Carlyle Q1 2025 slides: Record fee-related earnings amid diversified growth

Introduction & Market Context

Carlyle Group (NASDAQ:CG) released its first quarter 2025 financial results on May 8, 2025, showcasing record fee-related earnings and continued growth across its diversified platform. The global investment firm reported strong performance metrics despite ongoing market uncertainties related to trade policies and geopolitical tensions.

The company’s presentation highlighted its robust financial position with total assets under management reaching $453 billion, up 6% year-over-year, supported by strong inflows across multiple segments. Carlyle’s diversified business model across private equity, credit, and alternative investments continues to drive resilient performance.

Quarterly Performance Highlights

Carlyle reported distributable earnings of $455 million on a pre-tax basis for Q1 2025, translating to $1.14 per common share on a post-tax basis. For the last twelve months, distributable earnings reached $1.5 billion or $3.79 per share. The firm achieved net income attributable to common stockholders of $130 million, or $0.35 per share diluted.

As shown in the following chart, fee-related earnings reached a record $311 million in Q1 2025, representing a 17% increase from $266 million in Q1 2024, with the FRE margin improving to 48% from 47% in the prior year:

The company reported strong inflows of $14.2 billion in Q1 2025, primarily driven by its insurance solutions and asset-backed finance strategies in the Global Credit segment. Deployment remained robust at $11.1 billion, while realized proceeds from carry funds totaled $8.6 billion during the quarter.

The following comprehensive overview illustrates Carlyle’s key metrics for the quarter and last twelve months:

Detailed Financial Analysis

Carlyle’s total segment revenues for Q1 2025 reached $1.04 billion, slightly higher than the $1.02 billion reported in Q1 2024. Fund management fees increased to $525.5 million from $515.6 million in the prior year, while transaction and portfolio advisory fees saw significant growth to $77.9 million from $26.7 million.

The firm’s distributable earnings have shown consistent growth, as illustrated in the chart below, with fee-related earnings serving as a stable foundation:

Net accrued performance revenues stood at $2.7 billion as of March 31, 2025, representing a slight decrease from the previous quarter primarily due to realizations and lower net accrued performance revenues in the firm’s fifth Asia buyout fund. Realized net performance revenues were $127 million in Q1 2025.

The breakdown of net accrued performance revenues by segment provides insight into the diversified nature of Carlyle’s earnings potential:

Segment Performance

Carlyle’s total assets under management of $453 billion are diversified across three main segments: Global Private Equity ($164 billion), Global Credit ($199 billion), and Carlyle AlpInvest ($89 billion). The following chart illustrates the AUM breakdown and year-over-year growth by segment:

In the Global Private Equity segment, total AUM increased 3% year-over-year. The segment deployed $3.5 billion in Q1 2025 and generated realized proceeds of $5.0 billion. The segment’s fair value of investments totaled $124 billion, with $40 billion in available capital.

The Global Credit segment showed strong growth with total AUM increasing 7% year-over-year to $199 billion. This segment deployed $5.3 billion in Q1 2025 and generated realized proceeds of $1.7 billion from traditional carry funds. Insurance solutions, private credit, and liquid credit strategies continue to drive growth in this segment.

Carlyle AlpInvest, the firm’s fund of funds business, saw impressive 12% year-over-year growth in AUM to $89 billion. This segment deployed $2.4 billion and generated realized proceeds of $1.9 billion in Q1 2025. Net accrued performance revenues for AlpInvest reached $569 million as of Q1 2025.

Capital Management & Balance Sheet

Carlyle maintained a strong balance sheet with total assets attributable to shareholders of $5.0 billion as of March 31, 2025. The firm’s cash position stood at $1.2 billion, providing ample liquidity for strategic initiatives and investments.

The following chart illustrates Carlyle’s balance sheet composition over time:

The company declared a quarterly dividend of $0.35 per common share, payable to shareholders of record as of May 19, 2025. Additionally, Carlyle repurchased or withheld 3.3 million shares of common stock in Q1 2025, totaling $177 million. As of March 31, 2025, $0.7 billion of repurchase capacity remained under the firm’s $1.4 billion authorization.

Forward-Looking Statements

According to the earnings call transcript, Carlyle has set an ambitious $40 billion fundraising target for 2025, with expectations of 6% growth in fee-related earnings. The firm plans to continue investing in its wealth, credit, and global strategies, with potential fundraising for Fund IX anticipated in the fourth quarter of 2025.

CEO Harvey Schwartz emphasized the company’s momentum during the earnings call, stating, "We are seeing strong momentum across our key growth areas," and highlighting Carlyle’s diversification by noting, "Carlyle is much more diversified today than it’s ever been."

While the firm maintains a positive outlook, management acknowledged potential challenges related to trade policy uncertainties, particularly regarding US-China relations, and is monitoring potential second-order economic impacts. Despite these concerns, Carlyle’s diversified platform across geographies and asset classes positions the firm to navigate market uncertainties effectively.

With a strong Q1 2025 performance and solid financial foundation, Carlyle appears well-positioned to execute its growth strategy while delivering value to shareholders through dividends and share repurchases.

Full presentation:

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