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Date

Friday, Feb. 6, 2026 at 8:30 a.m. ET

Call participants

  • Chief Executive Officer — Harvey Schwartz
  • Chief Financial Officer — Justin Plouffe
  • Head of Investor Relations — Daniel Harris

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Takeaways

  • Fee-related earnings (FRE) -- $1.24 billion, representing a 12% organic growth rate and a record for Carlyle (CG +5.77%).
  • FRE margin -- 47%, an all-time high, up from 46% the previous year, reflecting operating discipline and scalability.
  • Inflows -- $54 billion, 32% higher year over year, surpassing the original $40 billion target and marking the third-best annual result.
  • Assets under management (AUM) -- $477 billion at year-end, a record level driven by investment performance and broad-based fundraising.
  • Distributable earnings (DE) -- $1.7 billion, or $4.20 per share, up 11% from the prior year and the highest since 2022.
  • Quarterly DE -- $436 million, or $1.01 per share, for the fourth quarter.
  • Fee revenues -- $2.6 billion, a record, reflecting a 10% organic growth rate; Carlyle AlpInvest up 46%, Global Credit up 13%.
  • Transaction fees -- $225 million, up nearly 40% year over year and almost triple the level of two years ago.
  • Record capital deployment -- $54 billion deployed across Carlyle during 2025, with $17 billion in the fourth quarter.
  • Available capital -- $88 billion, positioning Carlyle to continue deploying across strategies.
  • Realized proceeds -- $34 billion for 2025, nearly 20% higher year over year and second-best annual result.
  • Capital returned to investors -- $18 billion in 2025, matching 2024 levels, and $1.2 billion returned to shareholders through dividends and buybacks.
  • Private equity IPO proceeds -- Approximately $10 billion over two years; Medline's $7 billion IPO was the largest sponsor-backed and healthcare IPO of all time.
  • Fund appreciation -- Latest U.S. Buyout fund up 17%; Japan buyout funds (vintage 3 and 4) up 60% and 30%; European technology fund up 20%.
  • Carlyle AlpInvest results -- $274 million of FRE, up nearly 60%; $319 million of DE, nearly 70% higher; closed largest-ever secondary strategy at $20 billion.
  • AlpInvest accrued carry -- $656 million at year-end, up 21% year over year.
  • Global Credit segment -- $402 million of FRE, up 21%; DE at $481 million, with realized performance revenue tripling year over year; FRE has grown at a 20% organic CAGR over three years.
  • CLO activity -- 39 CLOs priced in 2025, the most active U.S. CLO manager; $7 billion of CLO inflows, up almost 20%.
  • Lending portfolio losses -- Realized losses averaged only 10 basis points per year over the past decade.
  • Evergreen wealth inflows -- Doubled year over year to a record level, indicating significant scaling in the global wealth business.
  • Software exposure -- Represents 6% of total AUM, calculated using the broadest possible definition.
  • Management commentary -- CFO Plouffe said, "expect that margins will further expand as revenues continue to scale."

Summary

Management provided strategic clarity by highlighting the breadth and durability of fundraising flows across segments and geographies. The launch of the CPAP private equity solution marks the third key product for individual investors, with expansion into retirement channels identified as a long-term growth strategy. Carlyle AlpInvest drove meaningful scale, particularly in secondaries and co-investment platforms, supporting outsized fund performance. The global credit business executed record originations and enhanced platform capabilities by hiring proven leaders, bolstering origination and integration. CLO operations achieved record issuance and inflows, with management stating their performance remains in line with industry benchmarks.

  • Carlyle signaled an impending shareholder update on February 26 to disclose multi-year financial targets and strategic direction without previewing details for 2026.
  • Global wealth team headcount increased by about 50%, introducing new capabilities and appointing a Head of Retirement Solutions to accelerate distribution growth.
  • Transaction fees were emphasized as a structurally improving revenue source due to deliberate investments and a broadened capital markets strategy.
  • Exposure to direct lending and software in CLOs is managed conservatively, with management stating software allocations are "right on top of the index" and not a performance driver.
  • CFO Plouffe said, "we've built our credit business specifically to cover really the full universe of what private credit has to offer, to be diversified and build durable portfolios that, you."

Industry glossary

  • FRE (Fee-related earnings): Operating income from management and other recurring fees, excluding performance-based revenues and carried interest.
  • DE (Distributable earnings): Cash profits available for distribution to shareholders, including fee-related earnings and performance revenues.
  • CLO (Collateralized loan obligation): Structured credit product packaging leveraged loans into securities with varying risk profiles.
  • AlpInvest: Carlyle’s specialized platform for private market solutions, including secondaries, co-investments, and portfolio financing.
  • CPAP: Carlyle Private Access Program, an evergreen private equity product for individual (wealth) investors.
  • Evergreen wealth: Investment vehicles with open-ended structures, enabling continual inflows and redemptions, targeting individual and mass affluent investors.

Full Conference Call Transcript

Daniel Harris: Thank you, Michelle. Good morning, and welcome to The Carlyle Group Inc.'s fourth quarter and full-year 2025 earnings call. With me on the call this morning is our Chief Executive Officer, Harvey Schwartz, and our Chief Financial Officer, Justin Plouffe. 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 on Form 10-Ks, including those identified in the Risk Factors section of our annual report that could cause actual results to differ materially from those indicated. The Carlyle Group Inc. assumes no obligation to update any forward-looking statements at any time. In order to ensure participation by everyone on the call today, 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. Good morning, everyone, and thank you for joining us. 2025 was a record year for The Carlyle Group Inc. We significantly outperformed the targets we identified at the beginning of the year. We delivered record fee-related earnings, up 12% year over year, materially exceeding our original forecast. We also had record FRE margins, 47%. We generated $54 billion of inflows, again significantly outperforming our original $40 billion target. Engagement across the global franchise and all client segments from institutional to wealth continued to build throughout the year. Transaction fees were a record $225 million, up almost 40% year over year.

We closed out the year with record assets under management of $477 billion, driven by strong investment performance and robust fundraising across the platform. Importantly, our 2025 results demonstrate the breadth, depth, and durability of our global business. Before I walk through our results in more detail, let me just briefly comment on the macro environment. Looking back at 2025, despite concerns around shifting geopolitical dynamics, the market proved to be resilient. M&A and IPO activity accelerated as market sentiment improved. 2025 ended with credit spreads near all-time tights, and equity markets at all-time highs. Over the last several years, a lot has been written about low levels of monetizations in the private equity industry.

The Carlyle Group Inc. has proven to be an exception to that narrative. Since 2024, we have been the number one private equity sponsor globally by IPO proceeds, generating roughly $10 billion of IPO issuance over the past two years. This number is more than any other firm in our industry. The most recent example of this is Medline. Medline raised more than $7 billion and an equity valuation of $49 billion, a milestone transaction for The Carlyle Group Inc. and the broader market. This was the largest sponsor-backed IPO of all time, the largest healthcare IPO ever, and the largest IPO of 2025. The transaction was meaningfully oversubscribed, and today's trading is more than 50% above its IPO price.

Medline is a great example of the types of businesses our teams look to invest in—a market leader in their sector with a great management team. Medline has an exceptional track record with more than fifty years of sales growth since inception, and The Carlyle Group Inc. is quite proud to have partnered with Medline's founders and leadership team over the last four years. But it's not just Medline. Standard Aero marked the second largest sponsor-backed US IPO in 2024 and has appreciated approximately 30% since its public offering. We listed two companies in Japan—Aran Breweries and Rigaku. Rigaku was the largest ever sponsor-backed IPO in Japan.

We also IPOed Hexaware, which was the largest ever sponsor-backed IPO in India and the largest technology services IPO globally in more than a decade. While it's clearly worth noting we've been a leader in IPOs over the past two years, what's equally important is the breadth and diversity of these offerings across geographies and sectors. More broadly across our GP portfolio, activity remained quite strong. We returned $18 billion of capital to investors in 2025 and $18 billion in 2024. Our teams remain highly focused on returning capital to our investors, and we expect exit momentum to continue into 2026. All of this has contributed to our strong performance across our corporate private equity funds. Our latest vintage U.S.

Buyout fund appreciated 17% for the year. Our third and fourth vintage Japan buyout funds appreciated 60% and 30%, respectively. Our most recent European technology fund was up 20%. Moving on to Carlyle AlpInvest, 2025 was a record year of growth, reinforcing AlpInvest's position as one of the most influential private market solutions platforms globally. AlpInvest has returned over $10 billion to our investors and invested a record $14 billion, highlighting both the breadth of the market opportunity and the scale at which the platform is operating. We closed our largest ever secondary strategy at $20 billion, continuing to grow our co-investment platform and expanding our portfolio finance strategies.

Demand for secondary solutions remained strong as investors seek liquidity and portfolio optimization. The Carlyle Group Inc. continues to be a meaningful contributor to FRE growth and platform differentiation. In global credit insurance, we continue to see strong momentum across the platform. Direct lending had a record quarter of originations. We continue to grow and invest in the platform, adding key leaders and talent. We've added a new head of direct lending and senior origination professionals, enhancing origination and integration across our private credit strategies. Our performance continues to be strong, with realized losses across the portfolio running at an average of just 10 basis points per year over the past decade. Additionally, we continue our leadership position in CLOs.

Amidst a record level of industry-wide issuance, The Carlyle Group Inc. priced a record 39 CLOs last year. The Carlyle Group Inc. was the most active CLO manager for US activity. CLO inflows of $7 billion in 2025 were up almost 20% from the prior year. I also want to touch on the momentum we have in global wealth. In 2025, we continued to see significant progress in our strategic approach to global wealth. We had another year of record inflows, almost doubling evergreen wealth AUM year over year. Demand was strong across our Evergreen suite. We soft-launched CPAP, our private equity solution for individual investors, in the US with a select group of leading RIAs.

With the launch of CPAP, we've established our three key solutions across each of our businesses, with options to access The Carlyle Group Inc. for credit, secondaries, and now PE. This is all the result of strategic investment that we started to make three years ago. We continue to invest in resources across the entire wealth spectrum, including mass affluent, retail, and retirement. We expanded our wealth organization meaningfully this year, growing headcount by approximately 50% and adding specialized capabilities to support sustained growth across channels. We hired a head of retirement solutions, a new role at The Carlyle Group Inc., reinforcing our conviction that wealth and retirement are long-term growth engines for the firm.

In conclusion, we enter 2026 with strong momentum. In 2025, we delivered on our strategy in a very concrete way—growing fee-related earnings, significantly exceeding our inflows target, deploying a record amount of capital, returning money to investors, and positioning our portfolios to take advantage of a more functional exit environment. We will continue to build on this strategy and foundation we have established over the last several years. Our focus remains on investment performance, disciplined capital allocation, and delivering long-term value for our global investors and shareholders. We also announced that we are hosting a shareholder update in February. We look forward to seeing you there.

At the event, we will share multi-year financial targets and more insights into the strategic direction of the firm. Now, we will continue to build on our success. With that, let me turn the call over to Justin.

Justin Plouffe: Thanks, Harvey. Good morning, everyone. I'd just like to start by saying how excited I am to assume the CFO role and have the opportunity to work more with each of you. And, of course, a big thank you to John Redett for his time and leadership as CFO, for his help and guidance, which has made this transition so seamless. Turning to our results, in 2025, we had our third best year ever in terms of distributable earnings. We generated $1.7 billion in DE for the year, or $4.20 per share. This was up 11% from the prior year and is our highest level since 2022.

For the fourth quarter, we generated $436 million of DE, or $1.01 per share. Fee-related earnings were a record $1.24 billion in 2025, a 12% organic growth rate, driven by sustained operating momentum across the firm. The full-year results significantly exceeded our initial guidance. And for the fourth quarter, FRE was $290 million. Total fee revenues were a record $2.6 billion for the full year, a 10% organic growth rate. Fee revenues were primarily driven by Carlyle AlpInvest, which was up 46%, and Global Credit, which was up 13%. For the quarter, fee revenues were $670 million, an increase of 2% year over year. Our full-year FRE margin was also a record 47%, up from 46% last year.

This margin expansion reflects continued operating discipline and the scalability of our model. Three years ago, we outlined an organic growth strategy which has clearly been successful as we have delivered consistent earnings growth. We continue to invest in priority growth initiatives, such as Global Wealth, insurance solutions, and asset-backed finance, among others, and see significant opportunity in each for continued growth. We remain focused on investing for growth and expect that margins will further expand as revenues continue to scale. In addition to record financial metrics, we had an incredible year of activity across the platform in 2025. Inflows totaled $54 billion, well above our initial guidance and our third best year on record.

Inflows increased 32% year over year, led by Global Credit and Carlyle AlpInvest, which each increased by more than 60%. Evergreen wealth inflows were also a record in 2025, which more than doubled the prior record set in 2024. For the fourth quarter, we generated $9.2 billion of inflows across the firm, with more than half of that total from a diverse set of strategies in global credit. Deployment was a record $54 billion in 2025, up more than 25% versus last year, led by a more than 40% increase at Carlyle AlpInvest and nearly 30% growth in global private equity. We deployed $17 billion in capital in the fourth quarter alone.

With $88 billion of available capital across the firm, we are well positioned to continue deploying capital throughout our business. Realized proceeds totaled $34 billion, almost 20% higher year over year, and our second-best year on record, reflecting improving exit conditions. We returned 17% of beginning value over the past year, significantly higher than the industry average. We realized $12 billion of proceeds in the fourth quarter alone for our fund investors. Turning now to segment performance, Carlyle AlpInvest generated a record $274 million of FRE for the year, up nearly 60%, and almost four times the level from just two years ago. Growth was driven by strong institutional and global wealth fundraising, and continued scale benefits across the platform.

AlpInvest's distributable earnings were also a record of $319 million in 2025, almost 70% higher than last year. The business remains well positioned for further growth as net accrued carry ended the year at $656 million, up 21% year over year. For the fourth quarter, AlpInvest DE was $67 million, up 12% from 2024. In global credit, we delivered a record $402 million of FRE for 2025, up 21% from the prior year. FRE has grown at a 20% organic CAGR over the past three years. Net realized performance revenue tripled year over year, contributing to a record $481 million of DE in 2025.

For the quarter, FRE increased 4% year over year to $102 million, and DE was up 7% to $123 million. Global Private Equity realized over $18 billion of proceeds in 2025, the highest level in the past three years. In addition, we've already signed or closed $7 billion of proceeds in corporate private equity just year to date. Strong appreciation in our two most recent US buyout funds drove net accrued performance revenue to nearly $2 billion. Finally, I'll say a few words on capital management and the balance sheet. We ended 2025 with a strong balance sheet, including $2 billion of cash, over $3 billion of investments, and almost $3 billion of net accrued carry.

Our net accrued carry was up 9% sequentially in the fourth quarter, driven by strong appreciation in several of our largest funds. Together, these assets represent approximately $23 per share of pretax value. And on capital management, we returned a record $1.2 billion of capital to shareholders between dividends and share buybacks during 2025. Looking ahead, we entered 2026 with solid momentum across the platform. We expect continued growth supported by a diversified fundraising pipeline, expansion in global wealth, and improving capital markets conditions. While the macro environment remains complex, it is generally constructive for deployment and realization activity. We look forward to providing additional detail at our 2026 shareholder update on February 26.

With that, I'll now turn the call over to the operator to take your questions.

Operator: Thank you. As a reminder, to ask a question, please press 11. And our first question comes from Alexander Blostein with Goldman Sachs. Your line is open.

Alexander Blostein: Hey, good morning, Harvey. Welcome, Justin, officially to the CFO role. So, Harvey, to your point, The Carlyle Group Inc. showed a lot of momentum in beginning to drive pretty meaningful realizations in the private equity portfolio in 2025. You sound constructive, but, obviously, the environment's changed a bit just in the last couple of days here. Would love to get your thoughts on how you're thinking about sort of sustainability in the monetization momentum into 2026? How dependent are you guys on the equity market exits versus more M&A transactions that you might see in your backlog? Thanks.

Harvey Schwartz: You know, I'd be reluctant to extrapolate the last week's volatility into something that becomes longer stretched. You know, we're all gonna have to see how the market responds to this kind of reallocation of capital and some concerns about capital spending. I'll tell you, we get our best information, Alex. We've talked about this before. From our proprietary data in our portfolio. When we look across all the companies that we own and interact with, the January data looks very good. So if you were just to look at that data, you would feel very good about GDP growth, margins, EBITDA generation.

And so I can extrapolate that, obviously, from our portfolio, given the size of it, to the broader economy in the US and globally. But it looks pretty good. Obviously, the markets have demonstrated some jitters. And we'll all navigate through that. But I would say, in aggregate, again, we're all going to deal with the market environment we get. But credit spreads have moved a bit. There's a bit of hesitation. It's a bit of a, how would I say it? A bit of self-first ask questions later as people readjust their portfolios. But the economic engine feels quite good. Having said that, the markets have demonstrated some fragility, and we've talked about that.

But I don't think that should be too surprising given we're at record highs. But, again, going back to the engine and the performance, it feels very good.

Alexander Blostein: Thank you.

Operator: Our next question comes from Glenn Schorr with Evercore. Your line is open.

Glenn Schorr: Hello there. How are you?

Harvey Schwartz: Great.

Glenn Schorr: So look, you're in an interesting spot to comment on what's going on in perception in the direct lending and credit world because, you know, you have a piece in CPAC, you have a piece in your secured lending fund. But for the most part, you've built a big credit business outside of what's in the line of fire right now, at least publicly. Right? So in your CLO and your ABS business. So my gut is, forgive me for putting words in your mouth, you've been probably thinking about having a bigger presence in the direct lending world over the last couple of years as you've seen the growth. And software exposure excluded.

I'm curious how you think about the state of play, how you think about credit quality and exposures out there, and more importantly, how does any of this inform how you're thinking about growing your credit platform and including a bigger presence in the wealth channel? Thanks. Appreciate the thoughts.

Harvey Schwartz: Hey. Thanks, Glenn. Well, maybe, if need, I'll let Justin fill in some details on the credit business because he was a key driver of building that over the last twenty years. But what I would say with regards to how we're being informed by all this, there was a lot of discussion last year about direct lending. The marginal market participants coming in and driving spreads tighter and maybe terms a bit too aggressively. Ironically, when I showed up three years ago, some of the conversations I had about had with you were things like, hey. Guys should be bigger in direct money. Now we've been very systematic and thoughtful about how we've been doing that.

But we've really been, I'd say, kind of positioning for the opportunity set to open up like this. And so we feel quite good about it, given our footprint and ability to scale from here. As I mentioned, we've added a new head of direct lending and Justin drove a lot of that along with Mark Jenkins, obviously. New originations. So we feel quite front-footed. On the wealth front, we continue to have the platforms. Actually, we were positive on all our flows in the fourth quarter. One of our best quarters ever across the entire platform, including credit. And we're launching on more platforms. And so again, momentum feels good.

There's just nervousness that has gripped the market for the last couple of days. But again, we're being thoughtful, very thoughtful about deployment. But we feel good about the positioning, the breadth of the franchise. I don't know, Justin, if you'd add anything.

Justin Plouffe: No. That's exactly right. I mean, we've built our credit business specifically to cover really the full universe of what private credit has to offer, to be diversified and build durable portfolios that, you know, should do well through cycles. And, of course, we've been managing credit for more than twenty-five years through multiple cycles. So I think our credit business is really an all-weather business. I get to incredibly well positioned to weather any of this volatility. And we're seeing that result in terms of investors' appetite. As Harvey said, we had significant inflows into our credit wealth funds this quarter. So we're in a good position. We feel really good about our portfolio and our business.

Glenn Schorr: Okay. Art, I don't know what we'd do with the detail that we got yesterday, but a lot of the companies were able to provide the software and related exposure as a percentage of AUM, a percentage of each of the businesses. Are you able to give us a little apples to apples to put things in perspective?

Harvey Schwartz: Yeah. You know, software investing has never been a big driver for The Carlyle Group Inc. You know, as you know, our power allies have been in things like aerospace and defense and healthcare and industrial. So it's never been a huge driver of our business. I think others were giving a percentage of AUM. Ours is 6% of total AUM, which I believe is below others. But, again, not a huge driver of our business and not something we think is problematic.

Justin Plouffe: We try to use the broadest possible definition of that 6%.

Harvey Schwartz: That's right. Exactly. All-inclusive as however you could think about it. Not part of caps, tax, everywhere it could be. But as Justin said, this is not a piston in the engine that has been a key driver of The Carlyle Group Inc.'s strategy.

Glenn Schorr: Thank you, guys.

Harvey Schwartz: Thanks, Glenn.

Operator: Our next question comes from Mike Brown with UBS. Your line is open.

Mike Brown: Great. Good morning, guys.

Harvey Schwartz: Good morning, Mike.

Mike Brown: Hey. So maybe I'll ask on the margin here. So it reached 47% here in 2025. And, you know, looking at the segments, it looks like AlpInvest was the best driver followed by credit. GPE's margin climbed a bit here. AlpInvest had some tailwinds from catch-up fees. And, just looking forward here. So, Justin, you mentioned that margins expect margins can continue to expand. Can you just touch on each segment? Which segment could see the most expansion in 2026? And then, longer term, which segment drives the margin higher longer term? Which one could kinda be the biggest growth engine there?

Harvey Schwartz: So we'll go into more detail of that on the twenty-sixth. I really hope you can join us for that. And we go through the multi-year plan. What I will say about the margin just reflecting on the past three years is I think what the team has done is pretty remarkable because they've managed to invest in the business, add resources, grow headcount, thousand basis points, basically, since really reposition the platform, and drive the margins the day I showed up. So it's been a really remarkable effort. But we'll go into more detail on all those things on the twenty-sixth in terms of the forward outlook.

Mike Brown: Okay. Looking forward to the update. Thanks.

Harvey Schwartz: Thanks so much.

Operator: Thank you. Our next question comes from William Katz with TD Cowen. Your line is open.

William Katz: Okay. Thank you very much. I presume the answer will be see you on the twenty-sixth, but I'll ask it anyway. I was wondering if you could maybe talk a little bit about where you might stand in terms of capital raising, particularly for the Fund IX. Looks like Fund VIII had really good appreciation. Hear your comments on the realization pace and the DPI metrics as well. And then I'm curious, you are running up against the conclusion of your repurchase program. I'm wondering how you're thinking about capital priorities into the new year. Thank you.

Harvey Schwartz: Thanks, Bill. So I'm trying to figure out what I say before I say see you on the twenty-sixth. So a lot of the forward-looking stuff, we are gonna go into, obviously, much more detail on the twenty-sixth. I would say that the client engagement and the fundraising is impressive for a whole host of reasons. But when I think about it and what the team has accomplished over the last couple of years, it really is about the diversification in the business mix both across institutional clients. So it's pension funds. It's insurance. It's sovereigns. And obviously, the strategic pivot in the wealth channel now having basically all three flagship funds up and running, but it's also geographic.

And so you have this nice diversified set across clients and geographies. And opportunities that's really driving all of it and the success of the $54 billion that we bought. I'm not sure on the success of the last couple of years. And so we'll give you more insights. But I would say, again, we feel quite well positioned for forward trajectory. Given the when we look at the fundraising over the next couple of years, flagship vehicles that'll be in the market, but everything that's gone into building and supporting those flagship vehicles and resources we've added. So but will see on the twenty-sixth.

William Katz: Thank you.

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

Patrick Davitt: Hi. Good morning, everyone. Appreciate the software exposure at percent, but I would imagine your CLOs have a fair amount of exposure. And those loans are obviously down a lot. So could you frame the exposure just in the CLO bucket? And to what extent the performance as a result of this recent volatility could impact overcollateralization tests. Thank you.

Justin Plouffe: Our CLO performance has been among the best in the industry. Our team has done a phenomenal job. Our software exposure is right on top of the index. We're not overweight. We're not underweight. And, look, when we invest in software, we've been doing this for many, many years. Right? So we've had disruptive technologies before, and our teams are very, very well positioned to address these. So, look, our CLO business is the best in the world in my view. Their performance has been fantastic. I don't expect this recent volatility to affect them at all.

Harvey Schwartz: If anything, again, I don't wanna make near-term market predictions because things are so sort of, I don't know, one day, we could be tighter. One day, we could be looser. But there may be some technical opportunities here in the marketplace across that business, which give us the opportunity actually to launch a few deals. But again, I think, look, Justin grew up in that business. The team's world-class. But that's a, we're kinda, as he said, right there with the index.

Patrick Davitt: Thank you.

Operator: Our next question comes from Brennan Hawken with BMO Capital Markets. Your line is open.

Mark Pelletri: Thanks for taking my question. This is Mark Pelletri on for Brennan Hawken. Within AlpInvest, the fees proceeding this quarter, I believe that it exceeded the $56 million reported for the full year. Could we read that to imply there was negative catch-up fees this quarter?

Justin Plouffe: Not negative. No. They're not negative catch-up fees this quarter. We did have catch-up fees earlier in the year. But if you actually strip those out, AlpInvest management fees were up 4% quarter over quarter. So the momentum there is still good.

Mark Pelletri: Yeah. Thank you.

Operator: Our next question comes from Steven Chubak with Wolfe Research. Your line is open.

Steven Chubak: Hi. Good morning, Harvey, and welcome, Justin. Appreciate you guys taking my question. So wanted to ask on transaction fees. Had another really strong year. You indicated you anticipate a more active monetization backdrop for next year. With transaction fees just nearly tripling over a two-year time frame, now is there any way for you to help frame the revenue upside or potential? Are there any areas where you feel like you're under-earning? And are there any remaining gaps on the platform in terms of your overall offering?

Harvey Schwartz: We'll give you more insights into that on the twenty-sixth in terms of the forward. I think I like that. You know, you really, yeah. Sorry. But we really kinda nailed it. In terms of what I think is most impressive. Is this basically was almost at zero when I showed up three years ago. What I think it really demonstrates is the ability of the platform, the way the team has led and built this business, and really flexibly focused on a strategic priority. You may remember a couple years ago, one of the work streams I talked about was capital markets and transaction fees.

And I think there were some skeptical people that thought we wouldn't be able to build this out. Short answer is, and we thought it before, there are some gaps. There's still some businesses that because of historical fund documents, will come online. An opportunity set. But we still see upside, but we'll give you more color on that on the twenty-sixth.

Steven Chubak: Fair enough. Thanks for taking my question.

Justin Plouffe: Thank you.

Operator: Our next question comes from Brian McKenna with Citizens. Your line is open.

Brian McKenna: Thanks. Good morning, everyone. So there's clearly a ton of momentum in the wealth channel, and it feels like flows are really beginning to inflect here. I suspect a lot of this has to do with your efforts on the branding front and what The Carlyle Group Inc. has to offer these clients globally. But can you spend a minute talking about the Carlyle story you're telling in the wealth channel today? What's resonating with these distribution partners and their clients? And then are there still opportunities to further enhance your brand in the channel?

Harvey Schwartz: So this is obviously a strategic pivot three years ago. And this is what we've done. First of all, the brand is global. Iconic, long, long history. And that is fundamental to being on platforms being recognized globally. You know, we, David Rubenstein and the team, have been going to The Middle East since the nineties. We were the first to have a franchise in Japan. We stayed in Japan for twenty-five years. They're the only firm that didn't leave. So it's this commitment geographically and the brand recognition which is a cornerstone of an ability to deliver solutions. Obviously, performance is a key driver here.

And the way the teams have thought about driving these solutions is about creating diversification. And so the breadth of diversification is quite important to our clients. And then, of course, there's the client engagement. Working with our partners all over the world, getting very close to the advisors. I personally spend time with advisors. It's quite critical for us to understand their needs. We're not in the business of telling everybody that in every single person's portfolio, they should have private markets, but where it makes sense, we want to make sure that we're providing the most value add in terms of a series of options with diversification that can be durable and deliver over the long term.

So we're very, very focused on that. I will say the team's done a remarkable job of adding resources. We've done things that have been seen very well by the market, like the Oracle Red Bull partnership. So it's been a multi-pronged investment here, which has really driven this. And we think there's very, very long-term upside. And we're enthusiastic to see what happens ultimately in a retirement channel. So again, long-term driver, but we're being very disciplined about it.

Brian McKenna: Great. Thanks, Harvey.

Harvey Schwartz: Thank you.

Operator: Our next question comes from Ben Budish with Barclays. Your line is open.

Ben Budish: Hey, good morning and thank you for taking the question. Harvey, most of the forward-looking questions, I appreciate your saving for the investor update, but I'll ask maybe a two-parter anyway. For specifically for 2026, just curious if you could talk about what you're expecting in terms of management fee growth. I think this year should be a bit of a funky year with some large flagships coming to market later in the year, realization picking up, which could be a headwind to fee-earning AUM in the private equity segment. And so probably, you know, this year, not quite as indicative, at least from a management fee growth perspective, of what I suspect you're gonna talk about.

So curious if you can give any color there. And if you can't, maybe just one other question on the year on the realization side. Given where CP7 and CP8 are, I think there's an expectation we should see realizations before realized performance revenues come in. Just curious how we might think about that trajectory as well over the course of this year. Thank you.

Harvey Schwartz: Yeah. Again, so I don't want to disappoint you, but we're going to go on such a level of detail on this on the twenty-sixth. That I think giving you a fuller picture makes a lot more sense in terms of the strategy and how everything is coming together. Again, the only thing I'll go back to on realizations is how proud we are of our team. You know, a couple years ago, the global private equity leadership really decided that our clients wanted monetizations. They took advantage of a very attractive market environment. It was a very deliberate strategic decision across the platform. As I said before, it was global. We were a market leader.

We monetized more IPO assets than anybody in the world. And so we're quite proud of what they've done. But this is strategically how they position the platform. But we'll go into a whole host of detail on the 26. So I apologize for leaving you a little bit short on the kinda near-term questions.

Ben Budish: Alright. No worries. Thank you.

Operator: Thank you. Our next question comes from Kenneth Worthington with JPMorgan. Your line is open.

Kenneth Worthington: Hi, good morning. Thanks for taking the question. So 2025 was a good environment for the CLO market. How is 2026 looking for The Carlyle Group Inc. here? For CLOs sort of inside and outside the U.S.? And does the software and AI angst sort of impact the outlook here? And then along the same lines, you set up a fund to help with the equity pieces. To what extent are you utilizing that equity, and how much dry powder does that fund still have?

Harvey Schwartz: I'll let Justin get into the details of the CLO business. What I would say on the AI of things, again, this is more of a broad market. Environmental atmospheric, I think. I mean, again, we've seen the fragility in the markets. I think they're really just trying to process what the implication is across markets and industries. But specifically on the CLO business, I'll turn it over to Justin in terms of how we feel about the marketplace and environment.

Justin Plouffe: Yeah. We've had an incredible two years in our CLO business in terms of issuing new deals, but also resetting deals and extending the life of those deals. The team has been incredibly active in that regard. And that makes our business just more durable over time. Now the year started off in CLOs. Constructive, I'd say. Spreads are tight on both sides of the arbitrage. I think we're gonna have another active year. I don't know if it'll be the record year of the last two years, but our team is, in my view, the best in the business. If there is activity in the CLO market, we will be participating.

And the business is really well positioned now that we've extended the life of so many deals over the last two years.

Kenneth Worthington: Great. Thank you.

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

Michael Cyprys: Great. Thank you. Just a question on the credit business. It continues to put up meaningful growth across the overall credit platform. Just curious if you could elaborate a bit on some of the steps you're taking to enhance originations, expand your sourcing funnel, and what actions might you look to take here in '26?

Justin Plouffe: Yeah. We've done a number of things to enhance originations, really not just last year but over the past five years under Mark Jenkins' leadership. I mean, recently, just in the past year, we did hire Alex Chi from Goldman Sachs to come in. Fantastic track record. Thirty years at Goldman in that business. We hired Mike Mayer, who's got decades of experience in origination. We've actually built out our origination team even beyond that just in the last few months. And that's just in direct lending alone. So we've got a fantastic origination engine. We did the most originations we've ever done in credit in the past year in 2025 with almost $30 billion of originations.

So that engine is hitting on all cylinders. And as I said, it's a broad-based durable business. It crosses many, many different parts of the private credit universe. And so no matter where the market goes, we have a strategy. We have a team that we think is ready to take advantage of. So we feel great going into 2026.

Michael Cyprys: Any steps you might take here in '26? Around expanding sourcing from here, or is it all done enhancing the origination machine?

Harvey Schwartz: It's mostly done, but we'll get more into the strategy on the '20 in terms of how we're positioning. Because we do think we have some unique levers we can pull. But in terms of the resource build-out, Justin and the team have done a great job in the past year.

Michael Cyprys: Great. Thanks. Looking forward.

Operator: Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Daniel Harris for closing remarks.

Daniel Harris: Thanks, everyone, for your time today. I know it's been a very busy week. Look forward to seeing all of you on February 26 for the shareholder update. If you have any questions following today's call, feel free to follow up with investor relations. Have a great weekend.

Operator: Thank you for your participation. You may now disconnect. Good day.