraising for the balance of this year? I know CAPM will be in the market. But what else will you be raising capital for? And then just bigger picture, you know, if I look at Alpenvest FRE, and you know, it now represents 20% plus a firm wide FRE. So where can this contribution go?

Ken Worthington: Could decline I guess, maybe first do you think this is a legitimate topic or might it be overblown and assuming it's not overblown can you talk about this from a risk perspective for Carlyle and future fund raising if endowment slow investments in private markets and then a different perspective is what could this mean.

Speaker Change: The growth rate is is kind of impressive looking back but also as you think about this business going forward I really really like the growth path.

Harvey Schwartz: So, well, I'll kick off and then I'll hand it over to John for a bit of the detail, but I would say that, you know, one of the initiatives over the past few years was really to better integrate the Alpinvest team into the broader strategy of the firm. So that included obviously driving the CAPM solution through the wealth channel and really leveraging the entire distribution capability of the firm. And so what you're really starting to see is the convergence of those strategic efforts plus the great performance by the team.

Ken Worthington: For ALP invest in your secondaries and wealth business.

Speaker Change: Thank you. Our next question comes from Ken Worthington with J P. Morgan. Your line is open [noise] hi, good morning. Thanks for taking the question, we're seeing some potential for stress in the endowment sector and the financial media, suggesting their position I.

Ken Worthington: Given your dry powder in fund raising potential there.

Ken Worthington: So I don't see the endowment.

Ken Worthington: Shifting over to some of the bigger headline number that you've seen sort of being broad based or material to the business or the industry. Obviously.

John Redett: I was just in Amsterdam, we celebrated the 25th anniversary of Alpinvest. And so now this is also an area where LP is globally regardless of institution, sovereign wealth or the wealth channel, there's huge interest in this category. And I would say, I expect that to continue for an extended period of time. So as we continue to leverage the brand and the platform, I think there's significant upside from here, but we're really pleased.

Ken Worthington: We just spoke about on the prior question.

Ken Worthington: We're one of the leading.

Ken Worthington: Providers of capital to our secondaries and co invest platform an album vast and so this in the short term will certainly be potentially opportunity for us to deploy capital into.

Ken Worthington: Into those flows we will see you all those flows as you would imagine there won't be any further we don't see.

Ken Worthington: The brand and the team.

Speaker Change: No I don't I don't see the.

Ken Worthington: But I don't see that as being a significant overhang in terms of allocation to private capital.

Speaker Change: Almond.

Ken Worthington: I think it is going to be more isolated now that could evolve that my viewpoint today.

Speaker Change: Shipping under some of the bigger headline numbers that you've seen sort of being broad based or material to the business or to the industry. Obviously you know we just spoke about in the prior question.

John Redett: And obviously all this has been done across the entire platform organically. Yeah, the only thing I'd add, I mean, echo a little bit what Harvey said, we couldn't be more pleased with how this business is performing. I mean, the organic growth rate numbers are really, really strong. The FRE margin is very impressive. And, you know, look, I think the secondary market as a whole, the market continues to grow at very elevated levels. We think activity levels are going to accelerate given the current market conditions. So we think it's a really attractive space.

Speaker Change: Thank you. Our next question comes from Mike Brown with Wells Fargo. Your line is open.

Ken Worthington: Yeah.

Speaker Change: You know, we're one of the leading.

Ken Worthington: Great. Thanks for taking my question.

Patrick Davitt: So Harvey there's headlines that continue to come out about a large life and annuity provider.

Speaker Change: Providers of capital through our secondaries and co invest platform and Alpha investment. So this in the short term will certainly be potentially opportunity for us to deploy capital into those flows we will see all those flows as you would imagine there won't be any flow, we don't see given the brand and the.

Ken Worthington: They are considering some strategic alternatives.

Speaker Change: Wood Carlisle consider some inorganic growth in that space is that something that's kind of interesting to you in terms of the opportunity to manage.

Speaker Change: But I don't see being a significant overhang in terms of allocation to private capital I think it's going to be more isolated now that could evolve, but that's that might viewpoint today.

John Redett: I think the thing you need to think about in terms of this business. And its ability to have a sustainable long term growth rate is.

Ken Worthington: Something of that asset size.

Ken Worthington: And can you just maybe touch on some of the strategic ways. You can approach something like that just given the size and complexity with that at redundant kind of partnership how can that work with fortitude.

John Redett: We will wrap up fundraising at some point, probably mid year for our secondaries fund. But that fund's already 57% committed. So there's a, there's a very clear growth path for this business. We will probably be in the market sometime soon with the next vintage of the fund. So the growth rate is, is kind of impressive looking back. But also, as you think about this business going forward, I really, really like the growth path.

Speaker Change: Thank you. Our next question comes from Mike Brown with Wells Fargo. Your line is open.

Ken Worthington: Any interesting color here would be helpful. Thank you.

Ken Worthington: Okay.

Mike Brown: Great. Thank you for taking my question. So Harvey there's headlines that continue to to come out about a large licenity provider and they're considering some strategic alternatives would karl consider some inorganic growth in that space is that.

Ken Worthington: So.

Ken Worthington: Having been here a bit over two years now I would say initially when I got here obviously.

Ken Worthington: We were very focused on repositioning the firm on all of the strategic initiatives, we've covered and we feel really good about the progress we've made.

Ken Worthington: And the momentum in the franchise and so but two years ago I think the notion of doing something inorganic.

Mike Brown: To you in terms of the opportunity to manage something of that asset size and can you just maybe touch on some of the strategic ways you could approach something like that just given the size and complexity would that have to be done via kind of partnership maybe how.

Ken Worthington: Our next question comes from Ken Worthington with J.P. Morgan. Your line is open. Hi, good morning. Pleasure to take the question.

Ken Worthington: Would have been too soon.

Ken Worthington: I would say we're much more front footed in terms of how we would want to think about that but with respect to.

Harvey Schwartz: We're seeing some potential for stress in the endowment sector, and the financial media is suggesting their position in private markets could decline. I guess maybe first, do you think this is a legitimate topic or might it be overblown? And assuming it's not overblown, can you talk about this from a risk perspective for Carlyle and future fundraising if endowments slow investments in private markets?

Ken Worthington: Our engagement on opportunities broadly.

Mike Brown: Any interesting color here would would be helpful. Thank you okay. So.

Ken Worthington: It really is just in the corporate finance math and whether it makes sense, we feel really good about the breadth of the platform whether it's.

Mike Brown: Having been here a bit over two years now I would say initially when I got here. Obviously, we were very focused on repositioning the firm on all the strategic initiatives, we've covered and we feel really good about the progress we've made in the momentum in the franchise and Somen two.

Ken Worthington: Our album invest secondaries co invest portfolio finance the credit platform, our CLO business everything that's happening in private equity. So there's no gun to our head in terms of having an asset class we need to fill in.

Harvey Schwartz: And then the different perspective is, what could this mean for Alpinvest and your secondaries and wealth business, given your dry powder and fundraising potential there? So I don't see the endowment shift into some of the bigger headline numbers that you've seen, sort of being broad based or material to the business or to the industry. Obviously, we just spoke about in the prior question, you know, we're one of the leading providers of capital through our secondaries and CoInvest platform and AlpInvest. And so this in the short term will certainly be potentially opportunity for us to deploy capital into those flows.

Ken Worthington: All the growth we've talked about for the past two years, culminating in today, it's 100% organic everything the firm is not so the firm is demonstrating now that we have the power to mobilize organically now back to your question I think with respect to insurance based on obviously I can't talk about any specific transactions, we look at reinsurance space.

Mike Brown: I would say we're much more front footed in terms of how we'd want to think about that but with respect to our engagement on opportunities broadly.

Ken Worthington: The <unk> partnership and our partners and Fortitude.

Mike Brown: Really is just in the corporate finance math and whether it makes sense, we feel really good about the breadth of the platform whether it's our album Best Secondary's Coinvest portfolio finance the credit platform, our CLO business everything that's happening in private equity. So there's no gun to our head.

Ken Worthington: We have really been.

Ken Worthington: Fantastic for us and a number of ways.

Ken Worthington: Obviously, the pure benefits of the growth in fortitude, and our capital commitment there and our ability to work with great partners.

Ken Worthington: In that business, that's kind of the narrow definition of why it's been fantastic. The other reason why it's been fantastic.

Mike Brown: And asset class, we need to fill and you know all the growth we've talked about for the past two years culming in today, it's 100% organic everything the firm has done so the firm has demonstrating now that we have the power to mobilize organically now back to your question.

Harvey Schwartz: We will see all those flows, as you would imagine. There won't be any flow we don't see, given the brand and the team. But I don't see this being a significant overhang in terms of allocation to private capital. I think it's going to be more isolated. Now, that could be my viewpoint today.

Ken Worthington: Given us really really right intelligence and asset management capabilities in the insurance space. So working with Fortitude has given us a multiyear advantage in terms of that skill set and as you saw last year as we grow our asset based finance business and the transactions, we've announced and the partnerships we've established and so as all of this is <unk>.

Mike Brown: Insurance base, and obviously I can't talk about any specific transactions, we look at but in insurance base. The four to two partnership and our partners in Fourty two.

Mike Brown: Our next question comes from Mike Brown with Wells Fargo. Great, thank you for taking my question. So, Harvey, there's headlines that continue to come out about a large licensed annuity provider. considering some strategic alternatives. Would Carlyle consider some inorganic growth in that space? Is that something that's kind of interesting to you in terms of the opportunity to manage something of that asset size? And can you just maybe touch on some of the strategic ways you could approach something like that, just given the size and complexity? Would that have to be done via kind of partnership?

Ken Worthington: Together, it's also given us a much more multi dimensional view on how to think about insurance.

Mike Brown: Have really been fantastic for us in a number of ways, obviously, the pure benefits of the growth in 42, and our capital commitment there and our ability to work with great partners in that business, that's kind of the narrow definition of why it's fantastic.

Ken Worthington: I think in the.

Ken Worthington: Maybe underneath your question because I'll just wrap up at this point is.

Ken Worthington: Probably underneath your question is this question of Okay capital heavier capital light you Didnt express it that way, but I think that's sort of embedded in your question and so I'll tell you the way that we think about it.

Mike Brown: Yeah, it's given us really really great intelligence and asset management capabilities in the insurance space. So working with 42 has given us a multi year advantage in terms of that skill set and as you saw last year as we grow our asset based finance.

Ken Worthington: And our board thinks about it is not so much that capital heavy negative or capital light is positive or vice versa. I think it is a bit of a goldilocks right.

Ken Worthington: So theres sort of an optimal point of you want a certain amount of capital, but not too much.

Mike Brown: And the partnerships, we've established and so as all this is conversed together. It's also given us a much more multidimensional view on how to think about insurance.

Ken Worthington: But we have a preference for staying capital light and if we can solve for capital light I will tell you. When you go to market environments. Like you saw over the past six weeks and you can wholly focused on deployment managing our portfolio and not have to worry about a heavy balance sheet.

Harvey Schwartz: Maybe how could that work with Fortitude? Any interesting color here would be helpful. Thank you.

Harvey Schwartz: Okay, so You know, having been here a bit over two years now, I would say initially when I got here, obviously, We were very focused on repositioning the firm on all the strategic initiatives we've covered, and we feel really good about the progress we've made and the momentum in the franchise. And so, but two years ago, I think the notion of doing something inorganic would have been too soon. I would say we're much more front footed in terms of how we want to think about that, but, you know, with respect to... Our engagement on opportunities broadly, it really is just in the corporate finance math, and whether it makes sense, you know, we feel really good about the breadth of the platform, whether it's our Alpinvest, Secondaries, Co-Invest, Portfolio Finance, the credit platform, our CLO business, everything that's happening in private equity.

Mike Brown: I think in the maybe underneath your question because I'll just wrap up with this point is probably underneath. Your question is this question of Okay capital heavy or capital light you didn't express it that way, but I think the sort of embedded in your question and so I'll tell you the way that we think about it.

Ken Worthington: You really see the benefits of that and you can be extraordinarily fun footed with your clients and so strong bias for capital light, but they are at this point I would say any number of ways. We can solve for an accretive acquisition. If it makes sense for us in any part of the business.

Speaker Change: Thank you. Our next question comes from Michael Cyprus with Morgan Stanley. Your line is open.

Michael Cyprus: Hey, good morning, Thanks for taking the question I was hoping maybe you could elaborate upon the opportunity set that you see in Japan across your business a lot happening there at the micro level across Japan, just curious if you could speak to some of the opportunities across the buyout business, but then also cross border too and on the credit side as well. Thank you.

Mike Brown: Capital Y and if we can solve for capital light I will tell you. When you go through market environments. Like you saw over the past six weeks and you can wholly focus on deployment managing your portfolio and not have to worry about a heavy balance sheet, you really see the benefits of that and you can be extraordinarily from footed.

Harvey Schwartz: So there's no gun to our head in terms of having an asset class we need to fill. And all the growth we've talked about for the past two years culminating in today, it's 100% organic, everything the firm has done. So the firm is demonstrating now that we have the power to mobilize organically. Now, back to your question, I think with respect to insurance-based, and obviously I can't talk about any specific transactions we look at, but an insurance-based. Fortitude Partnership, and our partners in Fortitude have really been fantastic for us in a number of ways. Obviously, the pure benefits of the growth in Fortitude and our capital commitment there and our ability to work with great partners in that business That's kind of the narrow definition of why it's been fantastic.

Speaker Change: Yes, so obviously.

Mike Brown: So strong buyers for capital life, but they're at this point I would say any number of ways. We could solve for an accretive acquisition. If it makes sense for us in any part of the business.

Speaker Change: And as Mark has been incredibly dynamic.

I'll be in Japan, and a couple of week celebrating our 20 <unk> anniversary.

Speaker Change: One or two firms that have actually stayed committed to Japan for that period of time and the franchises is exceptionally strong exceptionally strong.

Speaker Change: Thank you. Our next question comes from Michael Cyprus with Morgan Stanley. Your line is open.

Speaker Change: Obviously, they grew their fund significantly.

Michael Cyprus: Hey, good morning, Thanks for taking the question I was hoping maybe you could elaborate upon the opportunities set that you see in Japan across your business a lot happening there at the micro level across Japan, just curious if you could speak to some of the opportunities across the Biops, but then also.

Speaker Change: Most recent fund raise last year and my expectation is that when they are back in the market.

Speaker Change: The next couple of years that fundraise will just continue to grow because of demand or LP interest and the opportunity set only continues to look better lease right now.

Speaker Change: In terms of I think how do we extend that brand well.

Speaker Change: We're doing that a lot of ways.

Speaker Change: <unk> been on wealth platforms in Japan.

Harvey Schwartz: The other reason why it's been fantastic is because it's given us really, really great intelligence and asset management capabilities in the insurance space. So working with Fortitude has given us a multi-year advantage in terms of that skill set. And as you saw last year, as we grow our asset based finance business and the transactions we've announced and the partnerships we've established. And so as all of this is converged together, it's also given us a much more multi-dimensional view on how to think about insurance. I think in that maybe underneath your question, because I'll just wrap up what this point is, probably underneath your question is this question of, okay, capital heavy or capital light.

Speaker Change: Obviously, working with fortitude to leverage their skill set and our brand.

Speaker Change: Has been very very powerful you've seen is as I said in my remarks are six transactions. So we're really a leader in the insurance space there, but all of this dates back to the 25 year history of the firm has invested in Japan, and I will say the Japanese market.

Michael Cyprus: Exceptionally strong obviously they grew their funds significantly in the most recent fund raise last year and my expectation is that when they're back in the market in the next couple years that fund raise will just continue to grow because the demand for LP interest and the opportunity.

Speaker Change: Is increasingly dynamic for a couple of reasons, which are compelling. One obviously is this evolution of companies willing to become more dynamic in terms of their corporate stewardship. So that's fantastic for us again, given our long standing.

Speaker Change: Our role in the region and our network.

Harvey Schwartz: You didn't express it that way, but I think that's sort of embedded in your question. And so I'll tell you the way that we think about it and our board thinks about it is not so much that capital heavy is negative or capital light is positive or vice versa. I think it's a bit of a lot. So there's sort of an optimal point of, you want a certain amount of capital, but not too much, but we have a preference for staying capital light. And if we can solve for capital light, and I will tell you, when you go through market environments like you saw over the past six weeks, and you can wholly focus on deployment, managing your portfolio, and not have to worry about a heavy balance sheet, you really see the benefits of that, and you can be extraordinarily fun-footed with your clients.

Speaker Change: But also there is a real push to extend asset management capabilities and so we can play a valuable role there. So we're super enthusiastic about our position in Japan and enroll in the region.

Michael Cyprus: Obviously.

Michael Cyprus: Working with fortitude leverage their skill set at our brand has been very very powerful you've seen us as I said in my remarks, our six transaction to really a leader in the insurance space there, but all of this states back to the 25 year history of the firm has.

Speaker Change: Thank you. Our next question comes from Bill Katz with PD Cowen Your line is open.

Bill Katz: Thank you for taking the question good morning, everybody.

Michael Cyprus: I will say the Japanese market.

Maybe for John or yourself Harvey you've done a very nice job as you highlighted on the transaction line could you unpack maybe the difference between sort of regular way leverage to deployment versus where you stand in terms of the capital markets and as you look ahead, how should we think about the flight path for growth or for the first six months last six months of <unk>.

Michael Cyprus: Is increasingly dynamic for a couple of reasons, which are compelling. One obviously is this evolution of companies willing to become a more dynamic in terms of their corporate stewardship. So that's fantastic for us again, given our longstanding role in the.

Harvey Schwartz: And so strong bias for capital light. But there, at this point, I would say any number of ways we could solve for an accretive acquisition, if it makes sense for us in any part of the business.

Michael Cyprus: But also there's a real push to extend asset management capabilities and so we can play a valuable role there. So we're super enthusiastic about our position in Japan and the role in the region.

Speaker Change: Levels. Thank you.

Bill Katz: So.

Bill Katz: Yeah. So.

Bill Katz: Again this was a strategic initiative I launched two years ago.

Speaker Change: The team here was extraordinary in terms of managing the liability side of the balance sheet at the portfolio of companies, but there wasn't a process in place, we're actually driving value in terms of the capital markets business beyond that so we protected the.

Speaker Change: [noise]. Thank you. Our next question comes from Bill Katz with P. Down. Your line is open. Thank you [noise] for taking the question. Good morning, everybody, maybe for John or yourself Harvey you've done very nice job as you highlighted on the transaction line could you on Pat maybe the difference between sort of regular.

Michael Cyprys: Our next question. Michael Cyprys with Morgan Stanley, your line is open. Hey, good morning. Thanks for taking the question. I was hoping maybe you could elaborate upon the opportunity set that you see in Japan, across your business, a lot happening there at the micro level across Japan. Just curious if you could speak to some of the opportunities across the buyout business, but then also across Fortitude and on the credit side as well. Thank you. Yeah, so obviously, Japanese market has been incredibly dynamic.

Speaker Change: Capability set added to it and really restructured the incentive.

Bill Katz: Leverage to deployment versus where you stand in terms of capital markets and as you look ahead, how should we think about the flight path for growth off of the first six months last six months of levels. Thank you.

Speaker Change: Cross their firm for driving value through capital markets now what we're not doing is we're not committing a lot of balance sheet. So we're not taking risk. This is really being driven by the execution activity levels across the platform, whether it's in private equity credit.

Harvey Schwartz: I'll be in Japan in a couple weeks celebrating our 20th anniversary. I think we're one of two firms that have actually stayed committed to Japan for that period of time. And the franchise is exceptionally strong, exceptionally. Obviously, they grew their fund significantly in the most recent fund raise last year, and my expectation is that when they're back in the market in the next couple years, that fund raise will just continue to grow, because the demand for LP interest and the opportunity set only continues to look better, at least right now. In terms of, I think, how do we extend that brand, we're capable of doing that in a lot of ways.

Bill Katz: So you want I'll handle that yeah. So again this was a strategic initiative I launched two years ago.

Speaker Change: Infrastructure.

Speaker Change: It's going to be activity, driven and so quarter to quarter is going to be youll see it will be around deployment restructurings and things like that that we do in terms of.

Bill Katz: The team here was extraordinary in terms of managing liability side for the balance sheet of the portfolio companies, but there wasn't a process in place for actually driving value in terms of the capital markets business beyond that so we protected the capability set added to it.

Speaker Change: The portfolio company balance sheets and in how we invest capital but.

Speaker Change: The trajectory here is quite good over the long term.

Speaker Change: A lot of the businesses werent actually enabled or in a position to actually participate in this and so as we mobilize the firm across this there's multiyear growth here, but.

Bill Katz: Restructured the incentive across the firm for driving value for capital markets now what we're not doing is we're not committing a lot of balance sheets, we're not taking risk. This is really being driven by the execution typically levels across the platform.

Speaker Change: As John said, the $150 million that we generated just over two quarters would have been the best year ever and this is not in a high velocity environment. Obviously, so hard to put a hard number on it but again I think we are.

Harvey Schwartz: We've been on wealth platforms in Japan. Obviously, working with Fortitude to leverage their skill set and our brand has been very, very powerful. You've seen us, as I said in my remarks, our sixth transaction to really a leader in the insurance space there. But all of this dates back to the 25-year history the firm has invested in Japan. I will say the Japanese market is increasingly dynamic for a couple of reasons, which are compelling. One, obviously, is this evolution of companies willing to become more dynamic in terms of their corporate stewardship. So that's fantastic for us, again, given our longstanding role in the region and our network.

Bill Katz: Got it infrastructure, it's gonna be activity, driven and so quarter to quarter, it's gonna be you'll see it'll be around deployment restructurings and things like that that we do in terms of the portfolio company balance sheets, and how we invest capital but.

Speaker Change: Super proud of what the team is doing but most importantly, we're not taking any capital risk here. So we're staying capital light in this model.

Speaker Change: Thank you. Our next question comes from Kyle Voigt with <unk>. Your line is open.

Speaker Change: Trajectory here is quite good over the long term a lot of the businesses weren't actually enabled or in a position to actually participate in this and so as we mobile year growth here, but as John said, the hundred 50 million.

Speaker Change: Hi, Good morning, Thanks for taking my question maybe.

Speaker Change: Hey, Don just a question on real estate looks like CRP 10 was activated in April and has seven 5 billion committed so.

Speaker Change: Already almost larger than the prior vintage just wondering if you could give us an updated view on the sizing for CRP 10, and if you could also just tie that into what we could possibly expect for GPU segment management fee step up in <unk> versus <unk> at that fund turns on or even an update to the prior comments for the full year GP manner.

Speaker Change: Just an Austin quarters would have been the best year ever and this is not an a high velocity environment. Obviously, so hard to put a hard number on it but again I think we're super proud of what the team is doing but most importantly, we're not taking any capital risk here. So we're staying this model.

Harvey Schwartz: But also, there's a real push to extend asset management capabilities, and so we can play a valuable role there. So we're super enthusiastic about our position in Japan and the role in the region. Thank you.

Bill Katz: Our next question comes from Bill Katz with TD Cowen. Your line is open. Thank you for taking the question. Good morning, everybody. Maybe for John or yourself, Harvey, you've done a very nice job as you highlighted on the transaction line. Could you unpack maybe the difference between sort of regular way leverage to deployment versus where you stand in terms of capital markets? As you look ahead, how should we think about the flight path for growth over the first six months, last six months of levels? Thank you.

Speaker Change: Net fee trajectory in 'twenty five would be helpful.

Speaker Change: Thank you. Our next question comes from Kyle Voigt with K B W. Your line is open.

Speaker Change: Yes, let me kind of.

Speaker Change: Let me, let me start with the back end of your question first.

Speaker Change: Hi, Good morning, Thanks for taking my question, maybe just push it on real how you doing just a question on real estate looks like C. R. P. 10 was activated in April and has seven and a half billing committed so already almost larger than the prior vintage just wondering if you give us an updated view.

Speaker Change: In our Tpa.

Speaker Change: Segment, you did see.

Speaker Change: Management fees down and that was really driven by we had a step down in two funds one of which was our real estate fund.

Speaker Change: So that was reflected in the first quarter.

Speaker Change: The first the <unk>.

Harvey Schwartz: So I'll handle that. Yeah. So again, this was a strategic initiative I launched two years ago. The team here was extraordinary in terms of managing the liability side of the balance sheet of the portfolio companies, but there wasn't a process in place for actually driving value in terms of the capital markets business beyond that. So we protected the capability set added to it and really restructured the incentive across the firm for driving value to capital markets. Now, what we're not doing is we're not committing a lot of balance sheets. We're not taking risk. This is really being driven by the execution activity levels across the platform, whether it's in private equity, credit, infrastructure, it's going to be activity driven.

Speaker Change: For C. R. P 10, and if you could also just tie that into what we could possibly expect for G. P. E segment management fee step up in two Q versus one Q is that fund turns on or even an update to the prior comments for the full year G. B management Featurejectory in 25 would be helpful.

Speaker Change: April 1st we activated fees on our current real estate fund so youll see some growth in the management fees in the second quarter due to that activity.

Speaker Change: Due to his activating the fees on that fund so we'll benefit from that and see some growth in the second quarter in terms of management fees.

Speaker Change: Look we're still in the market raising money. So we can't really comment on ultimate size I would just say what we've said in the past we expect it to be bigger than the predecessor.

Speaker Change: Let me, let me start with the back end of your question first in our G. P. E say SEC segment you did see.

Speaker Change: Management fees down and I was really driven by we had a step down in two funds one of which was our real estate fund.

Speaker Change: Thank you. Our next question is a follow up from Brian Bedell with Deutsche Bank. Your line is open.

Brian Bedell: Oh, great. Thanks, Thanks for taking my follow ups actually just wanted to come back on funds nine.

Speaker Change: So that was reflected in the first quarter.

Speaker Change: The first the April 1st we activated fees on our current real estate fund so you'll see some growth in the management fees in the second quarter due to that active in the fees on that fund so we'll benefit from that and see some fee.

Speaker Change: Given your 70% committed on fund <unk>.

Speaker Change: Just the thought process around being back in the market for that fund could that be as early as <unk>.

Harvey Schwartz: And so quarter to quarter, it's going to be, you'll see it'll be around deployment, restructuring and things like that that we do in terms of the portfolio company balance sheets and how we invest capital. But the trajectory here is quite good over the long term. A lot of the businesses weren't actually enabled or in a position to actually participate in this. And so, as we mobilize the firm across this, there's multi-year growth here. But as John said, the 150 million that we generated just in the last two quarters would have been the best year ever.

Speaker Change: <unk>.

Speaker Change: In terms of a potential fundraising I guess in your.

Speaker Change: And your.

<unk>.

Speaker Change: We're still in the market raising money. So we can't really comment on ultimate size I would just say what we said in the past we expect it to be bigger than the predecessor.

Target for this year or what you've outlined.

Speaker Change: Any consideration of nine within that target.

Speaker Change: But theres nothing in fund nine for that target that we put out earlier this year and right now we're still holding to the fourth quarter.

Speaker Change: [noise]. Thank you. Our next question is a follow up from Brian Bedeau with Deutsche Bank. Your line is open Oh, great. Thanks. Thanks for taking my follow up actually just wanted to come back on fund nine giving your 70% committed on fund eight just the thought.

Speaker Change: Kickoff for fund nine but to have.

Speaker Change: But we're not wedded to it.

Speaker Change: If the environment stays like this we will see how deployment goes in Sunday, but we're very very focused on the performance of Sunday, which as you've seen has tracked up quite beautifully. So we'll see how we go on <unk> nine, but it's going to give or take.

Harvey Schwartz: And this is not in a high velocity environment, obviously. So hard to put a hard number on it. But again, I think we're super proud of what the team is doing. But most importantly, we're not taking any capital risk here. So we're staying capital light in this model.

Brian Bedeau: Could that be as early as as four Q.

Brian Bedeau: In terms of a potential fund raise and I guess in your in your fund raising sort of target for this year or what you've outlined is any consideration of that that target.

Speaker Change: Three to six months that Youre target zone, but theres nothing in our model for <unk>, Yes. There is no impact to this year for <unk>, but I would say there is nothing that we're seeing day to day that would suggest we're not going to put it in the market. When Harvey said again the performance in <unk> seven in CPA continues to track ahead of our expectations.

Kyle Voigt: Our next question comes from Kyle Voigt with KBW. Your line is open. Hi, good morning. Thank you. Just a question on real estate. Looks like CRP 10 was activated in April and has. already almost larger than the... I'm just wondering if you.

Brian Bedeau: But there's nothing in fun nine for that target that we put out earlier this year and right now we're still holding to the fourth quarter kickoff for fun nine, but we're not wedded to it.

Speaker Change: And we've been very active on realizations, so we feel pretty good.

Speaker Change: About <unk> nine.

Brian Bedeau: The environment stays like this we'll see how deployment goes in fund date, but we're very very focused on the performance of fund date, which as you've seen is tracked up quite beautifully. So we'll we'll see how we go on fund, but it's gonna give or take three to six months, that's your target zone.

Michael Cyprus: Thank you. Our next question comes from Michael Cyprus with Morgan Stanley. Your line is open.

John Redett: You could also just tie that into what we could possibly expect for GPE segment management fee step up. or even an update to the prior.

Michael Cyprus: Alright, Thanks for taking the follow up question just wanted to circle back just around the fundraising targets you guys mentioned 40 billion for the year, 6% FRE growth did those include the blocks from Fortitude I think in the quarter, you had $4 billion and I think there is maybe another 4 billion coming in the second quarter just wanted to clarify if that's embedded in the 40 billion fundraising, 6% FRE growth for the year.

John Redett: Let me start with the back end of your question first. In our GPE segment, you did see management fees down. And that was really driven by we had a step down in two funds, one of which was our real estate fund. So that was reflected in the first quarter. The first, April 1st, we activated fees on our current real estate fund. So you'll see some growth in the management fees in the second quarter due to us activating the fees on that fund. So we'll benefit from that and see some growth in the second quarter in terms of management fees.

Speaker Change: Yes, Michael so.

Speaker Change: When we put out are a $40 billion ish of inflows last year for 2025 that was an inflow number so it would it would include the.

Brian Bedeau: Very active on on realization, so we feel pretty good about C. P. Nine.

Speaker Change: The flow from from Fortitude, So we had $14 billion in the quarter, which compares to $5 billion first quarter last year, so almost <unk>.

Speaker Change: Thank you. Our next question comes from Michael Cyprus with Bornstale. Your line is open alright. Thanks for taking the follow up question just wanted to circle back just around the fundraising targets. I think you guys mentioned 40 billion for the year, 6%. After we growth do those include the blocks from 40.

Speaker Change: And on an LTM basis, we're at $50 billion. So we feel very good about our fundraising capabilities.

Patrick Davitt: Thank you. Our next question comes from Patrick Davitt with Autonomous Research. Your line is open.

John Redett: Look, we're still in the market raising money, so we can't really comment on ultimate size. I would just say what we said in the past, we expect it to be bigger than the predecessor. Thank you.

Patrick Davitt: Hey, thanks for the follow up.

Patrick Davitt: As you pointed out had some bigger realizations from CPE seven and one <unk> how should we think about the triggers for that fund to start actually generating cash carry and more specifically within that does the IRR needs to be higher than 8% before you would feel comfortable doing that thank you.

Brian Bedell: Our next question is a follow-up from Brian Bedell with Deutsche Bank.

John Redett: Your line is open. I just wanted to come back on Fund 9. Given you're 70% committed on Fund 8, just the thought process around being back in the market for that fund, could that be as early as 4Q in terms of a potential fundraising? I guess in your fundraising target for this year or what you've outlined, is any consideration of Fund 9 within that target? But there's nothing in Fund 9 for that target that we put out earlier this year, and right now we're still holding to the fourth quarter kickoff for Fund 9, but we're not wedded to it.

Speaker Change: Phone number so it would it would include the the flow from from four to suit. So we had 14 billion in the quarter, which compares to 5 billion first quarter last year. So almost three acts in an L. T M basis, we're at 50 billion. So we fee.

Speaker Change: Yes, I mean look.

Speaker Change: It's very hard to predict exactly when a carry fund hits Kerry.

Speaker Change: Our fundraising capabilities.

Speaker Change: I would say, we're certainly well on that path.

Speaker Change: Thank you. Our next question comes from Patrick David with Autonomous Research. Your line is open.

Speaker Change: Performance in that fund, you're referring to <unk> seven.

Speaker Change: <unk> continues to improve and we've had a lot of realization activity and quite frankly, the pipeline of realization activity is heavy in that fund. So we feel very good ultimately when that fund hits. Its full carry is hard to exactly predict but it's probably at some point.

Speaker Change: Hey, Thanks for the follow up at as you pointed out had some bigger realizations from C. P. Seven Q1I was should we think about the triggers for that fund to start actually generating cash carry a more specifically within that.

Speaker Change: Over the next kind of 12 months.

Speaker Change: Maybe higher than 8% before you would feel comfortable doing that thank you. Yeah. I mean look I. It's it's very hard to predict exactly when a carry fund hits carry I would say, we're we're certainly well on that path I mean, the performance in that fun.

John Redett: The environment stays like this. We'll see how deployment goes in Fund 8, but we're very, very focused on the performance of Fund 8, which, as you've seen, has cracked up quite beautifully. So we'll see how we go on Fund 9, but it's going to give or take three to six months. That's your target zone, but there's nothing in the model for Fund 9. Yeah, there's no impact to this year for Fund 9, but I would say there's nothing we're seeing day-to-day that would suggest we're not going to put it in the market when Harvey said.

Speaker Change: Thank you. This concludes the question and answer session I would now like to turn it back to Daniel Harris head of Investor Relations for closing remarks.

Speaker Change: Thank you for your time. This morning, if you have any follow up questions feel free to reach out to Investor relations. After the call and we look forward to talking to you again next quarter.

Speaker Change: Continues to improve and we've had a lot of realization activity in quite frankly, the pipeline of realization activity is heavy in that fund. So we feel very good ultimately when that fund hits hits full carry is hard to.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

John Redett: Again, the performance in CP7 and CP8 continues to track ahead of our expectations, and we've been very active on realization, so we feel pretty good about CP9.

Speaker Change: Over the next kind of 12 months.

Michael Cyprys: Thank you.

John Redett: Our next question comes from Michael Cyprys with Morgan Saling. Your line is open. Thanks for taking the follow-up question. I just wanted to circle back just around the fundraising target. I think you guys mentioned $40 billion for the year, 6% FRE growth. Did those include the blocks from Fortitude? I think in the quarter you had $4 billion, and I think there's maybe another $4 billion coming in the second quarter. I just wanted to clarify if that's embedded in the $40 billion fundraising, 6% FRE growth for the year.

Speaker Change: Thank you. This concludes the question and answer session I would now like to turn it back to Dan Harris head of Investor Relations for closing remarks. Thank you for your time. This morning. If you have any follow up questions feel free to reach out to Investor relations. After the call and we look forward to talking to you and next quarter.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

John Redett: Yeah, Michael. So when we put out our $40 billion-ish of inflows last year for 2025, that was an inflow number, so it would include the flow from Fortitude. So we had $14 billion in the quarter, which compares to $5 billion first quarter last year, so almost three-act. And on an LTM basis, we're at $50 billion. So we feel very good about our fundraising capabilities.

Patrick Davitt: Our next question comes from Patrick Davitt with Autonomous Research. Your line is open. Hey, thanks for the follow-up. As you pointed out, I had some bigger realizations from CP7 and 1U. How should we think about the triggers for that fund to start actually generating cash carry? And more specifically, within that, does IRR need to be higher than 8% before you would feel comfortable doing that? Thank you.

John Redett: Yeah, I mean, look, it's very hard to predict exactly when a carry fund hits carry. I would say we're certainly well on that path. I mean, the performance in that fund you're referring to, CP7, continues to improve, and we've had a lot of realization activity, and quite frankly, the pipeline of realization activity is heavy in that fund. And so we feel very good. Ultimately, when that fund hits full carry, it's hard to exactly predict, but it's probably at some point over the next kind of 12 months. Thank you.

Operator: This concludes the question and answer session.

Daniel Harris: I would now like to turn it back to Daniel Harris, head of investor relations, for closing remarks. Thank you for your time this morning. If you have any follow-up questions, feel free to reach out to Investor Relations after the call, and we look forward to talking to you again next quarter.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: And thank you for standing by welcome to the Carlyle Group first quarter 2025 earnings Conference call.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session you will need to press star one one on your telephone.

Speaker Change: You will then hear an automated message advising your hand is raised.

Speaker Change: To withdraw your question. Please press star one one again.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to your Speaker today, Daniel Harris head of Investor Relations. Please go ahead.

Speaker Change: Thank you Daniel Good morning, and welcome to Carlyle's first quarter 2025 earnings call with me on the call. This morning is our Chief Executive Officer, Harvey Schwartz, and our Chief Financial Officer, and head of corporate strategy genre that.

Speaker Change: Earlier. This morning, we issued a press release and a detailed earnings presentation, which is available on our Investor Relations website.

Speaker Change: This call is being webcast and a replay will be available.

Speaker Change: We will refer to certain non-GAAP financial metrics. During today's call. These measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. We have provided reconciliation of these measures to GAAP in our earnings release to the extent reasonably available.

Speaker Change: Any forward looking statements made today do not guarantee future performance and undue reliance should not be placed on them.

Speaker Change: These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the risk factors section of our annual report on Form 10-K that could cause actual results to differ materially from those indicated Carlyle assumes no obligation to update any forward looking statements at any time.

Speaker Change: In order to ensure participation by all those on the line. Please limit yourself to one question and return to the queue for any additional follow ups and with that let me turn the call over to our Chief Executive Officer Harvey Schwartz.

Harvey Schwartz: Thanks, Dan and good morning, everyone and thank you for joining us all.

Harvey Schwartz: Ill quickly touch on this quarter's record results and then share my perspective on the macro environment.

Harvey Schwartz: First quarter performance was quite strong hitting record levels.

Harvey Schwartz: Quarters highlights include record fee related earnings of $311 million, that's up 17% year over year record FRE margin, 48%.

Harvey Schwartz: Our highest level of distributable earnings in several years at $455 million and record assets under management of 453 billion.

Harvey Schwartz: Across the board for margin expansion FRE growth to investment performance and fundraising you can really see the strategy coming together as we progress towards our goals for this year and beyond.

Harvey Schwartz: Now, let me shift and talk about how we're thinking about the current environment.

Harvey Schwartz: We ended the year with a very high level of market optimism and very high expectations.

Harvey Schwartz: Markets were fully risk on.

Harvey Schwartz: Of course, as we saw the recently announced trade policies very quickly impacted investor sentiment and risk appetite.

Harvey Schwartz: With respect to our global portfolio, we think about this in terms of first order effects and knock on impacts.

Harvey Schwartz: In fact, our first order effects.

Harvey Schwartz: The effects of the tariffs are contained to a limited number of investments.

Harvey Schwartz: The majority of our global private equity portfolio is services oriented with 80% of companies based in the U S.

Harvey Schwartz: Second order effects on the economy are beginning to emerge.

Harvey Schwartz: As we've seen in some of the recent economic data, but given where we are in terms of the policy implementation. The long term effects of the trade policy or too difficult to forecast at this point.

Harvey Schwartz: From a carve out perspective, we are exceptionally well positioned to lead in this environment.

Harvey Schwartz: Our investment horizon, and our capital base, our long term and our capital light model affords us the ability to capitalize on compelling new investment opportunities.

Harvey Schwartz: In a dynamic environment like today.

Speaker Change: Did experience scale.

Speaker Change: Rand and a diversified platform to meet the shifting demands of private capital and serve the needs of our clients.

Speaker Change: With $84 billion of dry powder, we are well positioned to be active in this market environment as opportunities emerge.

Speaker Change: Although we are going through this period of uncertainty the macro trends driving demand for private capital remains strong and likely will be reinforced over the coming years.

Speaker Change: Over the past two decades, the number of public companies in the U S has been cut nearly in half while the number of private companies has increased by more than fivefold.

Speaker Change: For investors looking to drive returns and capture the next generation of market growth private market access has never been more important.

Speaker Change: These structural shifts are already showing up in carlyle's results.

Speaker Change: We are seeing strong momentum across our key growth areas and believe the trends reshaping global markets will continue to play to our strengths.

Speaker Change: Now I'll touch on our businesses and growth areas that we've been focused on over the past two years.

Speaker Change: Carlisle up less generated record FRE in the first quarter nearly double the first quarter last year.

Speaker Change: AUM in this business grew 12% over the past year to a record $89 billion.

Speaker Change: The business continues to diversify across client solutions. A good example of this is our latest portfolio finance funds, which held its final close last month at more than $4 billion.

Speaker Change: More than three times the size of its predecessor.

Speaker Change: In global credit quarterly fee related earnings surpassed $100 million for the first time, an increase of nearly 50% from last year.

Speaker Change: The significant demand for private credit solutions continues to drive inflows in our investment opportunities continue to expand.

Speaker Change: Recently, our private credit team has leaned into significant opportunities in European lending.

Speaker Change: And that competition is leading to strong relative value.

Speaker Change: Private credit deployment is up 150% year over year.

Speaker Change: We also had a strong start to the year in insurance with Florida, and announcing more than $8 billion in reinsurance transactions.

Speaker Change: Fortitude annuity reinsurance agreement tire life insurance company with their six transaction in Japan.

Speaker Change: Carlyle's long term track record track record in Japan, alongside strong investment origination capabilities have helped forward it to develop a leading presence in the market.

Speaker Change: Our pipeline of growth opportunities remains healthy as insurance companies seek to transfer risk and improve capital efficiency.

Speaker Change: And our strategic initiatives to grow capital markets continues to accelerate.

Speaker Change: Over just the past six months, we generated a record $150 million in fees.

Speaker Change: We see substantial opportunity for long term growth in this business, although the near term market environment may slow the pace of activity.

Speaker Change: Moving on to global wealth as you know two years ago, we prioritize this initiative by aggressively adding to the team and leveraging our global brand to drive growth.

Speaker Change: As a result, evergreen inflows have doubled over the past year.

Speaker Change: In global private equity, we remain focused on driving value in our portfolio of companies and monetizing assets.

Speaker Change: We've generated $20 billion of realizations over the last 12 months.

Speaker Change: In the first quarter, we successfully IPO <unk> technologies in India.

Speaker Change: This was the largest ever sponsor backed IPO in India, and the largest technology services, the IPO globally and more than a decade.

Speaker Change: We also closed a nearly $1 billion of secondary sale of shares of standard Arrow and a $1 4 billion cell bio asset.

Speaker Change: John will touch on this in more detail.

Speaker Change: We saw continued appreciation in our latest vintage us buyout fund and the underlying portfolio of companies continue to grow EBITDA at double digit rates through the first quarter.

Speaker Change: The portfolio remains well positioned in the current environment.

Speaker Change: Hello, close Carlyle is much more diversified today than it has ever been.

Speaker Change: During these periods of market volatility breath of our platform enables us to mobilize where opportunities present the present itself.

Speaker Change: We will continue to invest in our growth leverage our long term investment horizon and capture value creation opportunities in the private markets.

Speaker Change: With that let me now turn the call over to John who will walk through our results in more detail.

John: Thanks Tommy.

John: Morning, everyone.

Harvey Schwartz: As Harvey said, our first quarter results were strong we delivered record FRE.

Harvey Schwartz: FRE margin and assets under management.

Harvey Schwartz: Day of $455 million was a record start to the year.

Harvey Schwartz: As a management team, we're focused on accelerating long term growth.

Harvey Schwartz: While also achieving our near term goals.

Harvey Schwartz: We remain comfortable with our ability to meet our 2025 financial targets.

Harvey Schwartz: But realize the situation is fluid and the market backdrop is uncertain.

Harvey Schwartz: We continue to invest in our businesses to better position Carlyle for long term success.

Harvey Schwartz: We finished the first quarter with 453 billion of AUM.

Harvey Schwartz: Up 6% year over year.

Harvey Schwartz: Growth was driven by $50 billion of inflows over the past year.

Harvey Schwartz: Including $14 billion in the first quarter alone.

Harvey Schwartz: We generated record FRE of $311 million in the first quarter.

Harvey Schwartz: 17% higher than the first quarter last year.

Harvey Schwartz: Overall, we saw strong growth in Carlisle op invest.

Harvey Schwartz: In global credit.

Harvey Schwartz: While global private equity was in line with expectations.

Harvey Schwartz: Transaction fees more than tripled in the quarter compared to the same period last year.

Harvey Schwartz: The $150 million in transaction fees, we generated over the past two quarters is more than any prior year.

Harvey Schwartz: Carlyle will help invest generated $66 million in FRE in the first quarter nearly double the level from the first quarter of 2024.

Harvey Schwartz: Management fee growth of nearly 40% year over year led to a record FRE margin.

Harvey Schwartz: 58%.

Harvey Schwartz: With good momentum across all areas of Carlisle ALP invest.

Harvey Schwartz: With strong inflows into our secondaries platform portfolio finance.

Harvey Schwartz: And our global wealth strategy.

Harvey Schwartz: In global credit first.

Harvey Schwartz: First quarter revenue of $232 million grew 28% year over year.

Harvey Schwartz: Driven by capital market fees.

Harvey Schwartz: Global credit also experienced strong first quarter inflows of $7 5 billion.

Harvey Schwartz: The rapid growth of Carlisle help invest in global credit has driven these businesses to account for 50%.

Harvey Schwartz: Of our firm wide FRE.

Harvey Schwartz: Compared to 34%.

Harvey Schwartz: 2023.

Harvey Schwartz: In global private equity.

Harvey Schwartz: <unk> were in line with our expectations given expected step downs in several funds.

Harvey Schwartz: Management fees should increase in the second quarter as we recently activated management fees.

Harvey Schwartz: On our latest U S real estate fund.

Harvey Schwartz: A highlight in our private equity business as U S buyout.

Harvey Schwartz: Our largest flagship strategy, which continues to perform particularly well.

Harvey Schwartz: The last two vintages, each appreciated 2% to 3% in the quarter.

Harvey Schwartz: At around 18% over the past year.

Harvey Schwartz: Along with this depreciation we also returned significant capital to investors.

Harvey Schwartz: Across all of our U S buyout strategies.

Harvey Schwartz: We returned nearly 8 billion of proceeds to investors over the past year.

Harvey Schwartz: More broadly across the Carlyle investment platform, we returned 31 billion in proceeds more than 40% higher than the prior 12 month period.

Harvey Schwartz: This is indicative of the strength of our diversified global investment portfolio.

Harvey Schwartz: And further upside when markets are more active.

Harvey Schwartz: In our evergreen strategies, we have.

Harvey Schwartz: It's two 6 billion in AUM up 20, 27% over the past year.

Harvey Schwartz: And we continue to actively invest in our wealth capabilities.

Harvey Schwartz: With head count in this area, increasing by 100% over the past year.

Harvey Schwartz: This remains a major driver of long term growth for Carlyle.

Harvey Schwartz: Wrapping up.

Harvey Schwartz: While market conditions remain dynamic Carlyle is built to perform across market cycles.

Harvey Schwartz: Our nearly 40 year track record.

Harvey Schwartz: Long term capital base and.

Harvey Schwartz: And global scale provide a strong foundation for continued growth.

Harvey Schwartz: We are confident in our ability to deliver attractive results for shareholders.

Harvey Schwartz: Continuing to be a trusted partner.

Harvey Schwartz: To our investors.

Harvey Schwartz: With that let me turn the call over to the operator for your questions.

Harvey Schwartz: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Harvey Schwartz: To withdraw your question. Please press star one again in the <unk>.

Harvey Schwartz: Interest of time, we ask that you please limit yourself to one question.

Harvey Schwartz: May rejoin the queue. Please standby, while we compile the Q&A roster.

Ben Buddish: Our first question comes from Ben <unk> with Barclays. Your line is open.

Ben Buddish: Hey, good morning, and thanks for taking the question.

Speaker Change: Good morning.

Speaker Change: Good morning, Harvey, Let me just start out with something high level I mean, you talked a little bit about the macro backdrop just given your portfolio is quite global can you talk a little bit about how you're viewing the impact of trade policy and tariffs on investment deployment activity.

Speaker Change: And how is that maybe feeding into LP discussions getting you mentioned in Q1.

Speaker Change: But especially earlier in the year you had confirmed a lot of capital.

Speaker Change: Does that sort of impacting LP discussions.

Speaker Change: More mortgage.

Speaker Change: Yes.

Speaker Change: Sure so.

Speaker Change: <unk>.

Speaker Change: I think actually just stepping back for a second and I talked a bit about some of this in my prepared remarks.

Speaker Change: We obviously came into the year with very very high expectations.

Speaker Change: The tariff policy implementation.

Speaker Change: I think market participants, obviously were caught a bit flat footed with the initial announcements I think subsequent to that the administration has done a thoughtful job.

Speaker Change: Bringing together.

Speaker Change: How they're thinking about the broader implementation of the full policy set.

I would not milking earlier this week and I heard the Treasury Secretary you talked about the three legs of the stool and I think that the articulation of the understanding across market participants is really.

Speaker Change: Having a much more positive impact on what was initial sentiment reaction now more broadly I would say.

Speaker Change: Discussions with Lps.

Speaker Change: There is a sort of a sort of short term focus that everyone has in the marketplace and I talked to more <unk> and Ceos in the last couple of weeks maybe in my entire career I would say so obviously, there's a lot of focus on headlines.

Speaker Change: Expectations day to day, because the market just wants to see sort of where the policy is headed in terms of progress.

Speaker Change: But I would say broadly speaking.

Speaker Change: This is not an environment, where I would say is either a red light Green light I would say it's sort of.

Speaker Change: Different shades of yellow.

Speaker Change: But the vast majority of the <unk>.

Speaker Change: The senior folks have spoken in the last several weeks.

Speaker Change: I would say.

Speaker Change: Cautiously opportunistic.

Speaker Change: So very much looking for opportunities to deploy capital.

Speaker Change: And one variant or another each conversation finishes with hey, we're open for business.

Speaker Change: And that Shouldnt really be surprising when we think about where the S&P is relative to the start of the year.

Speaker Change: And where capital markets are but I would say that people are.

Speaker Change: <unk>.

Speaker Change: Deploying capital, but they are being very very thoughtful about it and the more progress we see on policy implementation, obviously, the more positive reaction will happen in the marketplace now the one big question out there that everyone's focused on as are we is where it's the dialogue with China because it is hard for market participants include.

Speaker Change: US to see the backdrop in terms of second order effects on the economy, if the U S and kind of the two largest economies in the world are in some very long sustained trade embargo or trade war.

Speaker Change: Hard to imagine.

Speaker Change: That really being good for the global economic environment. So thats really the biggest question on People's minds, and they want to see progress.

Speaker Change: Thank you. Our next question comes from Alex <unk> with Goldman Sachs. Your line is now open.

Alex Blostein: Hey, good morning, everybody. Thank you for the question as well.

Alex Blostein: So I wanted to double click into private equity for a second so very good momentum outside of private equity. Obviously, you talked about op invest in real estate and credit all of that is moving along nicely, but given the fact that theres just so much focus for you and really the industry broadly as well on DPI performance and just the elongated sales.

Alex Blostein: All we're seeing private equity how are you thinking about the corporate <unk> franchise for the next 12 to 18 months, what does it mean for <unk> and in terms of both sizing and timing. Thanks.

Alex Blostein: So on timing I don't see any major adjustments to us going back into the market on <unk> nine and that will really be driven by our pace of deployment you saw that we were very active.

Alex Blostein: In deploying capital in <unk> last year, I think more importantly across the private equity complex a couple of factors one.

Alex Blostein:

Alex Blostein: Towards the end of this year beginning of next year, we will be launching our wealth platform and that'll bring in a whole separate stream of capital. There's a lot of appetite for Carlyle on platforms globally across all of our solutions.

Alex Blostein: In terms of the dynamic I'll tell you the way we're thinking about it and we are managing our business is.

Alex Blostein: Obviously, our teams have done a really good job and John highlighted U S buyout in terms of the portfolio.

Alex Blostein: And the amount of capital we return across our private equity complex really makes us a bit of a positive outlier. So we've been actively returning capital I mean, some top my head if I think about the last nine months or so we took standard arrow public any of us the third largest IPO.

Alex Blostein: The year in the U S. We did hex aware, which John spoke about in EMEA, which is the largest ever private equity owned company in India with <unk> largest ever private equity owned entity in Japan, and so our teams.

Alex Blostein: Had been navigating this market environment I think quite thoughtfully.

Alex Blostein: In terms of private equity broadly I think.

Alex Blostein: The marketplace will continue to see some headwinds I think that those headwinds if you have scale like we do and diversification I think it's much more.

Alex Blostein: Navigated, but we're really.

Alex Blostein: Quite proud of the performance, particularly our U S buyout business I know John what would you add yes look this is a business we've talked a lot about in the past we made some changes to our U S. Private equity business I would just echo what Harvey said, we're very happy with the performance in our U S buyout business again, good depreciation this quarter, if you look at it.

Alex Blostein: Last 12 months around 18% for our two latest vintages. So the performance is tracking to our expectations and also just what Harvey said, we have been very active on the realization front.

Alex Blostein: Harvey listed a couple of those and quite frankly, we even had a realization in our Asia Asia buyout business post trade Liberation day, we sold a big block of.

Alex Blostein: The company, we owned in India. So, we're continuing to execute and that's what we're focused on.

Speaker Change: Thank you. Our next question comes from Patrick Davitt with Autonomous Research. Your line is open.

Patrick Davitt: Hi, good morning, everyone.

Speaker Change: So nice to see you had some chunky insurance wins, but.

Speaker Change: How should we be thinking about those relative to the kind of roughly 40 billion flow God youre expecting for the year is this counting towards that or should we consider it incremental to that and then more specifically within that blood track could you update us on how the wealth product flows are tracking how the redemption requests are tracking since liberation.

Speaker Change: Thank you.

Speaker Change: Yes so.

Speaker Change: When we put out the $40 billion ish.

Speaker Change: In the fourth quarter.

Speaker Change: <unk>.

Speaker Change: We view that $40 billion is a flow number so you should assume the 14.

Speaker Change: <unk> to that $40 billion low number we put out there.

Speaker Change: In terms of.

Speaker Change: Well I would say we've had very very strong performance again this is an area.

Speaker Change: We have been talking about a lot, we're very focused on making investments in.

Speaker Change: In that space fundraising in the quarter was up 40% the amount we have in the evergreen products is up 70% year over year. So we're very pleased with the progress we are seeing in wealth.

Speaker Change: We only really have two products in the market that sea Tac, our credit product and cap them, our secondaries product and if you look at the trajectory of.

Speaker Change: Cap them, it's really quite impressive in terms of the fund raising.

Speaker Change: In terms of kind of post post trade policy shift.

Speaker Change: I'd say the data set we're looking at it is limited to April, but we have not seen anything in the data that would give us pause April actually was a good month, so based on what we're seeing.

Speaker Change: We feel pretty good.

Speaker Change: Thank you. Our next question comes from Brian Bedell with Deutsche Bank. Your line is open.

Brian Bedell: Great. Thanks, Scott. Thanks, Good morning folks thanks for taking my question.

Speaker Change: Maybe just shifting to expenses very good FRE margin in one queue.

Speaker Change: It seems like its tracking a little ahead of the run rate expected for the year. So maybe if you can talk John a little bit about.

Speaker Change: About that run rate.

Speaker Change: Is it.

Speaker Change: Is this a good run rate for G&A as we move through the year.

Speaker Change: And should we be expecting any additional expenses related to the retail.

Speaker Change: Wealth efforts.

Speaker Change: Yes, so I would say the 48% FRE margin, we're very happy with where that margin is in.

Speaker Change: We've been very very we've talked a lot about how.

Speaker Change: We don't see expenses as a way to get that margin higher we're much more focused on driving that margin higher.

Speaker Change: Our growth.

Speaker Change: We're investing in the business heavily as we said on the last earnings call. The 6% FRE growth. We gave for 2025 really reflects continued investment in the business. So the 48% youre seen in the quarter reflects heavy investment in the areas we've talked about in the past where we see.

Speaker Change: Growth coming from so I wouldn't expect that.

Speaker Change: To escalate I think it's pretty well planned out throughout the year.

Speaker Change: Corporate G&A.

Speaker Change: The first quarter number was clearly higher than the first quarter of last year I would just say the first quarter of last year had some kind of a one off positive. So I don't think it's a good reference point.

Speaker Change: But I'm happy with where G&A is I think it's pretty close to a good run rate.

Speaker Change: Type number I kind of think of.

Speaker Change: 100 ish is.

Speaker Change: <unk> is a good run rate G&A again fourth quarter.

Speaker Change: If you compare first quarter against fourth quarter fourth quarter is always a bit elevated but we're very pleased with where G&A is in kind of 95 to 100 ish is kind of how I think about a run rate.

Brian McKenna: Thank you. Our next question comes from Brian Mckenna with citizens. Your line is open.

Brian McKenna: Thanks, Good morning, everyone. So Alison Vasquez experienced some pretty impressive growth over the past year and it seems like the business remains well positioned moving forward, but how should we think about related fundraising for the balance of this year I know capex will be in the market.

Brian McKenna: What else will you be raising capital for and then just bigger picture if I look at our invest FRE.

Brian McKenna: It now represents 20% plus a firm wide FRE, so where can this contribution go longer term.

John: So well I'll kick off and then I'll hand, it over to John for a bit of it.

Brian McKenna: Detailed but I would say that.

Speaker Change: One of the initiatives over the past few years was really to better integrate the op invest team into the broader strategy of the firm.

So that included obviously driving the cap M solution through the wealth channel and really leveraging the entire distribution capability of the firm and so we are really starting to see is the convergence of those strategic efforts plus the great performance by the team I was just in Amsterdam, we celebrated the 20 <unk> anniversary.

Speaker Change: And so.

Speaker Change: Now this is also an area, where lp's globally, regardless of institutions sovereign wealth.

Speaker Change: Or the <unk>.

Speaker Change: <unk> channel, there's huge interest in this category and I would say I expect that to continue.

Speaker Change: For an extended period of time, so as we continue to leverage the brand and the platform I think there is significant upside from here.

Speaker Change: But we're really pleased and obviously all of this has been done across the entire platform organically.

Speaker Change: Yes, the only the only thing I'd add I mean.

Speaker Change: We're a little bit.

Speaker Change: We said, we couldnt be more pleased with how this business is performing I mean, the organic growth rate numbers are are really really strong.

FRE margin is very impressive.

Speaker Change: And look I think the secondary market as a whole.

Speaker Change: Market continues to grow at very elevated levels.

Speaker Change: We think activity levels are going to accelerate given the current market conditions. So we think it's a really attractive space I think the thing you need to think about in terms of this business and its ability to have a sustainable long term growth rate as well.

Speaker Change: We will wrap up fund raising.

Speaker Change: At some point, probably mid year for our secondaries fund, but that funds already 57% committed. So there is a there's a very clear growth path for this business, we will probably be in the market sometime soon with the next vintage of the funds. So.

Speaker Change: The growth rate is kind of impressive looking back but also as you think about this business going forward I really really like the growth path.

Speaker Change: Thank you. Our next question comes from Ken Worthington with JP Morgan Your line is open.

Ken Worthington: Hi, good morning, Thanks for taking the question.

Speaker Change: We're seeing some potential for stress in the endowment sector and the financial media, suggesting their position in private markets could.

Speaker Change: Could decline I guess, maybe first do you think this is a legitimate topic or might it be overblown.

Speaker Change: And assuming it's not overblown can you talk about this from a risk perspective for Carlyle and future fund raising its endowment slow investments in private markets and then the different perspective is what could this mean for ALP invest in your secondaries and wealth business.

Speaker Change: Given your dry powder in fund raising potential there.

Speaker Change: So I don't see the <unk>.

Speaker Change: Dow meant.

Speaker Change: Shifting to some of the bigger headline number that you've seen sort of being broad based or material to the business or the industry. Obviously.

Speaker Change: We just spoke about on the prior question.

Speaker Change: We're one of the leading.

Speaker Change: Providers of capital to our secondaries and co invest platform an album vast and so this in the short term, we will certainly be potentially opportunity for us to deploy capital into.

Into those flows we will see you all those flows as you would imagine there won't be any flow we don't see.

Speaker Change: The brand and the team.

Speaker Change: But I don't see that as being a significant overhang in terms of allocation to private capital.

Speaker Change: I think it is going to be more isolated now that could evolve that my viewpoint today.

Operator: Thank you. Our next question comes from Mike Brown with Wells Fargo. Your line is open.

Mike Brown: Great. Thanks for taking my question.

Speaker Change: So Harvey there's headlines that continue to come out about a large life and annuity provider.

Mike Brown: They are considering some strategic alternatives.

Mike Brown: Wood Carlisle consider some inorganic growth in that space is that something that's kind of interesting to you in terms of the opportunity to manage.

Mike Brown: Something of that asset size.

Mike Brown: Can you just maybe touch on some of the strategic ways. You can approach something like that just given the size and complexity with that at redundant kind of partnership maybe how can that work with fortitude.

Mike Brown: Any interesting color here would be helpful. Thank you.

Mike Brown: Okay.

Mike Brown: So.

Mike Brown: Having been here a bit over two years now I would say initially when I got here obviously.

Mike Brown: We were very focused on repositioning the firm on all the strategic initiatives, we've covered and we feel really good about the progress we've made.

Mike Brown: The momentum in our franchise and so but two years ago I think the notion of doing something inorganic.

Mike Brown: Would have been too soon.

Mike Brown: I would say we're much more front footed in terms of how we would want to think about that but with respect to.

Mike Brown: Our engagement on opportunities broadly.

Mike Brown: It really is just in the corporate finance math and whether it makes sense, we feel really good about the breadth of the platform whether it's.

Mike Brown: Our ALP invest secondaries co invest portfolio finance the credit platform.

Mike Brown: So business everything that's happening in private equity deal. So there is no gun to our head in terms of having an asset class we need to fill in.

Mike Brown: All the growth we've talked about for the past two years, culminating in today, it's 100% organic everything the firm is not so the firm is demonstrating now that we have the power to mobilize organically now back to your question I think with respect to insurance based on obviously I can't talk about any specific transactions, we look at reinsurance space.

Mike Brown: The 400 to partnership and our partners and Fortitude.

Mike Brown: <unk> have really been.

Mike Brown: Fantastic for us and a number of ways.

Mike Brown: Obviously, the pure benefits of the growth in fortitude, and our capital commitment there and our ability to work with great partners.

Mike Brown: In that business, that's kind of the narrow definition of why it's been fantastic. The other reason why it's been fantastic.

Mike Brown: Given us really really great intelligence and asset management capabilities in the insurance space. So working with Fortitude has given us a multiyear advantage in terms of that skill set and as you saw last year as we grow our asset based finance business and the transactions, we've announced and the partnerships. We've established so as all of this is <unk>.

Mike Brown: First together, it's also given us a much more multi dimensional view on how to think about insurance.

Mike Brown: I think in that.

Mike Brown: Maybe underneath your question because I'll just wrap up at this point is.

Mike Brown: Probably underneath your question is this question of Okay capital heavier capital light you Didnt express it that way, but I think that's sort of embedded in your question. So I will tell you the way that we think about it.

Mike Brown: And our board thinks about it it is not so much that capital heavy negative or capital light is positive or vice versa. I think it's a bit of a goldilocks name.

Mike Brown: So there is sort of an optimal point of you want a certain amount of capital, but not too much.

Mike Brown: But we have a preference for staying capital light and if we can solve for capital light I will tell you. When you go through market environments. Like you saw over the past six weeks and you can wholly focused on deployment managing our portfolio and not have to worry about a heavy balance sheet.

Mike Brown: You really see the benefits of that and you can be extraordinarily fun footed with your clients and so strong bias for capital light, but they are at this point I would say any number of ways. We can solve for an accretive acquisition. If it makes sense for us in any part of the business.

Michael Cyprus: Thank you. Our next question comes from Michael Cyprus with Morgan Stanley. Your line is open.

Michael Cyprus: Hey, good morning, Thanks for taking the question I was hoping maybe you could elaborate upon the opportunity set that you see in Japan across your business a lot happening there at the micro level across Japan, just curious if you could speak to some of the opportunities across the buyout business, but then also cross border too and on the credit side as well. Thank you.

Michael Cyprus: Yes, so obviously.

Michael Cyprus: Margaret is an incredibly dynamic.

Michael Cyprus: I'll be in Japan, and a couple of week celebrating our 20 <unk> anniversary.

Michael Cyprus: What one or two firms that have actually stayed committed to Japan for that period of time and the franchise is exceptionally strong exceptionally strong.

Michael Cyprus: Obviously, they grew their funds significantly.

Michael Cyprus: And the most recent fund raise last year and my expectation is that when they are back in the market.

Michael Cyprus: The next couple of years, but thats going to raise will just continue to grow because of demand or LP interest and the opportunity set only continues to look better at least right now.

Michael Cyprus: In terms of I think how do we extend that brand well.

Michael Cyprus: We're doing that in a lot of ways.

Michael Cyprus: <unk> been on wealth platforms in Japan.

Michael Cyprus: Obviously, working with fortitude to leverage their skill set and our brand has been very very powerful you've seen is as I said in my remarks, our sixth transaction. So we're really a leader in the insurance space there, but all of this gets back to the 25 year history of the firm has invested in Japan I will say.

Michael Cyprus: The Japanese market.

Michael Cyprus: <unk> is increasingly dynamic for a couple of reasons, which are a compelling. One obviously is this evolution of companies willing to become more dynamic in terms of their corporate stewardship. So that's fantastic for us again, given our long standing.

Michael Cyprus: <unk> role in the region and our network.

Michael Cyprus: But also there is a real push to extend asset management capabilities and so we can play a valuable role there. So we're super enthusiastic about our position in Japan and enroll in the region.

Bill Katz: Thank you. Our next question comes from Bill Katz with PD Cowen Your line is open.

Bill Katz: Thank you for taking the question good morning, everybody.

Speaker Change: Maybe for John or yourself Harvey you've done a very nice job as you highlighted on the transaction line could you unpack maybe the difference between sort of regular way leverage to deployment versus where you stand in terms of the capital markets and as you look ahead, how should we think about the flight path for growth or for the first six months last six months.

Bill Katz: Levels. Thank you.

Bill Katz: So.

Bill Katz: Yeah. So.

Bill Katz: Again this was a strategic initiative launched two years ago.

Bill Katz: The team here was extraordinary in terms of managing the liability side of the balance sheet at the portfolio of companies, but there wasn't a process in place, we're actually driving value in terms of the capital markets business beyond that so we've protected the.

Bill Katz: Capability set added to it and really.

Bill Katz: Restructure of the incentive.

Bill Katz: Across the firm for driving value through capital markets now what we're not doing is we're not committing a lot of balance sheet. So we're not taking risk. This is really being driven by the execution activity level across the platform, whether it's in private equity credit and.

Bill Katz: Infrastructure.

Bill Katz: It's going to be activity, driven and so quarter to quarter is going to be.

Bill Katz: Youll see it'll be around deployment restructurings and things like that that we do in terms of.

Bill Katz: The portfolio company balance sheets, and how we invest capital but.

Bill Katz: The trajectory here is quite good over the long term.

Bill Katz: A lot of the businesses weren't actually enabled or in a position to actually participate in this and so as we mobilize the firm across this.

Bill Katz: Multiyear growth here, but.

Bill Katz: John said $150 million that we generated just under two quarters would have been the best year ever and this is not in a high velocity environment obviously.

Bill Katz: So hard to put a hard number on it but again I think we're <unk>.

Bill Katz: Super proud of what the team is doing but most importantly, we're not taking any capital risk here. So we're staying capital light in this model.

Speaker Change: Thank you. Our next question comes from Kyle Voigt with <unk>. Your line is open.

Speaker Change: Hi, Good morning, Thanks for taking my question, maybe a controversial.

Speaker Change: Hey, Don just a question on real estate looks like CRP 10 was activated in April and has seven 5 billion committed so.

Speaker Change: Already almost larger than the prior vintage just wondering if you could give us an updated view on the sizing for CRP Tan.

Speaker Change: You could also just tie that into what we could possibly expect for GPU segment management fee step up in <unk> versus <unk> is that fund turns on or even an update to the prior comments for the full year GP management fee trajectory in 'twenty five would be helpful.

Speaker Change: Yes, let me let.

Speaker Change: Let me, let me start with the back end of your question first.

Speaker Change: In our Tpa.

Speaker Change: Segment, you did see.

Speaker Change: Management fees down and that was really driven by we had a step down in two funds one of which was our real estate fund.

Speaker Change: So that was reflected in the first quarter.

Speaker Change: The first.

Speaker Change: April 1st we activated fees on our current real estate fund so youll see some growth in the management fees in the second quarter due to that activity.

Speaker Change: Due to his activating the fees on that fund so we'll benefit from that and see some growth in the second quarter in terms of management fees.

Speaker Change: Look we're still in the market raising money. So we can't really comment on ultimate size I would just say what we've said in the past we expect it to be bigger than the predecessor.

Thank you. Our next question is a follow up from Brian Bedell with Deutsche Bank. Your line is open.

Brian Bedell: Oh, great. Thanks, Thanks for taking my follow up actually I just wanted to come back on.

Speaker Change: <unk> nine.

Speaker Change: Given your 70% committed on fund <unk>.

Speaker Change: Just the thought process around being back in the market for that fund could that be as early as <unk>.

Speaker Change: As for Q.

Speaker Change: In terms of a potential fundraising I guess in your and your.

Speaker Change: Fundraising.

Speaker Change: Yes.

Speaker Change: For this year or what you've outlined is there any consideration of nine within that target.

Speaker Change: But theres nothing in fund nine for that target that we put out earlier this year and right now we're still holding to the fourth quarter.

Speaker Change: Kickoff for fund nine, but we're not wedded to it.

Speaker Change: If the environment stays like this we'll see how the deployment goes in Sunday, but we're very very focused on the performance of Sunday, which as you've seen has tracked up quite beautifully. So we'll see how we go onto a name, but it is going to give or take three to six months that youre target zone, but theres nothing in our model for <unk>.

Speaker Change: There is no impact to this year for about nine but I would say.

Harvey Schwartz: Nothing that we're seeing day to day that would suggest we're not going to put it in the market. When Harvey said again the performance in <unk> seven in CPA continues to track ahead of our expectations and we've been very active on realizations. So we feel pretty good about.

Speaker Change: <unk> nine.

Michael Cyprus: Thank you. Our next question comes from Michael Cyprus with Morgan Stanley. Your line is open.

Michael Cyprus: Hello, Thanks for taking the follow up question just wanted to circle back just around the fund raising targets. Since you guys mentioned 40 billion for the year, 6%. After re growth did those include the blocks from Fortitude I think in the quarter, you had $4 billion and I think there's maybe another 4 billion coming in the second quarter just wanted to clarify if that's embedded in the 40 billion fund raising 6% FRE growth for the year.

Michael Cyprus: Yes, Michael so.

Michael Cyprus: When we put out are a $40 billion ish of inflows last year for 2025 that was an inflow number so it would it would include the.

Michael Cyprus: The flow from from Fortitude, So we had $14 billion in the quarter, which compares to $5 billion first quarter last year, so almost <unk>.

Michael Cyprus: On an LTM basis, we're at $50 billion. So we feel very good about our fundraising capabilities.

Speaker Change: Thank you. Our next question comes from Patrick Davitt with Autonomous Research. Your line is open.

Patrick Davitt: Hey, thanks for the follow up.

Speaker Change: As you pointed out had some bigger realizations from Cps seven and one <unk> how should we think about the triggers for that fund to start actually generating cash carry and more specifically within that does the IRR needs to be higher than 8% before you would feel comfortable doing that thank you.

Patrick Davitt: Yes, I mean look.

Patrick Davitt: It's very hard to predict exactly when a carry fund hits Kerry.

Patrick Davitt: I would say, we're certainly well on that path.

Patrick Davitt: Performance in that fund Youre, referring to <unk> seven <unk>.

Patrick Davitt: Continues to improve and we've had a lot of realization activity and quite frankly, the pipeline of realization activity is heavy in that fund. So we feel very good ultimately when that fund hits. Its full carry is hard to exactly predict but it's probably at some point.

Patrick Davitt: Over the next kind of 12 months.

Speaker Change: Thank you. This concludes the question and answer session I would now like to turn it back to Daniel Harris head of Investor Relations for closing remarks.

Speaker Change: Thank you for your time. This morning, if you have any follow up questions feel free to reach out to Investor relations. After the call and we look forward to talking to you again next quarter.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.