Carlyle Group Inc. (CG) Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered record Fee Related Earnings ($311M), a 48% FRE margin, and record AUM ($453B), while GAAP diluted EPS was $0.35 and after‑tax DE per share was $1.14 .
• Versus S&P Global consensus, Carlyle posted a significant EPS beat (DE per share $1.14 vs. $0.95) but a revenue miss ($0.832B vs. $0.976B). Revenue shortfall reflects the exclusion of consolidated funds revenue in the S&P series; management highlighted strong transaction fees and segment momentum as offsets (values from S&P Global; see Estimates Context) .
• Management reiterated comfort with 2025 financial targets (including previously outlined ~6% FRE growth) and flagged a Q2 step‑up in GP management fees as CRP X fees activated on April 1 .
• Strategic execution remained a catalyst: record capital markets fees (~$150M over the last two quarters), robust insurance deal flow (Fortitude announces >$8B), and marquee exits/realizations (Hexaware IPO; StandardAero secondary; $1.4B power asset sale) .

What Went Well and What Went Wrong

What Went Well

• “Record fee‑related earnings of $311 million, record 48% FRE margin, and record AUM of $453 billion” underscored operating leverage and platform scale .
• Carlyle AlpInvest generated “record FRE… nearly double the first quarter last year”; AUM grew 12% YoY to $89B; strong inflows across secondaries, portfolio finance, co‑invest, and CAPM .
• Capital markets ramp: “Over just the past 6 months, we generated a record $150 million in fees,” building a multi‑year growth pathway while staying capital light .

What Went Wrong

• Reported revenue missed S&P consensus (actual $0.832B vs. $0.976B), in part due to S&P revenue excluding consolidated funds; GAAP total revenues were $0.973B. The mix highlighted the sensitivity to performance allocations and consolidated fund accounting .
• Asia Buyout carry reversals and an NGP restructure drove charges: $93M impairment in NGP Management and $38M reversal in NGP performance allocations, tempering investment income .
• GP management fees stepped down in certain funds, pressuring Global Private Equity fee revenues in Q1; activation of CRP X fees in Q2 should partially reverse the trend .

Financial Results

Segment performance (Q1 2025):

Key KPIs trajectory:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “First quarter performance was quite strong… record fee‑relating earnings of $311 million… record FRE margin, 48%… record assets under management of $453 billion.” — CEO Harvey Schwartz .
• “With $84 billion of dry powder… we are well positioned to be active… as opportunities emerge.” — CEO Harvey Schwartz .
• “We delivered record FRE, FRE margin and assets under management. DE of $455 million was a record start to the year… we remain comfortable with our ability to meet our 2025 financial targets.” — CFO & Head of Corporate Strategy John Redett .
• “Over just the past 6 months, we generated a record $150 million in [capital markets] fees… we’re not taking any capital risk here… staying capital‑light.” — CEO Harvey Schwartz .

Q&A Highlights

• Macro/tariffs: Management characterized tariff impacts as contained to a limited set of investments; second‑order effects being monitored; LPs are “cautiously opportunistic” despite headlines .
• Private Equity fundraising: CP IX timeline remains 4Q kickoff “give or take 3–6 months,” contingent on CP VIII deployment and environment; not embedded in 2025 targets .
• Insurance flows: Q1 inflows (~$14B) track toward ~$40B annual flow target; wealth channel fundraising up ~40%, evergreen AUM +70% YoY .
• Expense run‑rate: FRE margin expansion driven by growth investments; G&A run‑rate “~$95–$100M”; continued investment aligned with ~6% FRE growth target .
• AlpInvest: Fundraising likely wraps mid‑year; ASF already ~57% committed; strong long‑term growth path .
• Japan opportunity set: Deepening franchise across buyout, wealth, and insurance (sixth reinsurance transaction); expectation of larger future fundraises .
• Capital markets: ~$150M fees over last 6 months; multiyear trajectory tied to platform activity; capital‑light approach .
• Carry timing: CP VII likely to hit full carry “at some point over the next ~12 months,” subject to realizations pipeline .

Estimates Context

• Q1 2025 comparison to S&P Global consensus:
  • Primary EPS (DE per share): actual $1.14 vs. consensus $0.95 — beat.*
  • Revenue: actual $0.832B vs. consensus $0.976B — miss.*
• Note: S&P’s revenue series excludes consolidated funds revenue; GAAP total revenue was $0.973B. The delta aligns with consolidated fund adjustments noted in Carlyle’s reconciliation .
• Implications: EPS beats and record FRE/margins suggest upward bias to DE/EPS estimates; revenue modeling should align to ex‑consolidated definition to avoid artificial misses. Values retrieved from S&P Global.*

Key Takeaways for Investors

• Operating leverage intact: Record FRE ($311M) and 48% margin validate cost discipline and growth investments; expect Q2 fee step‑up from CRP X activation to support GP segment fees .
• Mix shift supports earnings quality: Capital‑light capital markets fees and scaling AlpInvest/Global Credit now contribute ~50% of firm‑wide FRE (vs. 34% in 2023), diversifying away from GP step‑downs .
• Realizations pipeline robust: Hexaware IPO, StandardAero secondary, and power asset sale underpin near‑term DPI and potential carry timing (CP VII within ~12 months) .
• Insurance and Japan are durable growth vectors: >$8B insurance transactions and expanding Japan franchise provide differentiated origination and fee durability .
• Estimates likely to drift higher for EPS/DE: Strong execution, segment momentum, and fee activation argue for positive revisions; ensure revenue frameworks exclude consolidated funds to properly track top‑line .
• Near‑term trading: EPS beat and record FRE/margins are supportive; revenue miss is definitional. Watch Q2 GP fee activation, capital markets activity pace, and any tariff‑related data points for sentiment drivers .
• Medium‑term thesis: Platform scale, capital‑light model, diversified fee streams (AlpInvest/credit/insurance), and realization cadence position Carlyle to compound fees and distributable earnings through cycles .

Notes:
- All numerical and qualitative claims are sourced from Carlyle’s Q1 2025 8‑K press release/exhibits and Q1 2025 earnings call, as cited inline. 
- Segment tables and KPIs reflect reported figures; revenue reconciliation highlights S&P Global’s ex‑consolidated methodology.

Citations:

• Q1 2025 8‑K and exhibits:
• Q1 2025 earnings call transcript:
• Q3 2024 8‑K:
• Q4 2024 8‑K:
• Other press releases (context):