Carlyle Group Inc. — Call Transcript 2026

All right. I think we can go ahead and get started here. Good afternoon, everyone. I'm Mike Cyprys, equity analyst covering brokers, asset managers, and exchanges for Morgan Stanley Research. We're excited to have with us for our next session, Justin Plouffe, the Chief Financial Officer of Carlyle. With over $475 billion of assets under management, Carlyle is one of the world's largest alternative investment managers. Justin, thank you for joining us today. Thanks for having me, Mike. Great. I thought we could start a little bit about your background. Well, you've been at Carlyle for many years. Yeah. You're newer to the CFO role, and I believe this is your first sell-side conference appearance. It is. We'll go easy on you. Appreciate that, yeah. I think you've been in the CFO role for now about six months. 20 years at Carlyle. Just give us a little bit of color about the transition to the CFO role, how that's been, what parts of your background at Carlyle have helped you grow into that role. No, it's been great. I've been at Carlyle for almost 20 years now, almost all of that time as a credit investor. I started off in the CLO business way back in the days when CLOs were esoteric alternative assets. I eventually became the deputy CIO, working for Mark Jenkins and helping him grow the credit business to the $200 billion business it is today. I think that when I was in credit, a lot of what I was doing was managing the business, talking to our LPs, figuring out ways to grow. Even though I was a credit investor, the day-to-day actually had a lot of overlap with what one does as a CFO. I will also say that our CEO, Harvey Schwartz, and John Redett, who was CFO before me, they actually dealt with a lot of issues when Harvey came in three years ago. They dispensed with a lot of distractions, we'll say, and they left me in a great position, which is to continue the growth story. What I've been doing for the last six months is really just focusing on how do we grow the business, what areas should we be dedicating resources to, and how do we ultimately scale what Carlyle has to be even bigger and better. It's been a great six months. I'm having fun. Great. Well, let's begin here. Let's start with deployment. Carlyle is sitting on, I think, roughly $100 billion of dry powder. at a time when geopolitical uncertainty, higher for longer rates, market volatility, all creating risk, but also opportunities. Yeah. How has your macro outlook changed, say, versus three months ago? Where are you finding some of the most compelling risk-adjusted opportunities today in the marketplace? Yeah. I would say that given everything that's happened in 2026 so far, it's actually surprising how resilient the economy has been globally. Our companies are generally still growing. The companies that we lend to are generally still performing well. We don't see things like waves of defaults. We don't see problems we weren't expecting. It's been actually quite surprising how well the macroeconomic environment has held up. The counterpoint to that, right, is that there's been enormous volatility in the political scene, right? That has created a great deal of uncertainty. When you go around the world, what you hear from just about everybody is that they want security. They're focused on not just national security, but economic security, cybersecurity, right? There's a shift from this sort of just-in-time view to just in case. That is a very different mindset for investors to have. That, I think, in a lot of ways, does play into the power alleys that Carlyle has. We have a 40-year history of investing in aerospace and defense. We have great franchises in healthcare and financials and industrials. These are all areas that over the last decade probably have taken a bit of a backseat to tech. Now, because we are not heavy in that industry, we don't have a lot of the problems in software that maybe some other firms have, and we have LPs coming to us for the expertise that we have in those power alley areas. There is a lot of uncertainty and volatility in the world. With the stronger-than-expected economic backdrop, I think there's also a great chance for us to put capital to work. As you mentioned, we actually have a record amount of dry powder for Carlyle right now, and we are out there deploying it. Defense, industrials, healthcare, those are some of the more interesting areas of opportunity. They're interesting areas. They're areas where LPs are invested, and they're areas where we have a long-term strong track record. Our CEO, Harvey Schwartz, likes to say when he came to Carlyle, people said, "Oh, you're in trouble because you're not big in tech. You missed it." Now not being tech is somehow a virtue. I guess if you wait a lot of things will come your way. Right now, the areas where we have great capabilities are the areas where LPs are interested. Yeah. One of the more interesting tensions in the recent quarter was strong exit activity, but not necessarily from funds that were yielding carry. How should we think about carry realization pipeline from here? Do you feel like ingredients are in place for a more meaningful pickup over the next couple quarters? What needs to happen in the markets for that to come through on a more consistent basis? Sure. Carried interest is a really hard thing to predict quarter to quarter. There are so many factors that play into when it's realized. At a high level, the way I like to think about it is we've got $2.6 billion of accrued carried interest on our balance sheet. Generally speaking, that will flow through DE over a four-year period. I feel pretty good about saying that. Which quarters it will flow through, that's a much harder thing to predict. You mentioned in first quarter CP VII, two vintages ago, U.S. Buyout. That one is close to carried interest. It is not our finest piece of art, as we've said in the past, but we do expect it to get to carried interest in the coming quarters. CP VIII, the last vintage, is still really too early in the investment cycle, but it's a fund that's doing great. It's a first or second quartile fund, depending on the measure. That one's more just a matter of time. As the year goes on, we would expect to have realizations in funds like our Carlyle Japan Partners, Carlyle Europe Technology Partners, Carlyle Realty Partners, Carlyle Global Financial Services Partners, that are in carried interest time. We would expect to see that flow through DE. I always want to be careful that when I speak with shareholders that it is very difficult to predict this quarter to quarter. You need to take the longer-term view, and that really is that $2.6 billion of accrued carried interest that should come out over the next four years. Let's shift gears and talk about fundraising. Carlyle laid out a goal to raise over $200 billion over three years, which implies a meaningful acceleration versus the prior three years. Which pieces of the plan are largely visible today and which require more or the most execution? When we put together the plan, we wanted it to be something that we felt very confident in. Meaning we didn't want to put in placeholders for acquisitions or new businesses, things that we didn't have a line of sight on. The plan is very much based in our business as it exists today, scaling organically. We felt great about that in February. We feel great about it today. If you think about that $200 billion of fundraising, about $90 billion of it's credit, which is actually only a very small increase over the $88 billion that we raised as of three years prior for credit. If you think about the wealth aspect of it, of that $200 billion, it's $40 billion, so 20%. We've been running at a run rate of about 15% of our inflows being wealth, so that goes from 15 to 20. Again, not a huge jump. We also are looking at, in this period between now and 2028, really a super cycle for fundraising for us where all of our flagships are going to be in the market, right? U.S. Buyout, our opportunistic credit fund. Japan Buyout will likely be back. Our AlpInvest funds, which have been growing at a very fast rate either are in the market now or should be in the market soon. We have some of our best funds with great returns, our largest funds coming to market, and that all makes us feel very confident in that 200 number. Will the ultimate composition look exactly like what we put in the model? Probably not. There'll probably be puts and takes here and there, but there are many paths to achieve that number, and we feel really confident about it. Which contributors to the 200 do you feel the market misunderstands or is most underappreciated? If you miss the target, where is it most likely to be the shortfall? Look, I think what is not in there that people may underestimate are the upsides around doing something new in the insurance space, for instance. We didn't build that in. I mentioned there are no acquisitions in there. There's also no retirement in there in terms of flows from that channel. We just announced a partnership with SEI to do a product that is focused on retirement. We announced a product with AllianceBernstein in Brookfield. We'll be partnering with them to do a retirement product. None of that is in the build. I think there are multiple areas that could result in us doing even better than what is in the build. Otherwise, it's organic, and we feel really, really good about multiple paths to get to 200. Wanted to ask about SPV and the structured products that you put together to help fund. Yeah the $5 billion commitment to help support the next vintage fund for flagship buyers. Maybe you could just describe the transaction, how it came together, and is this something that you think could be more commonplace for you, for others across the industry? Yeah. This was a transaction that really started with Harvey getting a bunch of the senior people together and saying, "What can we do to differentiate ourselves in the market? What can we do for our LPs that they will appreciate, will solve a problem for them, and maybe will jumpstart some fundraising for us?" We went out and we spoke to a number of the largest LPs, and this was the result. A less than a handful of very significant LPs for us that have significant existing exposure, who also wanted to increase their exposure to Carlyle going forward. What they did was take their existing LP commitments, put them together into an SPV, also made forward commitments to that, and those were the assets. On the liability side, we had bank loans, so just banks indicated borrowing. We had a preferred equity instrument, and we had a common equity instrument. The preferred and the common owned mostly by the LPs that committed to the deal alongside Carlyle, and then we placed a little bit of the preferred, some of the preferred, with third parties. It really was a structure that was a win-win. Right? The LPs got some liquidity that they could use to reallocate today. They ultimately, as investors in the structure, retained exposure to the Carlyle funds they had, and they also increased their exposure to future Carlyle funds. For us, that's $5 billion that's earmarked for the next vintage U.S. buyout fund at full fees and carry. A solution for the LPs, a great win for us. Do I think it could be replicated? I expect it will be. You need to do it in size. The structure overall was more than $8 billion in size for us. I don't think this would make sense to do with too many smaller LPs, I think for LPs of significant size that are looking for liquidity, that have a long-term relationship with you, I think it makes a lot of sense. I don't think this is the last time you'll see it in the market. That unlocks that $5 billion commitment to the next flagship buyout. That's right. Great. Let's shift and talk about FRE growth margins. At your investor day earlier this year, you outlined an FRE target of $1.9+ billion, I should emphasize. We did put the plus, yes. You put the plus, in 2028, which implies a 15% CAGR. Can you unpack the building blocks to get there, how durable do you think this growth is, what are some of the biggest risks, if any? Yeah. Again, our plan is rooted in the business as it exists today and scaling that business. We felt great about that in February, we feel great about it today. We've said a number of times, if you look at that 15% CAGR, that's not going to be the same every year. 2026, for instance, it happens to be a year where some of our funds are stepping down in management fees. We're in fundraising mode. It's a year where we're focused on fundraising and deployment and realizations that are great for our LPs. As you get into 2027 and 2028, you should see us ramp up to that ultimate $1.9+ billion and 15% CAGR number. We feel really strongly about the ability to achieve it simply because it's based on organic growth of the flagship funds that are in the super cycle, I mentioned before, yes, wealth is part of it's 20% of the fundraising. It's not an enormous part of it doesn't include things like retirement. I think there's a lot of ways to get there, we wanted to make sure we put out a number that we felt very confident in. $1.9 billion is something we feel confident in. Credit insurance central to the next phase of growth at Carlyle. I guess, what do you think Carlyle does uniquely well there? How are you leaning into your unique advantages as you drive the next step function growth in credit? Yeah. I think the differentiating factor for our credit platform is really the diversification that we have. We did not build the platform based on one type of strategy. There are many successful monoline credit managers out there, but the vision that Mark Jenkins brought was that we wanted to be a solutions provider. We wanted to be able to go to a company and say, "No matter what solution you need, we have a pocket for that. If you want us to anchor your broadly syndicated loan deal, we can do that. If you want a regular way vanilla direct lending loan, we can do that. If you need junior capital, if you need something more bespoke, if you want us to lend against a hard asset, if you want us to securitize assets for you, we can do all of that." We've been able to, over the last eight years, build that out. I guess 10 years now, geez. We've been able to build that out, and now what we need to do is scale. Every part of it, I would say, other than the CLO business, which is quite well scaled, every other part of it is built to be bigger than it is today, and is on a path to be bigger than it is today. Really the goal there is to scale all of those solutions. I don't think there are many credit platforms out there that truly have that full set of capabilities unified under one leadership group that can face the borrower and say, "Whatever you need as a solution, we can provide it. Given some of these newer strategies, not just in credit, but you look across the rest of the platform, if you were to zoom out five years from now, what portion of the overall firm earnings do you think could be from businesses that barely existed five years ago? When we put together our plan for 2028, if you look at where the revenues are coming from, it's about a third, a third, a third between private equity, private credit, and our AlpInvest business. That is a far cry from what we used to be. I think five years ago, it was at least two-thirds private equity. We've diversified. The firm is much more durable for that. We don't rely on one particular channel of fundraising, right? We have insurance, yes. We have wealth, yes. We have our traditional institutional. We don't rely any longer on one flagship fund or one strategy, right? If the market for private equity is not that active, but there's a vibrant secondary market, people need liquidity solutions. Our AlpInvest business is incredibly well-positioned to take advantage of that as it has for the past five years. I think wherever the markets move now in the private space, one part or another of our business is well-positioned to take advantage of that, and that's going to be the difference between Carlyle going forward and maybe what we were in the past. You mentioned AlpInvest. I want to dig in there for a moment. It's become one of the firm's clearest growth engines, and today it looks less like a secondaries business and more like a private market solutions platform. Right. How much larger can that opportunity become? Talk about some of the steps you're taking over the next couple of years to further expand AlpInvest. AlpInvest has been an enormous success story for us. It's over $100 billion in AUM now. It's grown its FRE, it grew 60% last year. It's grown 4x in the last four years. This is really all about the natural evolution of private markets. Any market that starts out as esoteric, at first you can charge high fees, the returns are outsized. Over time, it moves to be more normalized. More people come in, there's pressure on the returns, then eventually what happens is people need liquidity. Private markets are now coming to that point where people want liquidity solutions. To your point, AlpInvest started out as a primaries allocator, then it went into co-investment, then buying secondaries. Now it also has solutions in portfolio finance. It could do securitizations like we just did for our U.S. buyout franchise. NAV loans, it's moving into the credit space. Again, it's like our credit business. We want to be able to approach GPs and LPs around the world and say, "What do you need? What type of solution do you need?" Because we have a pocket that can provide that. I think that that will continue to grow with the private markets. What rate can AlpInvest grow at? At the rate that the private markets grow, because the more capital is out there in private markets, the more participants you have, the more there will be needs for liquidity. Frankly, I will get the question sometimes, well, isn't this a moment in time because private equity has not exited as much, perhaps as it has in the past? That's one reason. When we talk to LPs, there are many other reasons they want liquidity. They want to reallocate within private equity. They want to reallocate to credit. They have liability structure issues. The fact that private equity maybe hasn't realized as much, we've actually realized quite a bit as a firm, some others haven't. That's one factor of many, this need for liquidity and liquidity solutions, it's not going away. The demand will only go up. Let's talk about private wealth, which has been a key priority for Carlyle, for the industry. What lessons has Carlyle learned from building out the wealth platform over the last couple of years, including recent experience with CTAC and investor behavior? Look, we were a little bit later to the wealth process than some others. I think the team's done a phenomenal job catching us up. The brand name has resonated very well in the wealth channel. CTAC was the first thing that we did in the wealth channel, a private credit interval fund. I got to be part of that process and building that and going out into the wealth channel. The investors there are just as sophisticated as they are in the institutional channel. They have different concerns and different questions, but they are very discerning, and you have to be ready to provide phenomenal client service for them. We've now built out the private wealth business so that we have a flagship in every one of our strategies, at least one, and that's kind of new in the last 12 months for us. We're really at the very beginning of being able to offer the full suite of Carlyle investment products down the wealth channel. The response so far has been great. It is a different kind of marketing and talking. We entered into a sponsorship agreement with Oracle Red Bull Racing of Formula 1. That's been a very fun thing. I don't think we would have done that if we were only in the institutional channel. I'm still waiting for my chance to meet Max Verstappen. Things like that are just a bit of a different world and a different way of thinking. It is a channel that fully understands the need for exposure to private markets. You just can't create a truly diversified portfolio for a client now if they don't have some exposure to private markets. They're too big. They're too big a part of the economy. We have these bumps in the road, as you always have in fundraising. Right now, it's private credit. If you ask me five years from now, are wealth investors going to have more or less private market exposure than they have today? It's going to be more, it should be more because it has a place in a broadly diversified portfolio, I know the advisors in the channel understand that very well. How has your experience so far impacted your approach to new product development? What are some of the types of strategies and vehicles that we could see from Carlyle in the coming years in the wealth channel? Yeah, I'm pretty happy with the strategies and the structures that we have for the wealth channel now. Our big step was to get at least one product for every one of our investment strategies. I'm sure there will be more, but I'm not sure that we need to have 20. We probably need to have seven that really encapsulate everything that we do, and I think we'll do that. The most important thing is that they're structured correctly for the underlying assets. There are certain assets where they really are illiquid, and you need to put them away for five or six or seven years and understand that that's not going to be a source of liquidity for you. Let the investors do their job. There are certain ones that fall in kind of the middle bucket. Credit probably is there. You can get some liquidity, but it shouldn't be your first source. There are some that are fully liquid. The structure has to match that, and I think we made a good choice when back in 2018 for CTAC, we decided to use the interval structure, which provides 5% per quarter liquidity. That's the right structure for private credit. You never want to be a forced seller in credit. I mean, if you look back at how people lost money through the great financial crisis. Generally speaking, it wasn't because they made bad credit decisions, had defaults, and poor recoveries. Generally, it was because they were a forced seller at the wrong time. When we were designing these products, we designed them that way. That's the future, I think, for these products, is that the buyer base needs to understand where they fit in the liquidity spectrum. I think most of the advisors do. If they don't, they will learn. Once they do, then I think you'll see even more uptake because there'll be a greater understanding of how these products work within a broader portfolio. While there's a lot of focus on the wealth channel, it seems the retirement channel may emerge as a new channel. Yeah. Understandably, it's not in your targets for 2028. I guess what still needs to happen for private markets to become mainstream inside defined contribution plans? Talk about the steps you're taking over the next 12, 24 months to capture this opportunity. Yeah. In a lot of ways, if you think about where private markets assets should sit, it's retirement. Really, the first uptake for private markets were pension funds, which are thinking about long-term retirement liabilities. It only makes sense now that eventually they make their way into individuals' retirement planning. I think just from an asset management standpoint, there is a natural pull there. The difficulties tend to be a little bit more around the regulation. It is a heavily regulated space. It is a unique space that has a lot of rules that others don't. What we're working through as an industry right now is how do you fit there? I think first it will be part of a broader portfolio solution, so a target-date fund or something of that nature. Mentioned before, we're partnering with SEI on an interval fund product that will package a variety of private markets investment solutions into a sort of one vehicle, effectively. Same thing with our partnership with AllianceBernstein and Brookfield, where we're doing the private equity, Brookfield's doing real assets, AllianceBernstein's doing some credit, and we're packaging it all as one solution. That's probably the first step. I think we're probably a ways away from having one-off individual asset solutions for retirement investors, but we'll see over the next few years. I expect it will be more of an evolution. It's not going to happen overnight. It will likely be a slower uptake. Again, if you think about just intellectually where these assets should sit and what type of liability they should sit against, retirement just makes a ton of sense. I expect it will grow consistently over time. Let's shift and talk about AI. I know it's a focus for you- I've heard of it, yeah at Carlyle. Yes. Across the investment process- Yeah across portfolio management, firm operations. As we move beyond experimentation, where are you seeing measurable productivity gains today, and when do you expect- Sure those benefits to become more visible in the economics of the business? Yeah. It's a great question. AI is going to revolutionize eventually every single industry in one way or another. I will tell you, in our industry today, right now, it is helping us with efficiency. It is able to do things faster than human beings can in certain instances, with the proper human oversight. We are finding efficiency gains in all sorts of things, payment processing, putting together slide decks. I think our junior folks are probably very happy to have a lot of the AI tools that we have now. It just allows them to get work done more efficiently and faster than maybe it used to be when I was putting together slide decks. There's a lot of that that really has had an immediate impact on the business. I think the longer-term stuff, we are spending an enormous amount of time on. We are very much believers that AI is going to significantly impact the investment process going forward. I wouldn't say it's there yet. That's where we're more in the lab. We are working with some of the leaders in the AI industry about how to properly train these models and have them bring more value to decision-making. At this particular moment, most of the value really is in sort of the efficiency gains and speeding along the processes and decision-making that was already happening. In the next five years, you're going to see the decision-making itself start to get impacted, and that will be very interesting. Any way to quantify the benefits so far? Boy, I don't think so. It's a really difficult thing to measure. I wouldn't tell you that we have particular measurement of, oh, we saved this many hours, or we saved this many dollars. The other thing that every industry is going to have to grapple with, which people are starting to think about now, is that AI is not free, right? You have to pay for this. I was half-joking with someone the other day, like maybe we'll still need to hire junior people. Of course, we're going to need to hire junior people, right? AI isn't going to do everything for us. There is going to have to be a balance of what do you use AI for, especially when you're talking about major, significant computing power, and what can you use maybe lesser technology for, or simply have a human do? How do you think about the implications for talent management. I think it's. and recruiting? It's something we think a lot about because, on the one hand, you want to understand when you're evaluating talent that somebody is doing their own work and that their thoughts are their thoughts, and they're not getting them from AI. That said, the moment they come in to do work, you expect them to use AI. You're really trying to identify people that have that creative thinking aspect of the work that we do, but also can interact with the tools, including AI. I think ultimately, it will change things, but we will still have a structure of mentorship. It will really still be about the senior people training the junior people about what makes a good investment, how do you look at a company, how do you look at an investment process. AI will be a tool and an important part of that, but there still will be that apprenticeship model in the investment industry. I think hopefully what it will do, and I tend to be optimistic about these things, hopefully what it will do is reduce the amount of rote work and really increase the focus that we can have on the key decision-making that goes into an investment. If we look out three to five years, is it primarily an efficiency tool, or you think it can become a genuine source of competitive advantage? I think it's both. I think it's absolutely an efficiency tool, but I also think in terms of decision-making, the technology will get to a place where it can be helpful. I don't think that we will ever fully replace the human element, but I think it can be very helpful and a huge part of that. I would hope that we're at the forefront of using AI in our decision-making process because I think it's a very powerful tool. I will say, though, that some of the predictions of software companies not existing or anything don't strike me as that credible. Just because somebody can go and vibe code a CRM solution doesn't mean that that's the most efficient thing to do, or you can't imagine every single company vibe coding every single application that they need. This is actually a significant concern in many ways because of the cybersecurity threat that can come from it. AI will be incorporated in just about everything that we do, and it will simply be sort of like the internet, right? We don't talk about using the internet. Every company obviously interacts with the internet today. Every company will interact with AI, and it will be embedded in everything that we do. We're almost up on time, final question. If you look to Carlyle of 2030, which of your emerging growth initiatives do you think has the potential to be the most transformational to the firm? What do you think investors are most underestimating about where Carlyle will be in five years? Well, the theme I think that AI has the greatest transformational impact both for our portfolio companies and for the firm, I would say that's true of just about every company in every industry. I mean, it is a revolution that we're going through. In terms of Carlyle, as I said before, I think we have built the foundation of being a full solutions provider in private markets across AlpInvest, credit, private equity, scale is really what we need to focus on now. I think what people underestimate about Carlyle is how that diversity and durability will be a huge advantage going forward. To not be a monoline, to be able to move wherever value is across private markets, that's an enormously valuable thing. To do that across many different geographies around the world, that's something that's hard to replicate, I think it will serve us well, it will give us the opportunity to, I think, really be one of the firms that continues on for a very long time in private markets and has a very durable brand. We'll have to leave it there. Justin, thank you so much

Speaker 2: All right. I think we can go ahead and get started here. Good afternoon, everyone. I'm Mike Cyprys, equity analyst covering brokers, asset managers, and exchanges for Morgan Stanley Research. We're excited to have with us for our next session, Justin Plouffe, the Chief Financial Officer of Carlyle. With over $475 billion of assets under management, Carlyle is one of the world's largest alternative investment managers. Justin, thank you for joining us today. All right. all right I think we can go ahead and get started here. i think we can go ahead and get started here Good afternoon, everyone. good afternoon everyone I'm Mike Cyprys, equity analyst covering brokers, asset managers, and exchanges for Morgan Stanley Research. i'm mike cyprys equity analyst covering brokers asset managers and exchanges for morgan stanley research We're excited to have with us for our next session, Justin Plouffe, the Chief Financial Officer of Carlyle. we're excited to have with us for our next session justin plouffe the chief financial officer of carlyle With over $475 billion of assets under management, Carlyle is one of the world's largest alternative investment managers. with over $475 billion of assets under management carlyle is one of the world's largest alternative investment managers Justin, thank you for joining us today. justin thank you for joining us today

Speaker 1: Thanks for having me, Mike. Thanks for having me, Mike. thanks for having me mike

Speaker 2: Great. I thought we could start a little bit about your background. Well, you've been at Carlyle for many years. Great. great I thought we could start a little bit about your background. i thought we could start a little bit about your background Well, you've been at Carlyle for many years. well you've been at carlyle for many years

Speaker 1: Yeah. Yeah. yeah

Speaker 2: You're newer to the CFO role, and I believe this is your first sell-side conference appearance. You're newer to the CFO role, and I believe this is your first sell-side conference appearance. you're newer to the cfo role and i believe this is your first sell-side conference appearance

Speaker 1: It is. It is. it is

Speaker 2: We'll go easy on you. We'll go easy on you. we'll go easy on you

Speaker 1: Appreciate that, yeah. Appreciate that, yeah. appreciate that yeah

Speaker 2: I think you've been in the CFO role for now about six months. I think you've been in the CFO role for now about six months. i think you've been in the cfo role for now about six months 20 years at Carlyle. Just give us a little bit of color about the transition to the CFO role, how that's been, what parts of your background at Carlyle have helped you grow into that role. 20 years at Carlyle. 20 years at carlyle Just give us a little bit of color about the transition to the CFO role, how that's been, what parts of your background at Carlyle have helped you grow into that role. just give us a little bit of color about the transition to the cfo role how that's been what parts of your background at carlyle have helped you grow into that role

Speaker 1: No, it's been great. I've been at Carlyle for almost 20 years now, almost all of that time as a credit investor. I started off in the CLO business way back in the days when CLOs were esoteric alternative assets. I eventually became the deputy CIO, working for Mark Jenkins and helping him grow the credit business to the $200 billion business it is today. I think that when I was in credit, a lot of what I was doing was managing the business, talking to our LPs, figuring out ways to grow. Even though I was a credit investor, the day-to-day actually had a lot of overlap with what one does as a CFO. No, it's been great. no it's been great I've been at Carlyle for almost 20 years now, almost all of that time as a credit investor. i've been at carlyle for almost 20 years now almost all of that time as a credit investor I started off in the CLO business way back in the days when CLOs were esoteric alternative assets. i started off in the clo business way back in the days when clos were esoteric alternative assets I eventually became the deputy CIO, working for Mark Jenkins and helping him grow the credit business to the $200 billion business it is today. i eventually became the deputy cio working for mark jenkins and helping him grow the credit business to the $200 billion business it is today I think that when I was in credit, a lot of what I was doing was managing the business, talking to our LPs, figuring out ways to grow. i think that when i was in credit a lot of what i was doing was managing the business talking to our lps figuring out ways to grow Even though I was a credit investor, the day-to-day actually had a lot of overlap with what one does as a CFO. even though i was a credit investor the day-to-day actually had a lot of overlap with what one does as a cfo I will also say that our CEO, Harvey Schwartz, and John Redett, who was CFO before me, they actually dealt with a lot of issues when Harvey came in three years ago. They dispensed with a lot of distractions, we'll say, and they left me in a great position, which is to continue the growth story. What I've been doing for the last six months is really just focusing on how do we grow the business, what areas should we be dedicating resources to, and how do we ultimately scale what Carlyle has to be even bigger and better. It's been a great six months. I'm having fun. I will also say that our CEO, Harvey Schwartz, and John Redett, who was CFO before me, they actually dealt with a lot of issues when Harvey came in three years ago. i will also say that our ceo harvey schwartz and john redett who was cfo before me they actually dealt with a lot of issues when harvey came in three years ago They dispensed with a lot of distractions, we'll say, and they left me in a great position, which is to continue the growth story. they dispensed with a lot of distractions we'll say and they left me in a great position which is to continue the growth story What I've been doing for the last six months is really just focusing on how do we grow the business, what areas should we be dedicating resources to, and how do we ultimately scale what Carlyle has to be even bigger and better. what i've been doing for the last six months is really just focusing on how do we grow the business what areas should we be dedicating resources to and how do we ultimately scale what carlyle has to be even bigger and better It's been a great six months. it's been a great six months I'm having fun. i'm having fun

Speaker 2: Great. Well, let's begin here. Let's start with deployment. Carlyle is sitting on, I think, roughly $100 billion of dry powder. Great. great Well, let's begin here. well let's begin here Let's start with deployment. let's start with deployment Carlyle is sitting on, I think, roughly $100 billion of dry powder. carlyle is sitting on i think roughly $100 billion of dry powder at a time when geopolitical uncertainty, higher for longer rates, market volatility, all creating risk, but also opportunities. at a time when geopolitical uncertainty, higher for longer rates, market volatility, all creating risk, but also opportunities. at a time when geopolitical uncertainty higher for longer rates market volatility all creating risk but also opportunities

Speaker 1: Yeah. Yeah. yeah

Speaker 2: How has your macro outlook changed, say, versus three months ago? Where are you finding some of the most compelling risk-adjusted opportunities today in the marketplace? How has your macro outlook changed, say, versus three months ago? how has your macro outlook changed say versus three months ago Where are you finding some of the most compelling risk-adjusted opportunities today in the marketplace? where are you finding some of the most compelling risk-adjusted opportunities today in the marketplace

Speaker 1: Yeah. I would say that given everything that's happened in 2026 so far, it's actually surprising how resilient the economy has been globally. Our companies are generally still growing. The companies that we lend to are generally still performing well. We don't see things like waves of defaults. We don't see problems we weren't expecting. It's been actually quite surprising how well the macroeconomic environment has held up. The counterpoint to that, right, is that there's been enormous volatility in the political scene, right? That has created a great deal of uncertainty. When you go around the world, what you hear from just about everybody is that they want security. They're focused on not just national security, but economic security, cybersecurity, right? There's a shift from this sort of just-in-time view to just in case. That is a very different mindset for investors to have. Yeah. yeah I would say that given everything that's happened in 2026 so far, it's actually surprising how resilient the economy has been globally. i would say that given everything that's happened in 2026 so far it's actually surprising how resilient the economy has been globally Our companies are generally still growing. our companies are generally still growing The companies that we lend to are generally still performing well. the companies that we lend to are generally still performing well We don't see things like waves of defaults. we don't see things like waves of defaults We don't see problems we weren't expecting. we don't see problems we weren't expecting It's been actually quite surprising how well the macroeconomic environment has held up. it's been actually quite surprising how well the macroeconomic environment has held up The counterpoint to that, right, is that there's been enormous volatility in the political scene, right? the counterpoint to that right is that there's been enormous volatility in the political scene right That has created a great deal of uncertainty. that has created a great deal of uncertainty When you go around the world, what you hear from just about everybody is that they want security. when you go around the world what you hear from just about everybody is that they want security They're focused on not just national security, but economic security, cybersecurity, right? they're focused on not just national security but economic security cybersecurity right There's a shift from this sort of just-in-time view to just in case. there's a shift from this sort of just-in-time view to just in case That is a very different mindset for investors to have. that is a very different mindset for investors to have That, I think, in a lot of ways, does play into the power alleys that Carlyle has. We have a 40-year history of investing in aerospace and defense. We have great franchises in healthcare and financials and industrials. These are all areas that over the last decade probably have taken a bit of a backseat to tech. Now, because we are not heavy in that industry, we don't have a lot of the problems in software that maybe some other firms have, and we have LPs coming to us for the expertise that we have in those power alley areas. There is a lot of uncertainty and volatility in the world. With the stronger-than-expected economic backdrop, I think there's also a great chance for us to put capital to work. That, I think, in a lot of ways, does play into the power alleys that Carlyle has. that i think in a lot of ways does play into the power alleys that carlyle has We have a 40-year history of investing in aerospace and defense. we have a 40-year history of investing in aerospace and defense We have great franchises in healthcare and financials and industrials. we have great franchises in healthcare and financials and industrials These are all areas that over the last decade probably have taken a bit of a backseat to tech. these are all areas that over the last decade probably have taken a bit of a backseat to tech Now, because we are not heavy in that industry, we don't have a lot of the problems in software that maybe some other firms have, and we have LPs coming to us for the expertise that we have in those power alley areas. now because we are not heavy in that industry we don't have a lot of the problems in software that maybe some other firms have and we have lps coming to us for the expertise that we have in those power alley areas There is a lot of uncertainty and volatility in the world. there is a lot of uncertainty and volatility in the world With the stronger-than-expected economic backdrop, I think there's also a great chance for us to put capital to work. with the stronger-than-expected economic backdrop i think there's also a great chance for us to put capital to work As you mentioned, we actually have a record amount of dry powder for Carlyle right now, and we are out there deploying it. As you mentioned, we actually have a record amount of dry powder for Carlyle right now, and we are out there deploying it. as you mentioned we actually have a record amount of dry powder for carlyle right now and we are out there deploying it

Speaker 2: Defense, industrials, healthcare, those are some of the more interesting areas of opportunity. Defense, industrials, healthcare, those are some of the more interesting areas of opportunity. defense industrials healthcare those are some of the more interesting areas of opportunity

Speaker 1: They're interesting areas. They're areas where LPs are invested, and they're areas where we have a long-term strong track record. Our CEO, Harvey Schwartz, likes to say when he came to Carlyle, people said, "Oh, you're in trouble because you're not big in tech. You missed it." Now not being tech is somehow a virtue. I guess if you wait a lot of things will come your way. Right now, the areas where we have great capabilities are the areas where LPs are interested. They're interesting areas. they're interesting areas They're areas where LPs are invested, and they're areas where we have a long-term strong track record. they're areas where lps are invested and they're areas where we have a long-term strong track record Our CEO, Harvey Schwartz, likes to say when he came to Carlyle, people said, "Oh, you're in trouble because you're not big in tech. our ceo harvey schwartz likes to say when he came to carlyle people said "oh you're in trouble because you're not big in tech You missed it." Now not being tech is somehow a virtue. you missed it." now not being tech is somehow a virtue I guess if you wait a lot of things will come your way. i guess if you wait a lot of things will come your way Right now, the areas where we have great capabilities are the areas where LPs are interested. right now the areas where we have great capabilities are the areas where lps are interested

Speaker 2: Yeah. One of the more interesting tensions in the recent quarter was strong exit activity, but not necessarily from funds that were yielding carry. How should we think about carry realization pipeline from here? Do you feel like ingredients are in place for a more meaningful pickup over the next couple quarters? What needs to happen in the markets for that to come through on a more consistent basis? Yeah. yeah One of the more interesting tensions in the recent quarter was strong exit activity, but not necessarily from funds that were yielding carry. one of the more interesting tensions in the recent quarter was strong exit activity but not necessarily from funds that were yielding carry How should we think about carry realization pipeline from here? how should we think about carry realization pipeline from here Do you feel like ingredients are in place for a more meaningful pickup over the next couple quarters? do you feel like ingredients are in place for a more meaningful pickup over the next couple quarters What needs to happen in the markets for that to come through on a more consistent basis? what needs to happen in the markets for that to come through on a more consistent basis

Speaker 1: Sure. Carried interest is a really hard thing to predict quarter to quarter. There are so many factors that play into when it's realized. At a high level, the way I like to think about it is we've got $2.6 billion of accrued carried interest on our balance sheet. Generally speaking, that will flow through DE over a four-year period. I feel pretty good about saying that. Which quarters it will flow through, that's a much harder thing to predict. You mentioned in first quarter CP VII, two vintages ago, U.S. Buyout. That one is close to carried interest. It is not our finest piece of art, as we've said in the past, but we do expect it to get to carried interest in the coming quarters. CP VIII, the last vintage, is still really too early in the investment cycle, but it's a fund that's doing great. Sure. sure Carried interest is a really hard thing to predict quarter to quarter. carried interest is a really hard thing to predict quarter to quarter There are so many factors that play into when it's realized. there are so many factors that play into when it's realized At a high level, the way I like to think about it is we've got $2.6 billion of accrued carried interest on our balance sheet. Generally speaking, that will flow through DE over a four-year period. at a high level the way i like to think about it is we've got $2.6 billion of accrued carried interest on our balance sheet. generally speaking that will flow through de over a four-year period I feel pretty good about saying that. i feel pretty good about saying that Which quarters it will flow through, that's a much harder thing to predict. which quarters it will flow through that's a much harder thing to predict You mentioned in first quarter CP VII, two vintages ago, U.S. you mentioned in first quarter cp vii two vintages ago u.s Buyout. buyout That one is close to carried interest. that one is close to carried interest It is not our finest piece of art, as we've said in the past, but we do expect it to get to carried interest in the coming quarters. it is not our finest piece of art as we've said in the past but we do expect it to get to carried interest in the coming quarters CP VIII, the last vintage, is still really too early in the investment cycle, but it's a fund that's doing great. cp viii the last vintage is still really too early in the investment cycle but it's a fund that's doing great It's a first or second quartile fund, depending on the measure. That one's more just a matter of time. As the year goes on, we would expect to have realizations in funds like our Carlyle Japan Partners, Carlyle Europe Technology Partners, Carlyle Realty Partners, Carlyle Global Financial Services Partners, that are in carried interest time. We would expect to see that flow through DE. I always want to be careful that when I speak with shareholders that it is very difficult to predict this quarter to quarter. You need to take the longer-term view, and that really is that $2.6 billion of accrued carried interest that should come out over the next four years. It's a first or second quartile fund, depending on the measure. it's a first or second quartile fund depending on the measure That one's more just a matter of time. that one's more just a matter of time As the year goes on, we would expect to have realizations in funds like our Carlyle Japan Partners, Carlyle Europe Technology Partners, Carlyle Realty Partners, Carlyle Global Financial Services Partners, that are in carried interest time. as the year goes on we would expect to have realizations in funds like our carlyle japan partners carlyle europe technology partners carlyle realty partners, carlyle global financial services partners that are in carried interest time We would expect to see that flow through DE. we would expect to see that flow through de I always want to be careful that when I speak with shareholders that it is very difficult to predict this quarter to quarter. i always want to be careful that when i speak with shareholders that it is very difficult to predict this quarter to quarter You need to take the longer-term view, and that really is that $2.6 billion of accrued carried interest that should come out over the next four years. you need to take the longer-term view and that really is that $2.6 billion of accrued carried interest that should come out over the next four years

Speaker 2: Let's shift gears and talk about fundraising. Carlyle laid out a goal to raise over $200 billion over three years, which implies a meaningful acceleration versus the prior three years. Which pieces of the plan are largely visible today and which require more or the most execution? Let's shift gears and talk about fundraising. let's shift gears and talk about fundraising Carlyle laid out a goal to raise over $200 billion over three years, which implies a meaningful acceleration versus the prior three years. carlyle laid out a goal to raise over $200 billion over three years which implies a meaningful acceleration versus the prior three years Which pieces of the plan are largely visible today and which require more or the most execution? which pieces of the plan are largely visible today and which require more or the most execution

Speaker 1: When we put together the plan, we wanted it to be something that we felt very confident in. Meaning we didn't want to put in placeholders for acquisitions or new businesses, things that we didn't have a line of sight on. The plan is very much based in our business as it exists today, scaling organically. We felt great about that in February. We feel great about it today. If you think about that $200 billion of fundraising, about $90 billion of it's credit, which is actually only a very small increase over the $88 billion that we raised as of three years prior for credit. If you think about the wealth aspect of it, of that $200 billion, it's $40 billion, so 20%. We've been running at a run rate of about 15% of our inflows being wealth, so that goes from 15 to 20. When we put together the plan, we wanted it to be something that we felt very confident in. when we put together the plan we wanted it to be something that we felt very confident in Meaning we didn't want to put in placeholders for acquisitions or new businesses, things that we didn't have a line of sight on. meaning we didn't want to put in placeholders for acquisitions or new businesses things that we didn't have a line of sight on The plan is very much based in our business as it exists today, scaling organically. the plan is very much based in our business as it exists today scaling organically We felt great about that in February. we felt great about that in february We feel great about it today. we feel great about it today If you think about that $200 billion of fundraising, about $90 billion of it's credit, which is actually only a very small increase over the $88 billion that we raised as of three years prior for credit. if you think about that $200 billion of fundraising about $90 billion of it's credit which is actually only a very small increase over the $88 billion that we raised as of three years prior for credit If you think about the wealth aspect of it, of that $200 billion, it's $40 billion, so 20%. if you think about the wealth aspect of it of that $200 billion it's $40 billion so 20% We've been running at a run rate of about 15% of our inflows being wealth, so that goes from 15 to 20. we've been running at a run rate of about 15% of our inflows being wealth so that goes from 15 to 20 Again, not a huge jump. We also are looking at, in this period between now and 2028, really a super cycle for fundraising for us where all of our flagships are going to be in the market, right? U.S. Buyout, our opportunistic credit fund. Japan Buyout will likely be back. Our AlpInvest funds, which have been growing at a very fast rate either are in the market now or should be in the market soon. We have some of our best funds with great returns, our largest funds coming to market, and that all makes us feel very confident in that 200 number. Will the ultimate composition look exactly like what we put in the model? Probably not. There'll probably be puts and takes here and there, but there are many paths to achieve that number, and we feel really confident about it. Again, not a huge jump. again not a huge jump We also are looking at, in this period between now and 2028, really a super cycle for fundraising for us where all of our flagships are going to be in the market, right? we also are looking at in this period between now and 2028 really a super cycle for fundraising for us where all of our flagships are going to be in the market right U.S. u.s Buyout, our opportunistic credit fund. buyout our opportunistic credit fund Japan Buyout will likely be back. japan buyout will likely be back Our AlpInvest funds, which have been growing at a very fast rate either are in the market now or should be in the market soon. our alpinvest funds which have been growing at a very fast rate either are in the market now or should be in the market soon We have some of our best funds with great returns, our largest funds coming to market, and that all makes us feel very confident in that 200 number. we have some of our best funds with great returns our largest funds coming to market and that all makes us feel very confident in that 200 number Will the ultimate composition look exactly like what we put in the model? will the ultimate composition look exactly like what we put in the model Probably not. probably not There'll probably be puts and takes here and there, but there are many paths to achieve that number, and we feel really confident about it. there'll probably be puts and takes here and there but there are many paths to achieve that number and we feel really confident about it

Speaker 2: Which contributors to the 200 do you feel the market misunderstands or is most underappreciated? If you miss the target, where is it most likely to be the shortfall? Which contributors to the 200 do you feel the market misunderstands or is most underappreciated? which contributors to the 200 do you feel the market misunderstands or is most underappreciated If you miss the target, where is it most likely to be the shortfall? if you miss the target where is it most likely to be the shortfall

Speaker 1: Look, I think what is not in there that people may underestimate are the upsides around doing something new in the insurance space, for instance. We didn't build that in. I mentioned there are no acquisitions in there. There's also no retirement in there in terms of flows from that channel. We just announced a partnership with SEI to do a product that is focused on retirement. We announced a product with AllianceBernstein in Brookfield. We'll be partnering with them to do a retirement product. None of that is in the build. I think there are multiple areas that could result in us doing even better than what is in the build. Otherwise, it's organic, and we feel really, really good about multiple paths to get to 200. Look, I think what is not in there that people may underestimate are the upsides around doing something new in the insurance space, for instance. look i think what is not in there that people may underestimate are the upsides around doing something new in the insurance space for instance We didn't build that in. we didn't build that in I mentioned there are no acquisitions in there. i mentioned there are no acquisitions in there There's also no retirement in there in terms of flows from that channel. there's also no retirement in there in terms of flows from that channel We just announced a partnership with SEI to do a product that is focused on retirement. we just announced a partnership with sei to do a product that is focused on retirement We announced a product with AllianceBernstein in Brookfield. we announced a product with alliancebernstein in brookfield We'll be partnering with them to do a retirement product. we'll be partnering with them to do a retirement product None of that is in the build. none of that is in the build I think there are multiple areas that could result in us doing even better than what is in the build. i think there are multiple areas that could result in us doing even better than what is in the build Otherwise, it's organic, and we feel really, really good about multiple paths to get to 200. otherwise it's organic and we feel really really good about multiple paths to get to 200

Speaker 2: Wanted to ask about SPV and the structured products that you put together to help fund. Wanted to ask about SPV and the structured products that you put together to help fund. wanted to ask about spv and the structured products that you put together to help fund

Speaker 1: Yeah Yeah yeah

Speaker 2: the $5 billion commitment to help support the next vintage fund for flagship buyers. Maybe you could just describe the transaction, how it came together, and is this something that you think could be more commonplace for you, for others across the industry? the $5 billion commitment to help support the next vintage fund for flagship buyers. the $5 billion commitment to help support the next vintage fund for flagship buyers Maybe you could just describe the transaction, how it came together, and is this something that you think could be more commonplace for you, for others across the industry? maybe you could just describe the transaction how it came together and is this something that you think could be more commonplace for you for others across the industry

Speaker 1: Yeah. This was a transaction that really started with Harvey getting a bunch of the senior people together and saying, "What can we do to differentiate ourselves in the market? What can we do for our LPs that they will appreciate, will solve a problem for them, and maybe will jumpstart some fundraising for us?" We went out and we spoke to a number of the largest LPs, and this was the result. A less than a handful of very significant LPs for us that have significant existing exposure, who also wanted to increase their exposure to Carlyle going forward. What they did was take their existing LP commitments, put them together into an SPV, also made forward commitments to that, and those were the assets. On the liability side, we had bank loans, so just banks indicated borrowing. Yeah. yeah This was a transaction that really started with Harvey getting a bunch of the senior people together and saying, "What can we do to differentiate ourselves in the market? this was a transaction that really started with harvey getting a bunch of the senior people together and saying "what can we do to differentiate ourselves in the market What can we do for our LPs that they will appreciate, will solve a problem for them, and maybe will jumpstart some fundraising for us?" We went out and we spoke to a number of the largest LPs, and this was the result. what can we do for our lps that they will appreciate will solve a problem for them and maybe will jumpstart some fundraising for us?" we went out and we spoke to a number of the largest lps and this was the result A less than a handful of very significant LPs for us that have significant existing exposure, who also wanted to increase their exposure to Carlyle going forward. a less than a handful of very significant lps for us that have significant existing exposure who also wanted to increase their exposure to carlyle going forward What they did was take their existing LP commitments, put them together into an SPV, also made forward commitments to that, and those were the assets. what they did was take their existing lp commitments put them together into an spv also made forward commitments to that and those were the assets On the liability side, we had bank loans, so just banks indicated borrowing. on the liability side we had bank loans so just banks indicated borrowing We had a preferred equity instrument, and we had a common equity instrument. The preferred and the common owned mostly by the LPs that committed to the deal alongside Carlyle, and then we placed a little bit of the preferred, some of the preferred, with third parties. It really was a structure that was a win-win. Right? The LPs got some liquidity that they could use to reallocate today. They ultimately, as investors in the structure, retained exposure to the Carlyle funds they had, and they also increased their exposure to future Carlyle funds. For us, that's $5 billion that's earmarked for the next vintage U.S. buyout fund at full fees and carry. A solution for the LPs, a great win for us. Do I think it could be replicated? I expect it will be. You need to do it in size. We had a preferred equity instrument, and we had a common equity instrument. we had a preferred equity instrument and we had a common equity instrument The preferred and the common owned mostly by the LPs that committed to the deal alongside Carlyle, and then we placed a little bit of the preferred, some of the preferred, with third parties. the preferred and the common owned mostly by the lps that committed to the deal alongside carlyle and then we placed a little bit of the preferred some of the preferred with third parties It really was a structure that was a win-win. it really was a structure that was a win-win Right? right The LPs got some liquidity that they could use to reallocate today. the lps got some liquidity that they could use to reallocate today They ultimately, as investors in the structure, retained exposure to the Carlyle funds they had, and they also increased their exposure to future Carlyle funds. they ultimately as investors in the structure retained exposure to the carlyle funds they had and they also increased their exposure to future carlyle funds For us, that's $5 billion that's earmarked for the next vintage U.S. buyout fund at full fees and carry. for us that's $5 billion that's earmarked for the next vintage u.s buyout fund at full fees and carry A solution for the LPs, a great win for us. a solution for the lps a great win for us Do I think it could be replicated? do i think it could be replicated I expect it will be. i expect it will be You need to do it in size. you need to do it in size The structure overall was more than $8 billion in size for us. I don't think this would make sense to do with too many smaller LPs, I think for LPs of significant size that are looking for liquidity, that have a long-term relationship with you, I think it makes a lot of sense. I don't think this is the last time you'll see it in the market. The structure overall was more than $8 billion in size for us. the structure overall was more than $8 billion in size for us I don't think this would make sense to do with too many smaller LPs, I think for LPs of significant size that are looking for liquidity, that have a long-term relationship with you, I think it makes a lot of sense. i don't think this would make sense to do with too many smaller lps i think for lps of significant size that are looking for liquidity that have a long-term relationship with you i think it makes a lot of sense I don't think this is the last time you'll see it in the market. i don't think this is the last time you'll see it in the market

Speaker 2: That unlocks that $5 billion commitment to the next flagship buyout. That unlocks that $5 billion commitment to the next flagship buyout. that unlocks that $5 billion commitment to the next flagship buyout

Speaker 1: That's right. That's right. that's right

Speaker 2: Great. Let's shift and talk about FRE growth margins. At your investor day earlier this year, you outlined an FRE target of $1.9+ billion, I should emphasize. Great. great Let's shift and talk about FRE growth margins. let's shift and talk about fre growth margins At your investor day earlier this year, you outlined an FRE target of $1.9+ billion , I should emphasize. at your investor day earlier this year you outlined an fre target of $1.9+ billion i should emphasize

Speaker 1: We did put the plus, yes. We did put the plus, yes. we did put the plus yes

Speaker 2: You put the plus, in 2028, which implies a 15% CAGR. You put the plus, in 2028, which implies a 15% CAGR. you put the plus in 2028 which implies a 15% cagr Can you unpack the building blocks to get there, how durable do you think this growth is, what are some of the biggest risks, if any? Can you unpack the building blocks to get there, how durable do you think this growth is, what are some of the biggest risks, if any? can you unpack the building blocks to get there how durable do you think this growth is what are some of the biggest risks if any

Speaker 1: Yeah. Again, our plan is rooted in the business as it exists today and scaling that business. We felt great about that in February, we feel great about it today. We've said a number of times, if you look at that 15% CAGR, that's not going to be the same every year. 2026, for instance, it happens to be a year where some of our funds are stepping down in management fees. We're in fundraising mode. It's a year where we're focused on fundraising and deployment and realizations that are great for our LPs. As you get into 2027 and 2028, you should see us ramp up to that ultimate $1.9+ billion and 15% CAGR number. Yeah. yeah Again, our plan is rooted in the business as it exists today and scaling that business. again our plan is rooted in the business as it exists today and scaling that business We felt great about that in February, we feel great about it today. we felt great about that in february we feel great about it today We've said a number of times, if you look at that 15% CAGR, that's not going to be the same every year. 2026, for instance, it happens to be a year where some of our funds are stepping down in management fees. we've said a number of times if you look at that 15% cagr that's not going to be the same every year 2026 for instance it happens to be a year where some of our funds are stepping down in management fees We're in fundraising mode. we're in fundraising mode It's a year where we're focused on fundraising and deployment and realizations that are great for our LPs. it's a year where we're focused on fundraising and deployment and realizations that are great for our lps As you get into 2027 and 2028, you should see us ramp up to that ultimate $1.9+ billion and 15% CAGR number. as you get into 2027 and 2028 you should see us ramp up to that ultimate $1.9+ billion and 15% cagr number We feel really strongly about the ability to achieve it simply because it's based on organic growth of the flagship funds that are in the super cycle, I mentioned before, yes, wealth is part of it's 20% of the fundraising. It's not an enormous part of it doesn't include things like retirement. I think there's a lot of ways to get there, we wanted to make sure we put out a number that we felt very confident in. $1.9 billion is something we feel confident in. We feel really strongly about the ability to achieve it simply because it's based on organic growth of the flagship funds that are in the super cycle, I mentioned before, yes, wealth is part of it's 20% of the fundraising. we feel really strongly about the ability to achieve it simply because it's based on organic growth of the flagship funds that are in the super cycle i mentioned before yes wealth is part of it's 20% of the fundraising It's not an enormous part of it doesn't include things like retirement. it's not an enormous part of it doesn't include things like retirement I think there's a lot of ways to get there, we wanted to make sure we put out a number that we felt very confident in. $1.9 billion is something we feel confident in. i think there's a lot of ways to get there we wanted to make sure we put out a number that we felt very confident in $1.9 billion is something we feel confident in

Speaker 2: Credit insurance central to the next phase of growth at Carlyle. I guess, what do you think Carlyle does uniquely well there? How are you leaning into your unique advantages as you drive the next step function growth in credit? Credit insurance central to the next phase of growth at Carlyle. credit insurance central to the next phase of growth at carlyle I guess, what do you think Carlyle does uniquely well there? i guess what do you think carlyle does uniquely well there How are you leaning into your unique advantages as you drive the next step function growth in credit? how are you leaning into your unique advantages as you drive the next step function growth in credit

Speaker 1: Yeah. I think the differentiating factor for our credit platform is really the diversification that we have. We did not build the platform based on one type of strategy. There are many successful monoline credit managers out there, but the vision that Mark Jenkins brought was that we wanted to be a solutions provider. We wanted to be able to go to a company and say, "No matter what solution you need, we have a pocket for that. If you want us to anchor your broadly syndicated loan deal, we can do that. If you want a regular way vanilla direct lending loan, we can do that. Yeah. yeah I think the differentiating factor for our credit platform is really the diversification that we have. i think the differentiating factor for our credit platform is really the diversification that we have We did not build the platform based on one type of strategy. we did not build the platform based on one type of strategy There are many successful monoline credit managers out there, but the vision that Mark Jenkins brought was that we wanted to be a solutions provider. there are many successful monoline credit managers out there but the vision that mark jenkins brought was that we wanted to be a solutions provider We wanted to be able to go to a company and say, "No matter what solution you need, we have a pocket for that. we wanted to be able to go to a company and say "no matter what solution you need we have a pocket for that If you want us to anchor your broadly syndicated loan deal, we can do that. if you want us to anchor your broadly syndicated loan deal we can do that If you want a regular way vanilla direct lending loan, we can do that. if you want a regular way vanilla direct lending loan we can do that If you need junior capital, if you need something more bespoke, if you want us to lend against a hard asset, if you want us to securitize assets for you, we can do all of that." We've been able to, over the last eight years, build that out. I guess 10 years now, geez. We've been able to build that out, and now what we need to do is scale. Every part of it, I would say, other than the CLO business, which is quite well scaled, every other part of it is built to be bigger than it is today, and is on a path to be bigger than it is today. Really the goal there is to scale all of those solutions. If you need junior capital, if you need something more bespoke, if you want us to lend against a hard asset, if you want us to securitize assets for you, we can do all of that." We've been able to, over the last eight years, build that out. if you need junior capital if you need something more bespoke if you want us to lend against a hard asset if you want us to securitize assets for you we can do all of that." we've been able to over the last eight years build that out I guess 10 years now, geez. i guess 10 years now geez We've been able to build that out, and now what we need to do is scale. we've been able to build that out and now what we need to do is scale Every part of it, I would say, other than the CLO business, which is quite well scaled, every other part of it is built to be bigger than it is today, and is on a path to be bigger than it is today. every part of it i would say other than the clo business which is quite well scaled every other part of it is built to be bigger than it is today and is on a path to be bigger than it is today Really the goal there is to scale all of those solutions. really the goal there is to scale all of those solutions I don't think there are many credit platforms out there that truly have that full set of capabilities unified under one leadership group that can face the borrower and say, "Whatever you need as a solution, we can provide it. I don't think there are many credit platforms out there that truly have that full set of capabilities unified under one leadership group that can face the borrower and say, "Whatever you need as a solution, we can provide it. i don't think there are many credit platforms out there that truly have that full set of capabilities unified under one leadership group that can face the borrower and say "whatever you need as a solution we can provide it

Speaker 2: Given some of these newer strategies, not just in credit, but you look across the rest of the platform, if you were to zoom out five years from now, what portion of the overall firm earnings do you think could be from businesses that barely existed five years ago? Given some of these newer strategies, not just in credit, but you look across the rest of the platform, if you were to zoom out five years from now, what portion of the overall firm earnings do you think could be from businesses that barely existed five years ago? given some of these newer strategies not just in credit but you look across the rest of the platform if you were to zoom out five years from now what portion of the overall firm earnings do you think could be from businesses that barely existed five years ago

Speaker 1: When we put together our plan for 2028, if you look at where the revenues are coming from, it's about a third, a third, a third between private equity, private credit, and our AlpInvest business. That is a far cry from what we used to be. I think five years ago, it was at least two-thirds private equity. We've diversified. The firm is much more durable for that. We don't rely on one particular channel of fundraising, right? We have insurance, yes. We have wealth, yes. We have our traditional institutional. We don't rely any longer on one flagship fund or one strategy, right? If the market for private equity is not that active, but there's a vibrant secondary market, people need liquidity solutions. Our AlpInvest business is incredibly well-positioned to take advantage of that as it has for the past five years. When we put together our plan for 2028, if you look at where the revenues are coming from, it's about a third, a third, a third between private equity, private credit, and our AlpInvest business. when we put together our plan for 2028 if you look at where the revenues are coming from it's about a third a third a third between private equity private credit and our alpinvest business That is a far cry from what we used to be. that is a far cry from what we used to be I think five years ago, it was at least two-thirds private equity. i think five years ago it was at least two-thirds private equity We've diversified. we've diversified The firm is much more durable for that. the firm is much more durable for that We don't rely on one particular channel of fundraising, right? we don't rely on one particular channel of fundraising right We have insurance, yes. we have insurance yes We have wealth, yes. we have wealth yes We have our traditional institutional. we have our traditional institutional We don't rely any longer on one flagship fund or one strategy, right? we don't rely any longer on one flagship fund or one strategy right If the market for private equity is not that active, but there's a vibrant secondary market, people need liquidity solutions. if the market for private equity is not that active but there's a vibrant secondary market people need liquidity solutions Our AlpInvest business is incredibly well-positioned to take advantage of that as it has for the past five years. our alpinvest business is incredibly well-positioned to take advantage of that as it has for the past five years I think wherever the markets move now in the private space, one part or another of our business is well-positioned to take advantage of that, and that's going to be the difference between Carlyle going forward and maybe what we were in the past. I think wherever the markets move now in the private space, one part or another of our business is well-positioned to take advantage of that, and that's going to be the difference between Carlyle going forward and maybe what we were in the past. i think wherever the markets move now in the private space one part or another of our business is well-positioned to take advantage of that and that's going to be the difference between carlyle going forward and maybe what we were in the past

Speaker 2: You mentioned AlpInvest. I want to dig in there for a moment. It's become one of the firm's clearest growth engines, and today it looks less like a secondaries business and more like a private market solutions platform. You mentioned AlpInvest. you mentioned alpinvest I want to dig in there for a moment. i want to dig in there for a moment It's become one of the firm's clearest growth engines, and today it looks less like a secondaries business and more like a private market solutions platform. it's become one of the firm's clearest growth engines and today it looks less like a secondaries business and more like a private market solutions platform

Speaker 1: Right. Right. right

Speaker 2: How much larger can that opportunity become? Talk about some of the steps you're taking over the next couple of years to further expand AlpInvest. How much larger can that opportunity become? how much larger can that opportunity become Talk about some of the steps you're taking over the next couple of years to further expand AlpInvest. talk about some of the steps you're taking over the next couple of years to further expand alpinvest

Speaker 1: AlpInvest has been an enormous success story for us. It's over $100 billion in AUM now. It's grown its FRE, it grew 60% last year. It's grown 4x in the last four years. This is really all about the natural evolution of private markets. Any market that starts out as esoteric, at first you can charge high fees, the returns are outsized. Over time, it moves to be more normalized. More people come in, there's pressure on the returns, then eventually what happens is people need liquidity. Private markets are now coming to that point where people want liquidity solutions. To your point, AlpInvest started out as a primaries allocator, then it went into co-investment, then buying secondaries. Now it also has solutions in portfolio finance. It could do securitizations like we just did for our U.S. buyout franchise. AlpInvest has been an enormous success story for us. alpinvest has been an enormous success story for us It's over $100 billion in AUM now. it's over $100 billion in aum now It's grown its FRE, it grew 60% last year. it's grown its fre it grew 60% last year It's grown 4x in the last four years. it's grown 4x in the last four years This is really all about the natural evolution of private markets. this is really all about the natural evolution of private markets Any market that starts out as esoteric, at first you can charge high fees, the returns are outsized. any market that starts out as esoteric at first you can charge high fees the returns are outsized Over time, it moves to be more normalized. over time it moves to be more normalized More people come in, there's pressure on the returns, then eventually what happens is people need liquidity. more people come in there's pressure on the returns then eventually what happens is people need liquidity Private markets are now coming to that point where people want liquidity solutions. private markets are now coming to that point where people want liquidity solutions To your point, AlpInvest started out as a primaries allocator, then it went into co-investment, then buying secondaries. to your point alpinvest started out as a primaries allocator then it went into co-investment then buying secondaries Now it also has solutions in portfolio finance. now it also has solutions in portfolio finance It could do securitizations like we just did for our U.S. buyout franchise. it could do securitizations like we just did for our u.s buyout franchise NAV loans, it's moving into the credit space. Again, it's like our credit business. We want to be able to approach GPs and LPs around the world and say, "What do you need? What type of solution do you need?" Because we have a pocket that can provide that. I think that that will continue to grow with the private markets. What rate can AlpInvest grow at? At the rate that the private markets grow, because the more capital is out there in private markets, the more participants you have, the more there will be needs for liquidity. Frankly, I will get the question sometimes, well, isn't this a moment in time because private equity has not exited as much, perhaps as it has in the past? That's one reason. When we talk to LPs, there are many other reasons they want liquidity. NAV loans, it's moving into the credit space. nav loans it's moving into the credit space Again, it's like our credit business. again it's like our credit business We want to be able to approach GPs and LPs around the world and say, "What do you need? we want to be able to approach gps and lps around the world and say "what do you need What type of solution do you need?" Because we have a pocket that can provide that. what type of solution do you need?" because we have a pocket that can provide that I think that that will continue to grow with the private markets. i think that that will continue to grow with the private markets What rate can AlpInvest grow at? what rate can alpinvest grow at At the rate that the private markets grow, because the more capital is out there in private markets, the more participants you have, the more there will be needs for liquidity. at the rate that the private markets grow because the more capital is out there in private markets the more participants you have the more there will be needs for liquidity Frankly, I will get the question sometimes, well, isn't this a moment in time because private equity has not exited as much, perhaps as it has in the past? frankly i will get the question sometimes well isn't this a moment in time because private equity has not exited as much perhaps as it has in the past That's one reason. that's one reason When we talk to LPs, there are many other reasons they want liquidity. when we talk to lps there are many other reasons they want liquidity They want to reallocate within private equity. They want to reallocate to credit. They have liability structure issues. The fact that private equity maybe hasn't realized as much, we've actually realized quite a bit as a firm, some others haven't. That's one factor of many, this need for liquidity and liquidity solutions, it's not going away. The demand will only go up. They want to reallocate within private equity. they want to reallocate within private equity They want to reallocate to credit. they want to reallocate to credit They have liability structure issues. they have liability structure issues The fact that private equity maybe hasn't realized as much, we've actually realized quite a bit as a firm, some others haven't. the fact that private equity maybe hasn't realized as much we've actually realized quite a bit as a firm some others haven't That's one factor of many, this need for liquidity and liquidity solutions, it's not going away. that's one factor of many this need for liquidity and liquidity solutions it's not going away The demand will only go up. the demand will only go up

Speaker 2: Let's talk about private wealth, which has been a key priority for Carlyle, for the industry. What lessons has Carlyle learned from building out the wealth platform over the last couple of years, including recent experience with CTAC and investor behavior? Let's talk about private wealth, which has been a key priority for Carlyle, for the industry. let's talk about private wealth which has been a key priority for carlyle for the industry What lessons has Carlyle learned from building out the wealth platform over the last couple of years, including recent experience with CTAC and investor behavior? what lessons has carlyle learned from building out the wealth platform over the last couple of years including recent experience with ctac and investor behavior

Speaker 1: Look, we were a little bit later to the wealth process than some others. I think the team's done a phenomenal job catching us up. The brand name has resonated very well in the wealth channel. CTAC was the first thing that we did in the wealth channel, a private credit interval fund. I got to be part of that process and building that and going out into the wealth channel. The investors there are just as sophisticated as they are in the institutional channel. They have different concerns and different questions, but they are very discerning, and you have to be ready to provide phenomenal client service for them. We've now built out the private wealth business so that we have a flagship in every one of our strategies, at least one, and that's kind of new in the last 12 months for us. Look, we were a little bit later to the wealth process than some others. look we were a little bit later to the wealth process than some others I think the team's done a phenomenal job catching us up. i think the team's done a phenomenal job catching us up The brand name has resonated very well in the wealth channel. the brand name has resonated very well in the wealth channel CTAC was the first thing that we did in the wealth channel, a private credit interval fund. ctac was the first thing that we did in the wealth channel a private credit interval fund I got to be part of that process and building that and going out into the wealth channel. i got to be part of that process and building that and going out into the wealth channel The investors there are just as sophisticated as they are in the institutional channel. the investors there are just as sophisticated as they are in the institutional channel They have different concerns and different questions, but they are very discerning, and you have to be ready to provide phenomenal client service for them. they have different concerns and different questions but they are very discerning and you have to be ready to provide phenomenal client service for them We've now built out the private wealth business so that we have a flagship in every one of our strategies, at least one, and that's kind of new in the last 12 months for us. we've now built out the private wealth business so that we have a flagship in every one of our strategies at least one and that's kind of new in the last 12 months for us We're really at the very beginning of being able to offer the full suite of Carlyle investment products down the wealth channel. The response so far has been great. It is a different kind of marketing and talking. We entered into a sponsorship agreement with Oracle Red Bull Racing of Formula 1. That's been a very fun thing. I don't think we would have done that if we were only in the institutional channel. I'm still waiting for my chance to meet Max Verstappen. Things like that are just a bit of a different world and a different way of thinking. It is a channel that fully understands the need for exposure to private markets. You just can't create a truly diversified portfolio for a client now if they don't have some exposure to private markets. They're too big. They're too big a part of the economy. We're really at the very beginning of being able to offer the full suite of Carlyle investment products down the wealth channel. we're really at the very beginning of being able to offer the full suite of carlyle investment products down the wealth channel The response so far has been great. the response so far has been great It is a different kind of marketing and talking. it is a different kind of marketing and talking We entered into a sponsorship agreement with Oracle Red Bull Racing of Formula 1. we entered into a sponsorship agreement with oracle red bull racing of formula 1 That's been a very fun thing. that's been a very fun thing I don't think we would have done that if we were only in the institutional channel. i don't think we would have done that if we were only in the institutional channel I'm still waiting for my chance to meet Max Verstappen. i'm still waiting for my chance to meet max verstappen Things like that are just a bit of a different world and a different way of thinking. things like that are just a bit of a different world and a different way of thinking It is a channel that fully understands the need for exposure to private markets. it is a channel that fully understands the need for exposure to private markets You just can't create a truly diversified portfolio for a client now if they don't have some exposure to private markets. you just can't create a truly diversified portfolio for a client now if they don't have some exposure to private markets They're too big. they're too big They're too big a part of the economy. they're too big a part of the economy We have these bumps in the road, as you always have in fundraising. Right now, it's private credit. If you ask me five years from now, are wealth investors going to have more or less private market exposure than they have today? It's going to be more, it should be more because it has a place in a broadly diversified portfolio, I know the advisors in the channel understand that very well. We have these bumps in the road, as you always have in fundraising. we have these bumps in the road as you always have in fundraising Right now, it's private credit. right now it's private credit If you ask me five years from now, are wealth investors going to have more or less private market exposure than they have today? if you ask me five years from now are wealth investors going to have more or less private market exposure than they have today It's going to be more, it should be more because it has a place in a broadly diversified portfolio, I know the advisors in the channel understand that very well. it's going to be more it should be more because it has a place in a broadly diversified portfolio i know the advisors in the channel understand that very well

Speaker 2: How has your experience so far impacted your approach to new product development? What are some of the types of strategies and vehicles that we could see from Carlyle in the coming years in the wealth channel? How has your experience so far impacted your approach to new product development? how has your experience so far impacted your approach to new product development What are some of the types of strategies and vehicles that we could see from Carlyle in the coming years in the wealth channel? what are some of the types of strategies and vehicles that we could see from carlyle in the coming years in the wealth channel

Speaker 1: Yeah, I'm pretty happy with the strategies and the structures that we have for the wealth channel now. Our big step was to get at least one product for every one of our investment strategies. I'm sure there will be more, but I'm not sure that we need to have 20. We probably need to have seven that really encapsulate everything that we do, and I think we'll do that. The most important thing is that they're structured correctly for the underlying assets. There are certain assets where they really are illiquid, and you need to put them away for five or six or seven years and understand that that's not going to be a source of liquidity for you. Let the investors do their job. There are certain ones that fall in kind of the middle bucket. Credit probably is there. Yeah, I'm pretty happy with the strategies and the structures that we have for the wealth channel now. yeah i'm pretty happy with the strategies and the structures that we have for the wealth channel now Our big step was to get at least one product for every one of our investment strategies. our big step was to get at least one product for every one of our investment strategies I'm sure there will be more, but I'm not sure that we need to have 20. i'm sure there will be more but i'm not sure that we need to have 20 We probably need to have seven that really encapsulate everything that we do, and I think we'll do that. we probably need to have seven that really encapsulate everything that we do and i think we'll do that The most important thing is that they're structured correctly for the underlying assets. the most important thing is that they're structured correctly for the underlying assets There are certain assets where they really are illiquid, and you need to put them away for five or six or seven years and understand that that's not going to be a source of liquidity for you. there are certain assets where they really are illiquid and you need to put them away for five or six or seven years and understand that that's not going to be a source of liquidity for you Let the investors do their job. let the investors do their job There are certain ones that fall in kind of the middle bucket. there are certain ones that fall in kind of the middle bucket Credit probably is there. credit probably is there You can get some liquidity, but it shouldn't be your first source. There are some that are fully liquid. The structure has to match that, and I think we made a good choice when back in 2018 for CTAC, we decided to use the interval structure, which provides 5% per quarter liquidity. That's the right structure for private credit. You never want to be a forced seller in credit. I mean, if you look back at how people lost money through the great financial crisis. Generally speaking, it wasn't because they made bad credit decisions, had defaults, and poor recoveries. Generally, it was because they were a forced seller at the wrong time. When we were designing these products, we designed them that way. That's the future, I think, for these products, is that the buyer base needs to understand where they fit in the liquidity spectrum. You can get some liquidity, but it shouldn't be your first source. you can get some liquidity but it shouldn't be your first source There are some that are fully liquid. there are some that are fully liquid The structure has to match that, and I think we made a good choice when back in 2018 for CTAC, we decided to use the interval structure, which provides 5% per quarter liquidity. the structure has to match that and i think we made a good choice when back in 2018 for ctac we decided to use the interval structure which provides 5% per quarter liquidity That's the right structure for private credit. that's the right structure for private credit You never want to be a forced seller in credit. you never want to be a forced seller in credit I mean, if you look back at how people lost money through the great financial crisis. Generally speaking, it wasn't because they made bad credit decisions, had defaults, and poor recoveries. i mean if you look back at how people lost money through the great financial crisis. generally speaking it wasn't because they made bad credit decisions had defaults and poor recoveries Generally, it was because they were a forced seller at the wrong time. generally it was because they were a forced seller at the wrong time When we were designing these products, we designed them that way. when we were designing these products we designed them that way That's the future, I think, for these products, is that the buyer base needs to understand where they fit in the liquidity spectrum. that's the future i think for these products is that the buyer base needs to understand where they fit in the liquidity spectrum I think most of the advisors do. If they don't, they will learn. Once they do, then I think you'll see even more uptake because there'll be a greater understanding of how these products work within a broader portfolio. I think most of the advisors do. i think most of the advisors do If they don't, they will learn. if they don't they will learn Once they do, then I think you'll see even more uptake because there'll be a greater understanding of how these products work within a broader portfolio. once they do then i think you'll see even more uptake because there'll be a greater understanding of how these products work within a broader portfolio

Speaker 2: While there's a lot of focus on the wealth channel, it seems the retirement channel may emerge as a new channel. While there's a lot of focus on the wealth channel, it seems the retirement channel may emerge as a new channel. while there's a lot of focus on the wealth channel it seems the retirement channel may emerge as a new channel

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Understandably, it's not in your targets for 2028. I guess what still needs to happen for private markets to become mainstream inside defined contribution plans? Talk about the steps you're taking over the next 12, 24 months to capture this opportunity. Understandably, it's not in your targets for 2028. understandably it's not in your targets for 2028 I guess what still needs to happen for private markets to become mainstream inside defined contribution plans? i guess what still needs to happen for private markets to become mainstream inside defined contribution plans Talk about the steps you're taking over the next 12, 24 months to capture this opportunity. talk about the steps you're taking over the next 12 24 months to capture this opportunity

Speaker 1: Yeah. In a lot of ways, if you think about where private markets assets should sit, it's retirement. Really, the first uptake for private markets were pension funds, which are thinking about long-term retirement liabilities. It only makes sense now that eventually they make their way into individuals' retirement planning. I think just from an asset management standpoint, there is a natural pull there. The difficulties tend to be a little bit more around the regulation. It is a heavily regulated space. It is a unique space that has a lot of rules that others don't. What we're working through as an industry right now is how do you fit there? I think first it will be part of a broader portfolio solution, so a target-date fund or something of that nature. Yeah. yeah In a lot of ways, if you think about where private markets assets should sit, it's retirement. in a lot of ways if you think about where private markets assets should sit it's retirement Really, the first uptake for private markets were pension funds, which are thinking about long-term retirement liabilities. really the first uptake for private markets were pension funds which are thinking about long-term retirement liabilities It only makes sense now that eventually they make their way into individuals' retirement planning. it only makes sense now that eventually they make their way into individuals' retirement planning I think just from an asset management standpoint, there is a natural pull there. i think just from an asset management standpoint there is a natural pull there The difficulties tend to be a little bit more around the regulation. the difficulties tend to be a little bit more around the regulation It is a heavily regulated space. it is a heavily regulated space It is a unique space that has a lot of rules that others don't. it is a unique space that has a lot of rules that others don't What we're working through as an industry right now is how do you fit there? what we're working through as an industry right now is how do you fit there I think first it will be part of a broader portfolio solution, so a target-date fund or something of that nature. i think first it will be part of a broader portfolio solution so a target-date fund or something of that nature Mentioned before, we're partnering with SEI on an interval fund product that will package a variety of private markets investment solutions into a sort of one vehicle, effectively. Same thing with our partnership with AllianceBernstein and Brookfield, where we're doing the private equity, Brookfield's doing real assets, AllianceBernstein's doing some credit, and we're packaging it all as one solution. That's probably the first step. I think we're probably a ways away from having one-off individual asset solutions for retirement investors, but we'll see over the next few years. I expect it will be more of an evolution. It's not going to happen overnight. It will likely be a slower uptake. Again, if you think about just intellectually where these assets should sit and what type of liability they should sit against, retirement just makes a ton of sense. I expect it will grow consistently over time. Mentioned before, we're partnering with SEI on an interval fund product that will package a variety of private markets investment solutions into a sort of one vehicle, effectively. mentioned before we're partnering with sei on an interval fund product that will package a variety of private markets investment solutions into a sort of one vehicle effectively Same thing with our partnership with AllianceBernstein and Brookfield, where we're doing the private equity, Brookfield's doing real assets, AllianceBernstein's doing some credit, and we're packaging it all as one solution. same thing with our partnership with alliancebernstein and brookfield where we're doing the private equity brookfield's doing real assets alliancebernstein's doing some credit and we're packaging it all as one solution That's probably the first step. that's probably the first step I think we're probably a ways away from having one-off individual asset solutions for retirement investors, but we'll see over the next few years. i think we're probably a ways away from having one-off individual asset solutions for retirement investors but we'll see over the next few years I expect it will be more of an evolution. i expect it will be more of an evolution It's not going to happen overnight. it's not going to happen overnight It will likely be a slower uptake. it will likely be a slower uptake Again, if you think about just intellectually where these assets should sit and what type of liability they should sit against, retirement just makes a ton of sense. again if you think about just intellectually where these assets should sit and what type of liability they should sit against retirement just makes a ton of sense I expect it will grow consistently over time. i expect it will grow consistently over time

Speaker 2: Let's shift and talk about AI. I know it's a focus for you- Let's shift and talk about AI. let's shift and talk about ai I know it's a focus for you- i know it's a focus for you-

Speaker 1: I've heard of it, yeah I've heard of it, yeah i've heard of it yeah

Speaker 2: at Carlyle. Yes. Across the investment process- at Carlyle. at carlyle Yes. yes Across the investment process- across the investment process-

Speaker 1: Yeah Yeah yeah

Speaker 2: across portfolio management, firm operations. As we move beyond experimentation, where are you seeing measurable productivity gains today, and when do you expect- across portfolio management, firm operations. across portfolio management firm operations As we move beyond experimentation, where are you seeing measurable productivity gains today, and when do you expect- as we move beyond experimentation where are you seeing measurable productivity gains today and when do you expect-

Speaker 1: Sure Sure sure

Speaker 2: those benefits to become more visible in the economics of the business? those benefits to become more visible in the economics of the business? those benefits to become more visible in the economics of the business

Speaker 1: Yeah. It's a great question. AI is going to revolutionize eventually every single industry in one way or another. I will tell you, in our industry today, right now, it is helping us with efficiency. It is able to do things faster than human beings can in certain instances, with the proper human oversight. We are finding efficiency gains in all sorts of things, payment processing, putting together slide decks. I think our junior folks are probably very happy to have a lot of the AI tools that we have now. It just allows them to get work done more efficiently and faster than maybe it used to be when I was putting together slide decks. There's a lot of that that really has had an immediate impact on the business. Yeah. yeah It's a great question. it's a great question AI is going to revolutionize eventually every single industry in one way or another. ai is going to revolutionize eventually every single industry in one way or another I will tell you, in our industry today, right now, it is helping us with efficiency. i will tell you in our industry today right now it is helping us with efficiency It is able to do things faster than human beings can in certain instances, with the proper human oversight. it is able to do things faster than human beings can in certain instances with the proper human oversight We are finding efficiency gains in all sorts of things, payment processing, putting together slide decks. we are finding efficiency gains in all sorts of things payment processing putting together slide decks I think our junior folks are probably very happy to have a lot of the AI tools that we have now. i think our junior folks are probably very happy to have a lot of the ai tools that we have now It just allows them to get work done more efficiently and faster than maybe it used to be when I was putting together slide decks. it just allows them to get work done more efficiently and faster than maybe it used to be when i was putting together slide decks There's a lot of that that really has had an immediate impact on the business. there's a lot of that that really has had an immediate impact on the business I think the longer-term stuff, we are spending an enormous amount of time on. We are very much believers that AI is going to significantly impact the investment process going forward. I wouldn't say it's there yet. That's where we're more in the lab. We are working with some of the leaders in the AI industry about how to properly train these models and have them bring more value to decision-making. At this particular moment, most of the value really is in sort of the efficiency gains and speeding along the processes and decision-making that was already happening. In the next five years, you're going to see the decision-making itself start to get impacted, and that will be very interesting. I think the longer-term stuff, we are spending an enormous amount of time on. i think the longer-term stuff we are spending an enormous amount of time on We are very much believers that AI is going to significantly impact the investment process going forward. we are very much believers that ai is going to significantly impact the investment process going forward I wouldn't say it's there yet. i wouldn't say it's there yet That's where we're more in the lab. that's where we're more in the lab We are working with some of the leaders in the AI industry about how to properly train these models and have them bring more value to decision-making. we are working with some of the leaders in the ai industry about how to properly train these models and have them bring more value to decision-making At this particular moment, most of the value really is in sort of the efficiency gains and speeding along the processes and decision-making that was already happening. at this particular moment most of the value really is in sort of the efficiency gains and speeding along the processes and decision-making that was already happening In the next five years, you're going to see the decision-making itself start to get impacted, and that will be very interesting. in the next five years you're going to see the decision-making itself start to get impacted and that will be very interesting

Speaker 2: Any way to quantify the benefits so far? Any way to quantify the benefits so far? any way to quantify the benefits so far

Speaker 1: Boy, I don't think so. It's a really difficult thing to measure. I wouldn't tell you that we have particular measurement of, oh, we saved this many hours, or we saved this many dollars. The other thing that every industry is going to have to grapple with, which people are starting to think about now, is that AI is not free, right? You have to pay for this. I was half-joking with someone the other day, like maybe we'll still need to hire junior people. Of course, we're going to need to hire junior people, right? AI isn't going to do everything for us. There is going to have to be a balance of what do you use AI for, especially when you're talking about major, significant computing power, and what can you use maybe lesser technology for, or simply have a human do? Boy, I don't think so. boy i don't think so It's a really difficult thing to measure. it's a really difficult thing to measure I wouldn't tell you that we have particular measurement of, oh, we saved this many hours, or we saved this many dollars. i wouldn't tell you that we have particular measurement of oh we saved this many hours or we saved this many dollars The other thing that every industry is going to have to grapple with, which people are starting to think about now, is that AI is not free, right? the other thing that every industry is going to have to grapple with which people are starting to think about now is that ai is not free right You have to pay for this. you have to pay for this I was half-joking with someone the other day, like maybe we'll still need to hire junior people. i was half-joking with someone the other day like maybe we'll still need to hire junior people Of course, we're going to need to hire junior people, right? of course we're going to need to hire junior people right AI isn't going to do everything for us. ai isn't going to do everything for us There is going to have to be a balance of what do you use AI for, especially when you're talking about major, significant computing power, and what can you use maybe lesser technology for, or simply have a human do? there is going to have to be a balance of what do you use ai for especially when you're talking about major significant computing power and what can you use maybe lesser technology for or simply have a human do

Speaker 2: How do you think about the implications for talent management. How do you think about the implications for talent management. how do you think about the implications for talent management

Speaker 1: I think it's. I think it's. i think it's

Speaker 2: and recruiting? and recruiting? and recruiting

Speaker 1: It's something we think a lot about because, on the one hand, you want to understand when you're evaluating talent that somebody is doing their own work and that their thoughts are their thoughts, and they're not getting them from AI. That said, the moment they come in to do work, you expect them to use AI. You're really trying to identify people that have that creative thinking aspect of the work that we do, but also can interact with the tools, including AI. I think ultimately, it will change things, but we will still have a structure of mentorship. It will really still be about the senior people training the junior people about what makes a good investment, how do you look at a company, how do you look at an investment process. It's something we think a lot about because, on the one hand, you want to understand when you're evaluating talent that somebody is doing their own work and that their thoughts are their thoughts, and they're not getting them from AI. it's something we think a lot about because on the one hand you want to understand when you're evaluating talent that somebody is doing their own work and that their thoughts are their thoughts and they're not getting them from ai That said, the moment they come in to do work, you expect them to use AI. that said the moment they come in to do work you expect them to use ai You're really trying to identify people that have that creative thinking aspect of the work that we do, but also can interact with the tools, including AI. you're really trying to identify people that have that creative thinking aspect of the work that we do but also can interact with the tools including ai I think ultimately, it will change things, but we will still have a structure of mentorship. i think ultimately it will change things but we will still have a structure of mentorship It will really still be about the senior people training the junior people about what makes a good investment, how do you look at a company, how do you look at an investment process. it will really still be about the senior people training the junior people about what makes a good investment how do you look at a company how do you look at an investment process AI will be a tool and an important part of that, but there still will be that apprenticeship model in the investment industry. I think hopefully what it will do, and I tend to be optimistic about these things, hopefully what it will do is reduce the amount of rote work and really increase the focus that we can have on the key decision-making that goes into an investment. AI will be a tool and an important part of that, but there still will be that apprenticeship model in the investment industry. ai will be a tool and an important part of that but there still will be that apprenticeship model in the investment industry I think hopefully what it will do, and I tend to be optimistic about these things, hopefully what it will do is reduce the amount of rote work and really increase the focus that we can have on the key decision-making that goes into an investment. i think hopefully what it will do and i tend to be optimistic about these things hopefully what it will do is reduce the amount of rote work and really increase the focus that we can have on the key decision-making that goes into an investment

Speaker 2: If we look out three to five years, is it primarily an efficiency tool, or you think it can become a genuine source of competitive advantage? If we look out three to five years, is it primarily an efficiency tool, or you think it can become a genuine source of competitive advantage? if we look out three to five years is it primarily an efficiency tool or you think it can become a genuine source of competitive advantage

Speaker 1: I think it's both. I think it's absolutely an efficiency tool, but I also think in terms of decision-making, the technology will get to a place where it can be helpful. I don't think that we will ever fully replace the human element, but I think it can be very helpful and a huge part of that. I would hope that we're at the forefront of using AI in our decision-making process because I think it's a very powerful tool. I will say, though, that some of the predictions of software companies not existing or anything don't strike me as that credible. Just because somebody can go and vibe code a CRM solution doesn't mean that that's the most efficient thing to do, or you can't imagine every single company vibe coding every single application that they need. I think it's both. i think it's both I think it's absolutely an efficiency tool, but I also think in terms of decision-making, the technology will get to a place where it can be helpful. i think it's absolutely an efficiency tool but i also think in terms of decision-making the technology will get to a place where it can be helpful I don't think that we will ever fully replace the human element, but I think it can be very helpful and a huge part of that. i don't think that we will ever fully replace the human element but i think it can be very helpful and a huge part of that I would hope that we're at the forefront of using AI in our decision-making process because I think it's a very powerful tool. i would hope that we're at the forefront of using ai in our decision-making process because i think it's a very powerful tool I will say, though, that some of the predictions of software companies not existing or anything don't strike me as that credible. i will say though that some of the predictions of software companies not existing or anything don't strike me as that credible Just because somebody can go and vibe code a CRM solution doesn't mean that that's the most efficient thing to do, or you can't imagine every single company vibe coding every single application that they need. just because somebody can go and vibe code a crm solution doesn't mean that that's the most efficient thing to do or you can't imagine every single company vibe coding every single application that they need This is actually a significant concern in many ways because of the cybersecurity threat that can come from it. AI will be incorporated in just about everything that we do, and it will simply be sort of like the internet, right? We don't talk about using the internet. Every company obviously interacts with the internet today. Every company will interact with AI, and it will be embedded in everything that we do. This is actually a significant concern in many ways because of the cybersecurity threat that can come from it. this is actually a significant concern in many ways because of the cybersecurity threat that can come from it AI will be incorporated in just about everything that we do, and it will simply be sort of like the internet, right? ai will be incorporated in just about everything that we do and it will simply be sort of like the internet right We don't talk about using the internet. we don't talk about using the internet Every company obviously interacts with the internet today. every company obviously interacts with the internet today Every company will interact with AI, and it will be embedded in everything that we do. every company will interact with ai and it will be embedded in everything that we do

Speaker 2: We're almost up on time, final question. If you look to Carlyle of 2030, which of your emerging growth initiatives do you think has the potential to be the most transformational to the firm? What do you think investors are most underestimating about where Carlyle will be in five years? We're almost up on time, final question. we're almost up on time final question If you look to Carlyle of 2030, which of your emerging growth initiatives do you think has the potential to be the most transformational to the firm? if you look to carlyle of 2030 which of your emerging growth initiatives do you think has the potential to be the most transformational to the firm What do you think investors are most underestimating about where Carlyle will be in five years? what do you think investors are most underestimating about where carlyle will be in five years

Speaker 1: Well, the theme I think that AI has the greatest transformational impact both for our portfolio companies and for the firm, I would say that's true of just about every company in every industry. I mean, it is a revolution that we're going through. In terms of Carlyle, as I said before, I think we have built the foundation of being a full solutions provider in private markets across AlpInvest, credit, private equity, scale is really what we need to focus on now. I think what people underestimate about Carlyle is how that diversity and durability will be a huge advantage going forward. To not be a monoline, to be able to move wherever value is across private markets, that's an enormously valuable thing. Well, the theme I think that AI has the greatest transformational impact both for our portfolio companies and for the firm, I would say that's true of just about every company in every industry. well the theme i think that ai has the greatest transformational impact both for our portfolio companies and for the firm i would say that's true of just about every company in every industry I mean, it is a revolution that we're going through. i mean it is a revolution that we're going through In terms of Carlyle, as I said before, I think we have built the foundation of being a full solutions provider in private markets across AlpInvest, credit, private equity, scale is really what we need to focus on now. in terms of carlyle as i said before i think we have built the foundation of being a full solutions provider in private markets across alpinvest credit private equity scale is really what we need to focus on now I think what people underestimate about Carlyle is how that diversity and durability will be a huge advantage going forward. i think what people underestimate about carlyle is how that diversity and durability will be a huge advantage going forward To not be a monoline, to be able to move wherever value is across private markets, that's an enormously valuable thing. to not be a monoline to be able to move wherever value is across private markets that's an enormously valuable thing To do that across many different geographies around the world, that's something that's hard to replicate, I think it will serve us well, it will give us the opportunity to, I think, really be one of the firms that continues on for a very long time in private markets and has a very durable brand. To do that across many different geographies around the world, that's something that's hard to replicate, I think it will serve us well, it will give us the opportunity to, I think, really be one of the firms that continues on for a very long time in private markets and has a very durable brand. to do that across many different geographies around the world that's something that's hard to replicate i think it will serve us well it will give us the opportunity to i think really be one of the firms that continues on for a very long time in private markets and has a very durable brand

Speaker 2: We'll have to leave it there. Justin, thank you so much We'll have to leave it there. we'll have to leave it there Justin, thank you so much justin thank you so much