Carlyle Group Inc at Morgan Stanley Financials Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Cyprys - Morgan Stanley - Analyst : All right, look forward to that. (Laughter) So let's set the scene with the macro backdrop through the lens of your portfolio companies globally. What are you seeing just in terms of the state of the economy, health of the consumer, path of inflation, just given a lot of the uncertainty and volatility out there is out there, and how is your portfolio holding up through this?

Question: Michael Cyprys - Morgan Stanley - Analyst : So that's quite encouraging. So maybe with that backdrop, and over 80 billion of dry powder that you have today, just, maybe we could talk a little bit about how you're thinking about deploying capital here, where you're seeing some of the most interesting opportunities to put capital work and what's changed now versus a year ago as you're sort of putting that capital to work as you think about that, any areas you're avoiding?

Question: Michael Cyprys - Morgan Stanley - Analyst : And turning to the exit activity, how much of the portfolio would you say is exit ready today? Has this changed at all just given some of the recent market volatility uncertainty and how do you see the backdrop for realizations as you look out over the next 12 months? You need to see IPOs come back in order for this to pick up? That would be helpful.

Question: Michael Cyprys - Morgan Stanley - Analyst : I have seen a number of deals though over the past couple, mainly crypto. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 11, 2025 / 3:25PM, CG.OQ - Carlyle Group Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Maybe shifting gears to fundraising. You've laid out plans to target 40 billion of flows for this year, including from fortitude. It's a similar level to last year, which was nearly $41 billion which was, I think the third best year that you have have ever raised. So I guess what gives you confidence in your ability to achieve a similar level of success this year just given this backdrop we were talking about with the DPI challenges for the industry, although be you guys may be doing a little bit better, what does the progress look like so far on the fundraising front?

Question: Michael Cyprys - Morgan Stanley - Analyst : How are you thinking about the sizing of that US bio fund?

Question: Michael Cyprys - Morgan Stanley - Analyst : Do you think it could grow?

Question: Michael Cyprys - Morgan Stanley - Analyst : Staying with the fundraising side, maybe just on the institutional side, but we are hearing about some pressures across the institutional LP community whether it's from China LPs to large endowments and just overall distributions weighing on LP. So what to what extent do you see this impacting fundraising and more broadly anything about the the growth outlook across the institutional community some would suggest that they're largely full up on allocations. So where do you see some of the biggest opportunities on the institutional side?

Question: Michael Cyprys - Morgan Stanley - Analyst : And where would you say you see some of the biggest growth opportunities across the institutional community? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 11, 2025 / 3:25PM, CG.OQ - Carlyle Group Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : What about in the US? Some would say that the US is over there skis a little bit some would say.

Question: Michael Cyprys - Morgan Stanley - Analyst : And you mentioned just in terms of your your travels, Harvey's travels around the world, not hearing about investors overseas looking to necessarily reduce allocations to the US. What are you hearing just in terms of demand for non-US exposures for which you have a leading Japanese platform and franchise there, I guess, what are you seeing around the globe in terms of appetite for non-US assets, and is there an opportunity for you guys to lean into that a bit more aggressively?

Question: Michael Cyprys - Morgan Stanley - Analyst : Why don't we shift gears and talk about the private wealth channel, major focus for the industry, significant opportunity. You have a number of products in the market from [CTA to CAPM]. Can you talk about the traction that you're seeing, the steps you're taking to broaden out distribution, and maybe touch upon how flows have fared through the volatility in April and into May.

Question: Michael Cyprys - Morgan Stanley - Analyst : Maybe just digging in on the private equity product that you mentioned is coming in the fourth quarter of this year. Maybe you could speak to what this product's going to look like, how it's going to differ from say capM, that you've introduced, and what role can it play in client portfolios relative to a client buying capM.

Question: Michael Cyprys - Morgan Stanley - Analyst : It is that liquidity sleeve a stake in capM or is it a stake in sort of similar types of investments?

Question: Michael Cyprys - Morgan Stanley - Analyst : Got it. Okay. And maybe just you could speak to broadly how you see your presence in the wealth channel evolving over the next couple of years whether it's from distribution standpoint sounds like maybe not that many new incremental products beyond the three, but if you look at like what other types of strategies could make sense given the platform that you that you have.

Question: Michael Cyprys - Morgan Stanley - Analyst : And you mentioned partnerships, one of the things we're seeing is alternative managers partnering with traditional money managers on the product side. Just curious your thoughts around hybrid public private solutions. How are you thinking about that and to what extent could we see some of that?

Question: Michael Cyprys - Morgan Stanley - Analyst : Got it. So we'll stay tuned on that. Why don't we shift and talk about margins, fee related earnings margins. You guys have made significant progress in recent years. You achieved 46% of free margin in 2024 and know that you expect this year's margin to be similar with about 6% or so fee related earnings growth. Can you talk about some of the underlying contributors to get there between whether it's fund raising, fee activations of expense growth, and where might there be any sort of scope for upside? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 11, 2025 / 3:25PM, CG.OQ - Carlyle Group Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Why don't we shift and talk about private credit. We saw fee related earnings in your global credit business grow by 50% year-on-year surpassing $100 million for the first time. So significant growth there, I guess. How do you see the pace of growth in your credit platform projecting going forward? Look out the next three to five years and where do you see some of the incremental opportunities to further expand the platform and the capabilities?

Question: Michael Cyprys - Morgan Stanley - Analyst : Why don't we double click on the EDF platform? Can you talk about how it's contributing today, how you see it scaling as you look at over the next couple of years, and where might there be opportunities for expanded origination?

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. We have just a few minutes left. I did want to get a question in on AI. Advances in technology, data reshaping many sectors. So I was hoping you could talk about how you see AI impacting the asset management industry, how you're experimenting with that today, what use cases you've identified, and how many you might put into production over the next 12, 24 months.

Question: Michael Cyprys - Morgan Stanley - Analyst : On the diligence process, what's the timing you think for something like that coming across to your team?

Question: Michael Cyprys - Morgan Stanley - Analyst : So maybe sometime this year.

Question: Michael Cyprys - Morgan Stanley - Analyst : How do you think about the impact of what that is? Does it increase the velocity of capital from a deployment standpoint because you're making decisions more quickly? How do you think? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 11, 2025 / 3:25PM, CG.OQ - Carlyle Group Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : And when you think about the magnitude of efficiency saves you were mentioning the back office, just, how might you sort of quantify it?

Question: Michael Cyprys - Morgan Stanley - Analyst : Great, why don't we leave it there. Thank you very much.