The Carlyle Group Inc.

The stable outlook on The Carlyle Group Inc. incorporates S&P Global Ratings' view that the company will operate with leverage of 2x-3x over the next 18-24 months while FPAUM growth and realizations remain modest. If Carlyle's FEAUM declines substantially, in contrast with our base-case forecast for 2020 and 2021; if the company experiences lagging investment performance; if liquidity is pressured; or if leverage rises closer to 2.5x over the next two years, we could lower the ratings. We view an upgrade in the next two years as unlikely. However, we could raise the ratings over the longer term if Carlyle maintains solid FEAUM and adjusted EBITDA growth along with solid investment performance across all of its four business segments, while

...Realization activity has slowed in 2020 for The Carlyle Group Inc., though we expect it to grow as the global economy recovers. Realizations have decreased across the sector due to lower deal activity amid the economic slowdown. We expect realizations to rebound gradually as the global economy recovers and deal activity picks up. Carlyle had $2 billion in net accrued performance revenue as of Sept. 30, 2020, representing notable potential earnings once realizations begin to increase. The company also ended third-quarter 2020 with $9.9 billion of capital not yet earning fees, as well as $74 billion of dry powder. We expect an increase in management fees in 2021 and beyond as capital is invested. Its diversified global investment platform with significant locked-up capital boosts Carlyle's resilience to the current downturn. As one of the most diversified alternative asset managers, Carlyle can spot and pursue opportunities across different strategies and geographies. Furthermore, a solid...

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