Carlyle Group Q2 Earnings Call Highlights

Key Points

• Record quarterly performance: Carlyle reported $472 million in distributable earnings, or $1.07 per share, while fee-related earnings rose 11% year over year to a record $358 million. Assets under management also reached a record $485 billion.
• Strong fundraising momentum: The firm raised $16.8 billion during the quarter and $56 billion over the past year, with nearly all flagship strategies expected to seek capital over the next 24 months. Its wealth business also grew rapidly, with Evergreen Wealth assets increasing more than 60% year over year to $20 billion.
• Higher realizations and shareholder returns: Realized proceeds exceeded $3.9 billion in the quarter, helping drive a sharp increase in private-equity distributable earnings. Carlyle returned nearly $7 billion to clients and repurchased or withheld $304 million of shares, while maintaining its $0.35 quarterly dividend.

Carlyle Group NASDAQ: CG reported second-quarter results marked by record fee-related earnings, strong fundraising and higher realized performance revenue, as the alternative asset manager said it was entering a period in which nearly all of its core strategies will be seeking capital.

Distributable earnings totaled $472 million, or $1.07 per share, representing the company’s strongest pre-tax distributable-earnings quarter in nearly four years, Chief Executive Officer Harvey Schwartz said. Fee-related earnings reached a record $358 million, up 11% from a year earlier, while assets under management rose to a record $485 billion.

“Our momentum is a result of disciplined execution, focusing on investment performance, and delivering on our strategic plan,” Schwartz said.

Fundraising and asset growth

Carlyle raised $16.8 billion during the quarter and $56 billion over the past 12 months, a 10% increase from the prior-year period. Organic inflows reached $30 billion in the first half of 2026, another company record, according to Schwartz.

The quarter included $5 billion of commitments earmarked for Carlyle’s next U.S. buyout fund, which has begun marketing. Management said the firm expects virtually all its flagship strategies—including secondaries, portfolio finance and credit opportunities—to be in the market over the next 24 months.

Schwartz characterized the fundraising environment as a “super cycle” and said the company remains confident in its previously discussed $200 billion fundraising opportunity. He said Carlyle’s sector and geographic focus aligned with investor demand, particularly in areas including industrials, defense, infrastructure and healthcare.

Management also highlighted growth in its wealth business. Gross sales across Evergreen Wealth strategies exceeded $7 billion over the past year, lifting assets in those strategies to $20 billion, up more than 60% year over year. Chief Financial Officer Justin Plouffe said wealth-platform inflows were more than 60% higher year to date than in the prior year.

Segment results and realization activity

Carlyle AlpInvest generated record distributable earnings of $96 million and fee-related earnings of $87 million, up 27% from the second quarter of 2025. The segment’s assets under management rose 16% year over year to $112 billion, supported by $4.5 billion of inflows into secondaries, portfolio-finance and evergreen strategies.

The firm’s second vintage single-asset secondary strategy closed at four times the size of its predecessor, Plouffe said. Schwartz said the business is benefiting from both cyclical demand for liquidity and a broader shift toward private-market portfolio and financing solutions.

Global Credit posted record distributable earnings of $158 million, more than 30% above the prior-year period. Fee-related earnings of $138 million were also a record, driven by $93 million of transaction fees and $54 million of fee-related performance revenue. The segment had $211 billion of assets under management and deployed $7 billion during the quarter, led by U.S. liquid credit, direct lending and opportunistic credit strategies.

Global Private Equity reported fee-related earnings of $134 million and distributable earnings of $219 million. The segment’s distributable earnings increased nearly 50% sequentially, reflecting higher net realized performance revenue. Realized proceeds were $3.9 billion in the quarter and more than $20 billion over the trailing 12 months.

Across the company, Carlyle returned nearly $7 billion to clients during the quarter and $37 billion over the past year. In U.S. buyout, the firm returned 23% of the strategy’s fair value to investors over the previous 12 months, which Schwartz said was more than twice the industry average cited by the company.

Plouffe said net accrued performance revenues stood at $2.4 billion, representing nearly $7 of pre-tax earnings per share in potential future shareholder earnings.

Capital markets, investments and strategic initiatives

Fund management fees totaled $560 million, up 3% sequentially. Transaction fees reached a record $111 million, more than double the year-earlier level, while fee-related performance revenue rose to a record $89 million, more than twice the level reported in the second quarter of 2025.

Management attributed the transaction-fee increase to capital markets activity tied to investments and fundraising, including the Surventis coatings-business carve-out from BASF, MAI Capital, and Tsukiko, a Japanese construction company. Schwartz said U.S. capital markets fees exceeded $100 million during the quarter.

While management does not expect transaction-fee levels to be consistent every quarter, Schwartz said the capital-markets business has become embedded in the firm’s operations and should expand alongside investment activity and larger fund launches.

In Global Credit, Carlyle and Fortitude Re announced a second block reinsurance transaction with Unum. The deal is expected to close later this year and, upon closing, is expected to add more than $5 billion to Global Credit assets under management.

Carlyle also launched a dedicated defense and industrials platform and announced its first transaction: the acquisition of Secturion Systems, an NSA-certified hardware data-encryption provider. Schwartz said the initiative builds on Carlyle’s longstanding defense, aerospace and government-services investment practice, while providing a dedicated middle-market-focused investment capability.

Margins, capital returns and outlook

Fee-related earnings margin was 47% in the quarter. Plouffe said Carlyle expects its compensation ratio to be roughly consistent with last year, at about 47%, as the company invests in personnel, technology, artificial intelligence and its wealth platform. He said margins could rise in 2027 and 2028 as fundraising activity begins to flow through financial results.

The company declared a quarterly dividend of $0.35 per common share. It also deployed a record $304 million to repurchase or withhold 6.7 million shares during the quarter, reducing its adjusted share count by more than 1% year to date. Carlyle had $1.6 billion remaining under its $2 billion repurchase authorization at quarter-end.

Schwartz said the company continues to favor a capital-light model, while remaining willing to deploy balance-sheet capital selectively when it believes the potential return is compelling. Plouffe said management entered the third quarter with momentum across all three operating segments and expects solid capital markets to support additional realizations and investments.

About Carlyle Group (NASDAQ:CG)

The Carlyle Group NASDAQ: CG is a global alternative asset manager that invests across a range of strategies including private equity, real assets (such as real estate and infrastructure), global credit, and investment solutions. Founded in 1987 and headquartered in Washington, DC, Carlyle raises and manages investment funds that acquire, operate and exit companies and assets on behalf of institutional and private investors. The firm is publicly traded on the Nasdaq exchange and operates as an asset manager and investment advisor rather than as an operating company.

Carlyle's core activities include sourcing and executing private equity buyouts and growth investments, originating and managing credit and financing solutions, and acquiring and operating real asset portfolios.

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