What Management Said
Read the full Q4 2025 transcript ↗Earlier this morning, we issued a press release and a detailed earnings presentation, which is available on our Investor Relations website. We have provided reconciliation of these measures to GAAP in our earnings release to the extent reasonably available. In order to ensure participation by everyone on the call today, please limit yourself to one question and return to the queue for any additional follow-ups. We delivered record fee-related earnings, up 12% year-over-year, materially exceeding our original forecast.
We closed out the year with record assets under management of $477 billion, driven by strong investment performance and robust fundraising across the platform. The IPO raised more than $7 billion and an equity valuation of $49 billion, a milestone transaction for Carlyle and the broader market. We returned $18 billion of capital to investors in 2025 and $18 billion in 2024. Our teams remain highly focused on returning capital to our investors, and we expect exits momentum to continue into 2026.
Moving on to Carlyle AlpInvest, 2025 was a record year of growth, reinforcing AlpInvest's position as one of the most influential private market solutions platforms globally. AlpInvest returned over $10 billion to our investors and invested a record $14 billion, highlighting both the breadth of the market opportunity and the scale at which the platform is operating. Demand for secondary solutions remains strong as investors seek liquidity and portfolio optimization, and Carlyle AlpInvest continues to be a meaningful contributor to FRE growth and platform differentiation. Our performance continues to be strong, with realized losses across the portfolio running at an average of just 10 basis points per year over the past decade.
What went well
- 2025 was a record year for Carlyle, with record fee-related earnings of $1.24 billion, up 12% year-over-year at a 12% organic growth rate, materially exceeding the original forecast.
- Full-year FRE margin was a record 47%, up from 46% last year.
- The firm generated $54 billion of inflows in 2025, up 32% year-over-year and significantly outperforming the original $40 billion target, led by Global Credit and Carlyle AlpInvest which each increased more than 60%.
- Record assets under management of $477 billion were reached, and total fee revenues were a record $2.6 billion for the year at a 10% organic growth rate.
- Transaction fees were a record $225 million, up almost 40% year-over-year.
- Deployment was a record $54 billion in 2025, up more than 25%, and realized proceeds totaled $34 billion, almost 20% higher year-over-year and the second best year on record.
- The Medline IPO raised more than $7 billion at a $49 billion equity valuation, the largest sponsor-backed IPO of all time, the largest healthcare IPO ever, and the largest IPO of 2025, now trading more than 50% above its IPO price.
- Carlyle was the number one private equity sponsor globally by IPO proceeds since 2024, generating roughly $10 billion of IPO issuance over two years.
- Carlyle AlpInvest generated record FRE of $274 million (up nearly 60%) and record DE of $319 million (up almost 70%), and closed its largest-ever secondary strategy at $20 billion.
- Global Credit delivered record FRE of $402 million, up 21%, with net realized performance revenue tripling year-over-year and record DE of $481 million; Carlyle priced a record 39 CLOs and CLO inflows of $7 billion were up almost 20%.
- Distributable earnings were $1.7 billion for the year ($4.02 per share), up 11% and the highest since 2022, and the firm returned a record $1.2 billion of capital to shareholders.
- Evergreen Wealth inflows were a record in 2025, more than doubling the prior record set in 2024, and wealth headcount grew approximately 50%.
What went wrong
- For the fourth quarter, fee revenues of $670 million increased only 2% year-over-year and FRE was $290 million.
- Global private equity's margin declined a bit during the year even as overall firm margin expanded.
- AlpInvest had negative catch-up fee dynamics in the quarter, with catch-up fees earlier in the year, though management clarified they were not negative in Q4.
- Market volatility in the days leading up to the call created jitters, with credit spreads moving a bit and hesitation as investors readjusted portfolios.
- Net IRRs on the CP VII fund remain an acknowledged area with work to do, as realizations are expected before performance revenues come in.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Multi-year financial targets | 2026 shareholder update on February 26th | will share multi-year financial targets and strategic direction at the event |
| Realizations / exits momentum | into 2026 | expect exits momentum to continue into 2026 |
| Corporate private equity proceeds | year to date 2026 | already signed or closed $7 billion of proceeds year to date |
| Fund 9 fundraising and capital priorities | 2026 | more detail to be provided February 26th; investing for growth remains the priority with buybacks important |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Fee-related earnings (full year) | +12% | sustained operating momentum across the firm, a 12% organic growth rate |
| Total fee revenues (full year) | +10% organic | driven by Carlyle AlpInvest up 46% and Global Credit up 13% |
| Inflows (full year) | +32% | led by Global Credit and Carlyle AlpInvest, which each increased more than 60% |
| Deployment (full year) | +25% | led by a more than 40% increase at Carlyle AlpInvest and nearly 30% growth in Global Private Equity |
| Realized proceeds (full year) | +20% | improving exit conditions; returned 17% of beginning value, above industry average |
| Transaction fees (full year) | +40% | record $225 million as the capital markets business scaled |
| Carlyle AlpInvest FRE (full year) | +60% | strong institutional and global wealth fundraising and scale benefits, almost 4x the level from two years ago |
| Carlyle AlpInvest DE (Q4) | +12% | continued growth; net accrued carry ended the year at $656 million, up 21% |
| Global Credit FRE (Q4) | +4% | increased to $102 million; DE up 7% to $123 million |
| Q4 fee revenues | +2% | fee revenues of $670 million with more than half of $9.2 billion Q4 inflows from Global Credit |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Private equity realizations and IPO leadership | industry criticized for low monetizations | Carlyle proved an exception as the number one PE sponsor globally by IPO proceeds, with Medline the largest sponsor-backed IPO of all time | — |
| Direct lending and credit expansion | systematically and thoughtfully positioning over the last couple of years | record originations quarter, new head of direct lending and senior origination hires, positioned for the opportunity set to open up | — |
| Software exposure amid AI angst | never a big driver for Carlyle | 6% of total AUM using the broadest definition, right on top of the CLO index, not viewed as problematic | — |
| Global wealth strategy | began three years ago | three key flagship solutions now established with the soft launch of CPEP for PE, plus a new head of retirement solutions | — |
| Macro and market volatility | 2025 resilient with credit spreads near tights and equities at all-time highs | recent days showed market fragility and jitters, but proprietary portfolio data (January) still looks very good | — |
Q&A Summary
Alex Blostein of Goldman Sachs asked about the sustainability of monetization momentum into 2026 and how dependent Carlyle is on equity market exits versus M&A transactions given recent volatility.
Harvey Schwartz was reluctant to extrapolate a week's volatility, said proprietary January portfolio data looks very good on GDP growth, margins and EBITDA, and that while markets showed some fragility at record highs, the economic engine feels quite good.
Glenn Schorr of Evercore asked about perception versus reality in direct lending and credit and how it informs Carlyle's plans to grow credit, including in wealth, and requested apples-to-apples software exposure.
Harvey Schwartz said Carlyle built its credit business outside the line of fire in CLOs and ABS, has been systematically positioning for the direct lending opportunity to open up with a new head and new origination, and Justin Plouffe added the all-weather diversified credit business is well positioned; software is 6% of total AUM, below others.
Mike Brown of UBS asked which segment could see the most margin expansion in 2026 and which drives margin higher longer-term.
Harvey Schwartz deferred details to the February 26th update but noted the team drove margins up roughly 1,000 basis points over three years while investing in the business and growing headcount.
Bill Katz of TD Cowen asked about Fund 9 capital raising, realization pace and DPI, and capital priorities as the repurchase program concludes.
Harvey Schwartz deferred specifics to the February 26th update but emphasized the impressive diversification of client engagement and fundraising across institutional, wealth and geographies that drove the $54 billion of 2025 inflows.
Patrick Davitt of Autonomous Research asked about CLO software exposure and whether recent volatility could impact over-collateralization tests.
Justin Plouffe said CLO performance has been among the best in the industry, software exposure is right on top of the index (not over or underweight), and he does not expect recent volatility to affect the CLOs at all.
Mark Paolini (for Brennan Hawken) of BMO asked whether AlpInvest had negative catch-up fees this quarter.
Harvey Schwartz and Justin Plouffe said the catch-up fees were not negative; catch-up fees came earlier in the year, and stripping them out AlpInvest management fees were up 4% quarter-over-quarter.
Steven Chubak of Wolfe Research asked whether Carlyle can frame the revenue upside in transaction fees and where it may be under-earning.
Harvey Schwartz deferred to the February update but noted transaction fees were near zero three years ago, demonstrating platform agility, and there remain gaps where historical fund documents will let more fees come online, implying continued upside.
Brian McKenna of Citizens asked about the Carlyle story resonating in the wealth channel and opportunities to further enhance the brand.
Harvey Schwartz emphasized the firm's global iconic brand and long history, performance, diversification of solutions and close advisor engagement, citing initiatives like the Oracle Red Bull partnership and long-term upside in the retirement channel.
Ben Budish of Barclays asked about 2026 management fee growth expectations given flagships coming to market and realizations, and the CP7/CP8 realization-before-carry trajectory.
Harvey Schwartz deferred detail to the February 26th update but reiterated pride in the team's deliberate strategic decision to lead the industry in monetizations and IPO exits.
Ken Worthington of JPMorgan asked about the 2026 CLO outlook inside and outside the U.S., AI/software impact, and use of the CLO equity fund.
Harvey Schwartz framed AI as a broad atmospheric market factor, and Justin Plouffe said after two incredible years of issuance and resets the CLO business is more durable, 2026 started constructively with tight spreads, and the team will participate in any activity.
Michael Cyprys of Morgan Stanley asked about steps to enhance originations and expand the sourcing funnel in credit for 2026.
Justin Plouffe cited hires including Alex Chi from Goldman Sachs and Mike Mayer, an expanded origination team, and almost $30 billion of originations in 2025, describing a broad-based durable engine; Harvey Schwartz said the buildout is mostly done with more strategy detail at the February update.
More on Carlyle Group Inc.
Reported 2026-02-06 · figures from the Carlyle Group Inc. Q4 2025 earnings call.
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