CG - Earnings call transcript Q1 2022 | The Carlyle Group Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Carlyle Group First Quarter 2022 Earnings Conference Call. (Operator Instructions) I would now like to turn the conference over to your speaker for today, Daniel Harris, Head of Investor Relations.

You may begin.

Daniel Harris

Thank you, Towanda. Good morning, and welcome to Carlyle's First Quarter 2020 Earnings Call. call and is Curt our the Officer, Chief Buser. on Lee; Kewsong Chief me this our morning Executive With Financial Officer, earnings website at Earlier release are issued we ir.carlyle.com. on presentation, detailed available Relations this which both Investor a our of morning, and press website. is our webcast available being call a replay This be will and on

in accepted We will should financial a be principles. in considered non-GAAP for not or substitute today's as generally during refer measures to accordance measures prepared isolation accounting certain measures call. with from These

including We available. from risks current cause identified measures assumes placed indicated. section earnings be Form inherent Risk undue Factors have report management expectations uncertainties, materially our could not no XX-K to at to that GAAP presentation to and any reconciliations of on involve not differ provided these the those statements on and do of in to them. forward-looking the Any in today performance, annual statements should on update our any extent Carlyle made These time. future reasonably statements obligation results guarantee reliance those based actual forward-looking are and

Turning to results. our

Officer, that, then first by $XXX and million to let ensure per With Lee. earnings call whose yourself this billion. To of declared and million distributable the any participation one please carry all to generated in Chief to to our the fee-related accrued balance for $XXX turn net additional DE $X.XX. the $X.XXX return share. common a Executive quarter, $X.X over common We revenues and earnings, per the limit with Kewsong We morning, of $XXX me on of we queue in follow-ups. share question quarterly call produced million performance For realized grew dividend our

Kewsong Lee

global value. first strategy to for than continue and helped long-term you shareholder to deliver the and by Carlyle's accelerating growth shareholders us everyone, This and diversifying drive Hello, better quarter. ever the Dan. Thanks, before in We're for business our today. our running joining thank firm us investors

XX% over last grew quarter FRE to compared first the Our year.

excellence corporate accrued we platform Our from our over is continued AUM equity. away as are leading total X/X demonstrated witnessed balances, investment private carry of by increasingly and as diversified record

paradigm driving years start on shifts place, pleased to continues to Carlyle's We organic discipline Across platform, Russia, region. business we to drive and global and with major in of And and Having progress, maintaining market including perform. will and in the which and we excellence to The are navigate there rising specifically has paying we quarter. our further not Belarus opportunities pursue And portfolio focus in to over tenuous occurring, are minimal diversification seen direct inflation environment, business. volatility uncertainty. the Carlyle rates. and have significant our portfolio are in XXXX our and Ukraine continue inorganic a conflict our impact construction or growth geopolitical fronts, investment complexities while this, interest have more said exposure on exposure thoughtful and this but the many now off is world and Ukraine importantly, is complex and investment been this to distribution on war the as

particular $X.X led platform XX% were down X%, investment aggregate global estate X%. with real in markets Our private approximately in appreciated X% strength equity, public portfolio saw while by a our increase We balance natural growing infrastructure accrued XX% to performance were resources appreciation billion, our revenue and level appreciation. major and our for our These record a of drivers firm. with the net platform

are Our well. performing credit strategies also

all investment business in half continue less market-leading a the average. across time-tested portfolios broad-based approximately platform, CLO and X%, portfolios the global classes our markets diversified our yielding lending This well than industry is long market are of default performance and to world-class current the Our public positioned approach direct value strategies teams. have over term, are The a continue to currently environment. our the rate markets private and the for outperform to testament asset

going by opportunities. we delivering on insurance, that. to was credit our saw solutions and advisory transactions. strategic growth recent identified executing importantly, the growth announced. a you that also told on we and recently year. be the raise for year our We're past we global capital quarter, CBAM not up capital plan business record for and quarter impact of are our we milestones strategic strategic plan, and we creation our as call, to accretive over of part This billion with strategic from balance our by already quarter's organic new for credit capture we pursuing year million drive evidenced On first also and does we as pleased progress. over shareholder continuing key agreement To of sheet to the inorganic XXXX and generated X a growth you with the $XXX in Fortitude. end, Turning several scale of are major reflects value. told growth the XX% yet strategic FRE our iStar areas growth In to breakout last repurposing in And $X with first and platform a our services insurance what last with acquisitions We're FRE, transactions

Our stakeholders. real of strategic in Fortitude financial the strategy impacts area better in is Carlyle's with has and agreement engine differentiated, and aligns for our This alignment immediate significant new interest will FRE growth all we this total for agreement a basis and growth fee in this stream, with to more Keep forma pro relationship, and mind, a Fortitude now as is have scale. billion. is perpetual in grow which advisory to nature new on a for $XXX approximately providing this continues which AUM,

market, our brand remains equity affecting fundraising of raised which strength fundraising, $X than private partnerships to is billion. we to fuel dynamics and of to LP quarter, differentiator of marketplace the In growth. our Carlyle. for our and related first timing but the crowded Turning platform mostly continues some breadth a a the the funds of Changing in our more private equity the

our diversification We as beyond close demonstrated second strategy. as which continue predecessor final credit increasing as $X.X as a infrastructure fund benefit our opportunities to its private equity billion, fund, within large by as renewable at and almost recently traditional had well from twice traction our

real reported to significant also strategy. added approximately almost deliver million $XXX of want that all Putting year, That million. FRE than for growth of in have by executing we've by I X FRE. the today our is year-over-year. in X Last XXXX, million We Credit that, we strategies. $XXX we Global to now If in years. underscore years. In we is grown products just our have we tripling FRE That delivered the Global is which demands together, more Xx creation our XXXX, the acceleration achieve against asset more rising magnitude just XX% end shareholders. said, delivered FRE Solutions a to FRE in we for it in and launched we meet I'll $XXX projected for value these in will DISH than Investment this. investors And expect and with

investment infrastructure equity doing business. our this global we powerful and in expanding future drive like transforming more investment strategic are renewables, feel private building diversified credit, capture strategic solutions, ability insurance FRE We while our areas and into are growth. helping We global growth firm, global a Carlyle to confident us plan and in and our

continue I managing Our I'd didn't leadership through by be team presented volatility is if opportunity. and on geopolitical landscape, current remiss this complexities and that the to focused the complexity market creates and also stress

our With that it mix continue business cycles to to diversified of over I'll capturing turn expanding increasingly and private positions all an you, perform built across markets us Curt. across have that, the opportunities We well to for stakeholders.

Curt Buser

good Kew's follow in Thank remarks and morning, just I you, want on on to from a presentation three Kew, a comments, focus few our complement ago. but my that up weeks everyone. areas also

our FRE underpins streams. thoughtful start work our our our deliver done the we're broaden earnings First, and our we strong the our earnings provide additional growth, to poised further distributable earnings; in to stream earnings; second, to balance and for and year increased differentiated diversifying distributable ability earnings have third, to portfolio construction strong fee-related underscores

strong adding in a VII equity a million and activity deployment. XXXX, due see XX quarterly which second global March realization before from XXX step-down closed declined be fees In basis recently up a in global most generated quarter, you earnings, of Credit, management quarter fees. the recent on our will Compared Global the FRE half global to earnings. acquisitions in Let's of credit, material fee-related in higher acquisitions that and fees step-up quarter. raise growth XX% on we beginning FRE. activity build new expect to fundraising margin contribution $XXX vehicles, increased driven of a fee-related levels with year-over-year FRE most fees Private a level next to next this private to beginning from with Partners We CBAM, by our strong incremental Carlyle in in equity alongside and and as from any which year additional start completed year throughout buyout closed year our top solid active fourth ago, private is higher the of Fortitude, management than both will throughout significant and capital And begin April high Management line equity, Global the additive should ago. XX%, to increased we of year. X, and the discussing to In points our the continue see growth XX% record by year margins FRE all meaningful our

are the regularly non-GAAP industry. of fund, similar we fee-related such this fund latter This component quarter, presentation products, our our historically our accelerated revenue. The our This disclosures recurring item the Included others from Fund. to results, pass interval management reported CTAC, meaningfully and perpetual core-plus reporting item was performance began a as we real third from is of line in earn in in as anniversary credit performance this line which new our which quarter CPI a through estate. as revenues fees, BDCs we of

quarters be year, this year to revenues others. will expect generate throughout significant We than in though higher item the line every certain

Moving on.

incredibly in well portfolio the X% Kew Our overall quarter, appreciation. with first as summarized, performed

positions, about diversity performance increasing market the Our uncertainty portfolio the only of pressure public XX% currently more offset negative our from make investments of underlying up portfolio construction, impact and than of have companies these strong and downward portfolio, which and our of we aviation the valuations our quarter. area in Ukraine which where is platform portfolio. Russia only meaningful to downward resulted investment direct for across in exposure our funds The credit in Belarus, our

previously accrued Kew than over tripled As balance our of the about portfolio's a that indicated provides net appreciation revenues of $X.X revenue billion. level realized XX% This is drove that $X in has next conditions. X accrual To past net perspective, Carlyle to dependent us expects million the average more put up carry generate our the performance market our and accrued noted, over several of confidence performance record years year-over-year further upon years. to annual

net buyout in our estate first realized U.S. credit revenues quarter's record was $XXX First quarter funds by levels XX% driven and exits and opportunities performance year's from was recent though below last of our up million real fund. Japan funds,

highlighting to to quarter FRE strong utilizing this rate in AUM. in growth million add to earnings the as than in from our close billion and for XX% run we're FRE will rate Now XX% in and that few a up off platform growth That this ends than balance the investment fee transactions in distributable higher the optionality basis Adding look start $XX quarters. both FRE that run transactions annualized a large signed X both we next are more March we to inorganic That's to we growth. several earning $XXX year on XXXX. than discussed expected have be annualized sheet is that and XX% up growth, ago, strategically forward, already acceleration and more in a year drive AUM attractive organic our in driven with

in while earnings margins, larger on longer-term We continuing the perpetual sources now short our grow increasingly invest track are also capital. to growth. business purposefully In access in of our we're term grow diversify and FRE, sum, expand shaping to to

investment Our moving a operator with forward take call active global portfolio let in the With is our questions. over we your performing challenging environment, that, fundraising to me well deployment turn and to and are across platform. exits the

Operator

Our with [Operator first Worthington Ken of from line Instructions] the comes JPMorgan. question

Your line open. is

KenWorthington

Carlyle $XXX it as million, energy say, to morning. Good I ago a to the products? The better. funds. by business expertise meaningfully part in taking debt seen energy Thanks for prices carry Mezz this terms a energy is if real NGP Energy environment limit from, to better, in Carlyle? and your mean, You've months launching question. real for market's extra fund? a for There's in a equity evidenced of my ton think reincarnated and in outlook for we sort and What We've the Hi. XIII, I'll energy ask. got think, of Like new How X in about should reputation anything, have market does increase this one. improved seems investing. of

Kewsong Lee

Ken, been very transition of broad energy and Look, of that question. a energy forms note you're in of focused we alternative we've energy it's investing. for have particular. spectrum that Kew. to Thanks And the lot do on right capabilities across and energy

take me -- So a back. just step let

transition. to is view firm Our of we energy need through this period invest

businesses, by around up trying yet really as think transition. have to products, have a obviously, energy very what's Our this teams set need and a including well in about to business We energy strong traditional of the investing spectrum sector, renewables lens we platform world, infrastructure the keep platform. on happening the on ESG it, -- to an And world-class very security invest can supported all that. and energy carbon a the to we ESG real we with focus look do is in

spectrum, well very the in So going to down come we and all are opportunities and the are prospects to the set up forward. up moving about excited we're invest that

Ken Worthington

you. Thank Great. Okay.

Operator

the question Jefferies. Gerry next with O'Hara line Our comes of from

line Your open. is

Gerry O'Hara

are perhaps -- you a approach little give couple years? the see retail. how Great. you opportunity of what the here you is question perhaps could, just over and next sense firm Perhaps how And Thanks. kind playing of a out us on Kew, if of the

Kewsong Lee

Gerry. capital retail we're our raising important will to. of lot for Sure, broadly supplement attention to are XX% we platform. one Look, approximately retail just in clearly, already us XX% channels to capital the which terms so channel we as reiterate, paying It alternative formation, is know, several of of of a defined. that our fundraising to do And institutional you from be

for well we this is credit, what's Now mostly channel with access of this appropriate -- our need about how product and with I've business. And fits us architecture. thinking of solutions channel estate products said real developing segments before, really this to important the it's and we're the this out

fanfare of CTAC, that's is a which, Credit, $X it, developing other year Carlyle Private raise for for from start expect the Curt run year. rate billion customer channel. a So to about within we've at from retail, are we products strategy, instance, And Credit this growing and all, we've already on retail capital basis, developed Fund before a accessed we've got mentioned the wirehouses, this we Tactical which course, Global called later raising without to much

no be are our we Now with But there's doubt, all to here our that have carefully. given I long-term want this of the to sure and the architecture make credit regulatory our our with real attractive this temper done operational the issues obvious we've as formation and strength considered technology what opportunity patient product very being strategy, access very capabilities to the we're we and capital develop in to clearly successfully similar channel. right And thoughtful brand. organizational going to

Gerry O'Hara

Great. Thank you.

Operator

the Our of with question comes of next Craig America. Bank from line Siegenthaler

Craig Siegenthaler

Good and morning doing well? Hope Kew both Curt. you are

Kewsong Lee

Good morning.

Curt Buser

Hey Craig.

Craig Siegenthaler

Kew on comments private your heard equity the fundraising prepared backdrop. I crowded

general miss also to some or effect are going fundraising some markets risk us seeing time raise just take that it's be little to how denominator you is You from there today? factors to on And impact also this Maybe and three impacting give mean may targets? client a does lower more public of funds competition. some addition just in those the may some de-risking color

Kewsong Lee

timing very more else. private it's products anything obviously, you. demand for for a think just than issue But some I is, are color let upshot me more and strong. bit The The provide market little context Yes. a

So than we've this months, little the quarter. more billion, XX look, billion raised a over last $X $XX just

funds demand we With asset are the had back class some private market the natural seeing areas past over resources, and and real of respect number So, record equity, mostly driven are infrastructure, we platform, that because coming the than success and our large years. has momentum dynamics estate, do the to are have real few thought much faster by strength in private that to part, in real across changing equity credit, there LPs of strong solutions. like private

the where if this So, the really in in step of longer private because have the and to the we've market. to undergone fundraising is going back traditional equity we we a step have taking result making this think And platform going you feel time take of that given products progress point fundraising. is so any and is But firm frames big I our good the array we're back, the breadth on a diversification across a about time. we broad in important

markets. it, It's let other consistently is as Importantly, us this about with demonstrated saw types generating it's type for think quarter, Carlyle of a formation strength huge our brand. back think which our partnership is and across comment, you differentiator in the LPs, Craig, historical important, just add of I strength totality. to just that take these the of The performance performance. we're and of a cycles. in And one which really me capital step

billion seven outside of focused on about times in that's everyone AUM about that fundraised $XX this quarter. $XX mind, $XX billion. that's amount we we and acquired the fundraising, traditional fundraising, is So, keep between but just of That's $XX Fortitude billion CBAM, billion,

capital of for strategies. our fundraising We're looking growth. that to drive being is point the continually capital of So, future inflows aspect one new formation just our

Craig Siegenthaler

Thank you, Kew.

Kewsong Lee

Thanks Craig.

Operator

Thank you.

with Morgan Cyprys the Stanley. question comes line next Michael of Our from

Michael Cyprys

are of valuations? sellers, deployment how And done set that taking up? you in getting how just environment? How perspective just overall, given work? the environment I harder the Hey, or And compelling willing is less how how shaking bit could just today, And just that get opportunity changing? you around a a is give deals adapting to there little to good getting of hoping trending? this sort morning. for question. landscape of capital Is putting Thanks Carlyle? evolving was are the see deals volatile because is Are more the financing you for at tougher

Kewsong Lee

lots as is Yes, broad we're complexities, the raising, ours. of picture I And actually, strategies. asset know, you the globally, issues all favor think, platform, sector platforms It's industry the big expertise. like across you're a type of

pivoting opportunities, So start opportunities go let's to just of the That, to a in we're is in levels adapting re-jigger need where portfolios and higher we business, In volatility, us sure, world continually in volatility. solutions light credit markets, credit are our for business, our are. – in what's LPs particularly flow there's happening for deal the creating our rebalance with and and solutions in increased of and to seeing business. activity their in

As private there's of strategies rate you increasing see credit business. floating rates that our demand based, private credit our which are are rise, strategies in for majority the

for business, real lending positive. So that's demand we're CLO seeing quite and direct all for

strong light this relates And teams because our issues. were to advantage private Europe really a which other everybody I business was commentary, set equity, local as private in architecture platform, platform, have regions. a back our decoupling, to that that's As already up to we really we in of platform, sellers in was it been a like Asia deep full to ever. but have slight and Mike, referred equity seeing M&A the buyers back because environmental in plays the within but step platform, obvious activity, that come our Americas pipelines are Japan as about I are world, the – taking But recalibrate activity thought, of there pause

be regionalization et supply So to to cetera, platform more regional the reassessed, private as equity become more and chains ecosystems important, you're advantage going much in see business. our occurs need have

opportunity it's we pivot, are. of the our the go our complexity – So to culture well this platform and where and over which the with step we is teams we taking back, together, a opportunities adapt years, working comes demonstrated and we've

Michael Cyprys

Thanks so much. Great.

Operator

you. Thank

line the Bank. from Bedell comes Brian of question Deutsche with next Our

Your line is open.

Brian Bedell

that, quarter like for margin think just Thanks the bit, Great. Thanks. incrementally if about about timing might sales that the think that's And operational talk taking Good FRE high than you can second versus we in folks. fee of acquisitions, questions. existing about just and little impact when your very on Maybe and the Kew, architecture the businesses, investing retail the technology or you'll you margin whether more to you margin? if a more marketing – and percent a in be the with surpassing obviously, half. maybe my you just how you think the level, as Curt, morning, then business, just scale in talk FRE product how second scale growth might

Kewsong Lee

for thanks Brian, Hey, your question.

where excited are. and I'm look, So about really pleased we

margins, $XXX we I margin in XXX basis quarter, in And earnings year expand. see million did we So going in nice XX% few up a with on you're will fee-related XX% in expect this that and a in terms And of really this for you what million what weeks from Global I where last to the the ago. points we turn Credit, were particular here that do deals of mention quarter, that's did told really ago second in the the guys past. growth us just FRE over year, is to not to $XXX year. That's

to focus go it the to product XX% in where growth. I secondly, continued I've had and we've see right going. And growth we're going lot about the excited market. said, to and going a that in this the going to before, -- standpoint, said that's I'm get Kew credit. if but over retail about level, FRE this there, it's way optimistic to global growth a to margin to over we're but It's see be up very is year take -- to our And balance on back is of continuing but you're getting that, of just the really then a From of not margin what about You're you first kind in would the the and firm is foremost, going that as that. whole year,

that have right We some really putting market credit the in space. we're growth nice the CTAC really showing is now, in good products

We the focus to of ramping is on, just the advantage. up take things couple out to our number a that. of really that solution even it's token, in. things in Same coming of team really have to our the going retail as to look, our in And early spectrum a our going of billion to we've done over kind in -- terms we're as do of historical always space the market kind our mention and $XX capacity of But of XX% retail retail XX% not And through market good of shots specific remains of a broadly solution. defined. strong for back it's raised. go into we're we really trying in The everything carefully momentum, us, year off a to opposed -- turn pick it and very coming institutional products to platform,

was quarter well. good. doing We're First

Brian Bedell

you. color. That’s a Thank great

Kewsong Lee

Thanks.

Operator

you. Thank

Our next Oppenheimer. the question line from comes Kotowski Chris of with

open. is line Your

Chris Kotowski

growth about I'm on very specific guess X -- of other And thinking, I opportunities and there in the are that inorganic that opportunities what you've opportunities you is there? as white -- the in you be space can't I can had frame you Yes. of about that major or terms see knowing other inorganic initiatives guess you I'm wondering growth. see. it Are kind kind of opportunities? solutions, though,

Kewsong Lee

question, your add-on question. finish ahead, your -- Chris go

Chris Kotowski

initiatives, -- moment integration kind three the XX of to thing. on for consolidation kind these of mean you're with should to to expect next that I Yes. your feel firm like or months before the you you Related tapped we do move and can when of XX that, out

Kewsong Lee

going that to accelerate busy. sheet transactions that going about already mix to our by our us. AUM and the FRE. Kew. they're and $XXX front, X of So balance aggregate, and Yes, it's in been to in our on approximately the year. us help to look, We're of business going we've question. is -- base, right? needle perpetual add earnings to capital diversify Chris, It's now our continue -- continue this And for million high-margin announced way, Okay, capital. obviously, Thanks perpetual We've supporting XX% for stream earnings move

continue I to said, opportunities repurpose we for So look balance sheet capital. as to

Our in criteria, it to be it has be it to has high nature. adjacent, has and it ideally, to has FR to scalable growth, be capital regenerative, be strategically and perpetual

growth. sure that for needs our past, -- me to of culture, there intentional quarter out tends make anything. compatible sense. been credit line. and there Of for which huge business busy the want team. be drive particular, and to for a I solutions is We're think lot there appreciate, you there do line looking business needing no these areas course, a much are like criteria I I time said is quota. do we with activity. things inorganic have said, very In no But strategic all very the make is the no is to But in the businesses no, to I to We've a very strategy time be this to where There the

the do And obviously, a important proactive you'll when next it's something one. way So no going to to we're be announce, when there's predict to first to But the approach. there's know.

Chris Kotowski

it me. right. for you. All Okay. Thank That's

Kewsong Lee

Chris. Thanks,

Operator

you. Thank

Our next BMO. question from the with Hone of comes line Rufus

Your line is open.

Rufus Hone

Is Good Great. in you generally. it's democratized mentioned products, products there business? product. on taking you. hear of been your my something seeing institutional potential And in morning. or question. side for perhaps to wanted whether interested be kind strong. your the solutions Solutions Thanks to might some some Thank for be that the in about thoughts new the investment around you're the of demand has for something for? the demand introduced solutions that growth a retail at channel ask really rising I'd I And performance

Curt Buser

the we're area is an question, very Look, Thanks Rufus. for excited Solutions about. that

there has really the strong. foremost, been performance First and

XX the So last X% quarter, great. XX% The months. funds have performance appreciation been this and in

Second, that's really translated.

are You European-style Keep very the solutions realizations now earnings about the can waterfall it's out keep business. these in year see up in to going but good it's there, have Solutions, distributable some in see that million then that XXXX, ramp potential -- The really of It's $XXX good. those this in up still in mind net that then carry. we this of accrued mind, we is should XXXX, out that sector. are and growth It's still funds.

a it. And But our aspect the has in strong. stair-step deployment, business secondaries been so natural in to there's particular, really

kind lot a that occurred. that otherwise see space. there's business kind we of would grow so And really quicker of our white have ability propelling of than to And

looking new you're of in one at a active thinking we that is add infancy of products, In the we're hear time little how it done hits which So of and it's perspective. around questions, and a is for of great do kind right. stages, fill here you'll tap from in long-term exactly how retail to But kind your us that sure make we all about Hope lots growth. want opportunities more but give Rufus. over to because there's what patience

Rufus Hone

you. Thank

Operator

Thank you.

line Our Alex Blostein next from the question with of comes Goldman Sachs.

open. is line Your

Alex Blostein

guys Hey, your similar good to, within the a fee-related morning. I you maybe fee guess, fee-related new earnings now. Thanks as do dealing revenues, of with out, around how peers to for many breakout performance taking I are start well. wanted the it question breaking again, question

should impact FRE just any the secondarily in you base, of growth on trajectory this kind us as mind in better going of help forward? how other And about the in or asset frame Thank asset either keep that, kind then of As base, the rates compensation through we out? around think comments about just think revenue we can think expenses any just fees we're to to building of you. consistency the the these help the forward, this stream and going to us the baseline kind

Curt Buser

thank you. and question, great a It's

look, claw-back and products, from So of the revenue about I to like of perpetual way investments. dependent these this, recurring divestment not streams the are think subject generally the not upon underlying divestiture

about million it's $X now quarterly interestingly, revenue this transparency. It really was business, So, And million credit so our year or over you so quarter. really in a little a give a see the about ago, piece. $XX you it we

grown. referred that's has business as particular, like you've and product So real really nice seen the that we in -- growth to CTAC

that, see relatively really characteristics, our while estate same mind basis, be done numbers you core-plus private increase In it kind XX% small, global business, grow, equity to continuing So US are as in the as real well. and of those perpetual size nature our growth. basis but that since to quarter. and that's seeing the now products scale of really nice has -- of where that's billion our continues of a really we on of really on being grow cash platform, as kind the a really perform to quarter-to-quarter visibility compensation, products gotten year-to-year on of more a all it's platform. we've $X team have a really real it's thing that in business now The volatile And strength in drive – about your question included those and came of strong nice generally an in the to going this keep this kind on point think in one XX% job revenues in compensation, And speaking, to It's well. their comp. on

increased a is the the this million if quarter, is so your the really so, so than the quarter current higher of think So, comp it and to you increase increase some $XX in quarter of those in cash you expect. the about otherwise due little performance revenues in bit million or why or that's $XX

out, quarter were essentially you versus to a If X% at year ago. rate an a strip that about we're growth

growth think had FRE. the QX that 'XX it's And we've to that. helps exclusive not about this clarification is of 'XX of is comp. X% in terms QX that in in on an Hopefully, about with too the way that growth So I bad

Alex Blostein

Thanks jump much. I back in Great. so queue. will

Operator

you. Thank

a have the Michael with Cyprys Stanley. from of Morgan line follow-up We

is open. line Your

Michael Cyprys

wanted Hey, the business. just equity private back I circle to for to follow-up. the thanks taking

of pressure, your bit the there exposure is Just through flavor companies, around how was sort would companies or be in portfolio about EBITDA with navigating And of you. rate current at helpful? navigating are navigating, a give color what backdrop those helping portfolio there growth accelerating, trends the there portfolio can floating revenue is inflationary through are of interest Just portfolio chain how how Maybe are this debt companies seeing rising you you you for a any much how little Thank decelerating? and terms that? you're Carlyle supply could just talk curious navigate Maybe bottlenecks, how companies environment? rates.

Curt Buser

for of will the thanks and I responding. question. Mike, one Hey in And Kew team terms this

In has portfolio of private is dive what private traditional Happy and equity in of to kind infrastructure is in that. equity, you're a So, estate kind that Obviously, that. really and the just energy obvious underlying done growth. lot amazing equity well. of really think in real private of back I to seeing look, kind see the into of drivers

top terms really seeing in underlying growth strong we're EBITDA. both So, line and of

the generally Now exceptions, has really but obviously, look, in there's been portfolio, performance good. the some

got all helping The -- capital, that's et been continuing in look, focus thing areas, et that we've and and technology, from cetera. working, companies to cetera, human management, other data that teams grow, improve, invest on

The that's up. teed we out thing been that playing is transactions other also number really of the have

So there's signed number of a transactions.

to in will that realized we million we have of through that terms come net $XXX or carry carry, to next it's were -- put If the you so think up that quarters. couple in of of signed

connection the just So of stats, what growth, stuff build a not good that, to with up. and that underlying sign plus in done in kind companies we've only

in I fixed the invest here, Kew more rate a debt can get From generally, debt think we to of to converted it's is really a and perspective, always structure once been strategy good. the company. stuff in weigh

relatively if to I exact Kew, converted but get we have don't that a percentages, know, to add. percentage to try don't the I you so, And know fixed. over high it's anything

Kewsong Lee

a the points only -- thing couple Michael, to Yes, of highlight.

every the have companies well well they've there, First as obviously, strong. and operating higher or obviously, -- been. But quite portfolio, -- as as taken to managing about equity here whole, inflation ever of issues look a through currently, operating ways very are margins high and quite but are our pass diversification to as from a the input metrics are And constructed it's will basis. two our or fund one look, all, underlying we through private costs finding are

point would I So that out.

Second, we of tend the to invest in companies that are in the parts higher economy. growth

drive perform during also And so, which of to lot productivity with processes mantra past made before, you in changes over which a performed that happening years, are there's a at have use period these digital our growth. increases, that is of the the our two creation COVID, with when been better on productivity, all portfolio more than seeing kind value marry of of of to that of things better companies the companies. how they you're the ever enables much we drive -- it's a And

lot up we our think quite portfolio the the equity we private attractive a performance operating the witnessed. despite told marks and market were as nicely, I performance quarter of of of of that And first you, highlights -- strong So volatility the underlying our portfolio. were the

cost of our discipline floating soon we as deals we're deals. swap but rate So everything have And we through to with we little portfolio manage always or lot a out. rate that as bit looking about risk, team ensure out are be our And like out companies instances, And the as real sign And rate all close environment works exposure, to up capital of our of driver that. hedging growth. to thus fixed, versus obviously have we're do pretty We creation don't of managing at a volatility. interest how companies equation, because debt. markets then, would volatile the far. it we to in want with we comfortable of portfolio remove certain have fixed Look, this relates that floating variables portfolio be we to floating companies financing and a rate obviously certain value to

to we big rates. So put we in real hedging have real place do in from ourselves swings active that immunize

Alex Blostein

appreciate Great. Thanks so so carry all color, Really including the the Thanks much. much. pipeline.

Operator

you. Thank

America. line Craig Siegenthaler comes next the of from Our follow-up with Bank of

open. is line Your

Craig Siegenthaler

the transactions heading few I the heard before realization how valuations the in XQ, public more announced private few into question XQ exit out deals were aggregate, that also January. does Thanks to activity large benefited activity less and Realization from a that with there. there's But follow-up. And response and just markets too? the the XQ taking in side, Great. pipeline look on for lower your a last

Curt Buser

as half seeing underpins with for there see estate But stuff So US lined guarantee our transactions. carry of can't I should strong, upon has imprecise closings. public in private year perform lot transactions. well. that still where good turns always science a carry. That, it's done continue of an But like signed the number that's nice real we're And getting be of credit But focused amounts the being of exact some the of opportunities to able that's strength is QX, well that both be obviously, as about is of some or per we're the Look, appropriate of year. for of That's the I of portfolio quarter. the terms feel what larger Craig, real team the dependent as thing coupled the on you $X where just quoted really all up. on real capital But there'll the transactions a to in in QX exclusive markets. billion any exits exit job the

Craig Siegenthaler

you, Curt. Thank

Operator

Thank you.

comes Rufus from next with BMO. follow-up Our Hone

open. Your is line

Rufus Hone

you I commentary was interest Thank any how you. taking would helpful. rising the competition at for for have inorganic you might blocks Fortitude Re? impact rates follow-up. activity give on the be can wondering around Thanks Great. And an think potential the for

Kewsong Lee

Yeah. valuations strategically rates respect how decide hey, Look, development some more about up, and there's factoring Obviously, on. Kew. are corporate Rufus, do And be that make the think valuation as we we we moves extent will it's pricing. that going clearly to go to to recalibration value, to in of with activity. that,

target the assets more are we extent to there's rising extent that, So us. for that, that again, that the strategically see there on rates, to to the volatility, extent is

about and We financially conditions sensible future be changes. and market not we're for quite the anything prospects accretive going to the our are as will making be sure accretive quite and environment to valuations recalibrating reflect us. how I'm acquisitions more than strategically say sure

many a going scalable comment think As we quite to years are which be just liabilities targeting. high we a have very to that There is liability Fortitude. as tremendous the to for it believe you're can that seen – target consumer-facing and that a the not market very referring such, And I platform business. it large market of a in monoline our and differentiated It It's deal on focus legacy suspect activity a do platform. it's I very It addressable for of differentiated liabilities for target that's busy our a that us. set attractive fact would product. as we And that, streams is is after. diversified Fortitude, is to go Fortitude differentiated Fortitude in is in that pipeline blocks, I ever is to is of the reinsurance way I've a terms It come light about for its scale it. as relates say just

Operator

Thank you.

follow-up a have of Goldman line We from Bolstein Sachs. the Alex with

is open. line Your

Alex Bolstein

a been a of really implied stock are your of are buying the under more that capital taking wanted some cash there's and sheet, in broadly. here? a thoughts follow-up. higher guys yet. I aggressive is The for more just balance back multiples a hasn't the the Day, the low. and What on Hey, back you convert sheet lot to cash. multiple. theoretically some very should to pressure. thanks that will you that happened deploying quite That a balance around FRE, of Investor cash Stock generate made management utilization ask fashion Since goal around cash And into some clear capital the really which question drive it lot has effectively into

Curt Buser

out at done do delivering growth, look, business you the think And for Alex, the Hey, long control, by characteristics FRE company -- here, factors things shareholders. the thanks can market of earnings we're stock. grow growth, for playing spelled we to a due ball Look, strategy growth, to has odd that we're and buy investing value planning the question. well. that's we strong that best same that, pretty your we in happen And token, in for and back

spent we back million So buying this $XX quarter shares.

will as You use the us issuing from of part growing also the see stock in stock business acquisitions. than

guarantee of Not done shares and that the that the dilution over we've that drive we historically transaction. our to -- people for for CBAM the in even acquisitions. dilution lower to below shares We'll how that little connection that and that X manage equation. on issued try than issue with respect shares to continue making a X% with as manage we we million same So had to side issued the

probably are, will more and time that cause dilution where So then shareholder things we'll some based on driving and goes forth, do. because we'll and flows as pivot of focused back value. aggregate But that acquisitions capital again, on

Alex Bolstein

you. sense. All Makes right. out Thank I it. Got that. figured

Curt Buser

Thanks.

Operator

closing no to further showing questions like I'm you. the Thank in I Daniel call remarks. over back the for queue. to would now turn

Daniel Harris

earnings Thank thank call today. busy another Towanda, it's know you, I day. and everyone, you, for joining our

any If you reach out free quarter. follow-up Relations have time. any next again to questions, feel to Otherwise, look you at Investor to with we forward speaking

Operator

Thank your concludes conference for gentlemen, participation. today's this call. and Ladies you

may disconnect. You now

The Carlyle Group Inc. (CG) 28 Apr 222022 Q1 Earnings call transcript