CG Q1 2025 Record Fee Earnings $311M & AUM $453B
- Strong Financial Performance: The company delivered record fee‐related earnings of $311 million and record assets under management of $453 billion in Q1 2025, indicating robust operating leverage and profitability.
- Diversified Revenue Sources: With notable growth across key segments—such as almost doubling FRE in Carlyle AlpInvest and significant growth in Global Credit—its diversified business model supports sustainable long‐term revenue, reducing dependency on any one sector.
- Well-Positioned for Future Growth: The firm's large capital base, including $84 billion in dry powder, and its experience in navigating dynamic market conditions provide it with the flexibility to capitalize on emerging investment opportunities.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | 5% decline (from $1,023.0M to $973.1M) | Overall revenue declined largely due to the outsized impact of falling revenues in key segments – notably, sharp drops in Global Private Equity (down 58%) and Global Credit (down 62%), which more than offset the 12% increase seen in Global Investment Solutions. These declines suggest that while some segments built on improvements from previous periods, others experienced regression under current market or portfolio reallocation pressures. |
Global Private Equity revenue | 58% decline (from $715.7M to $297.5M) | Revenue from Global Private Equity dropped dramatically, possibly reflecting a reversal of gains from previous fiscal periods where performance allocations and realized performance revenues had been strong. The Q1 2025 performance indicates that factors such as lower management fees or altered fee structures, along with shifting deal dynamics, have hurt this segment compared to the robust performance recorded in FY 2024. |
Global Credit revenue | 62% decline (from $205.8M to $77.9M) | Global Credit revenue suffered a steep decline likely due to reduced transaction activity and lower portfolio advisory fees. This downward trend contrasts with a prior period marked by increased CLO closings and advisory fee growth, suggesting that changes in capital market conditions and possibly fewer new inflows have adversely impacted this segment in Q1 2025. |
Global Investment Solutions revenue | 12% increase (from $101.5M to $113.6M) | Revenue growth in Global Investment Solutions indicates resilience, driven by continued or improved management fees and fee-related performance revenues. This positive performance builds on earlier trends seen in FY 2024, where this segment benefitted from product activations such as ASF VIII/ACF IX and a boost in catch-up fees, suggesting a strong underlying business model even as other segments struggle. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Fee-Related Earnings (FRE) Growth | FY 2025 | Expected to increase by 6% compared to 2024 | no guidance provided | no current guidance |
FRE Margin | FY 2025 | Expected to remain at a similar level to that of 2024 | no guidance provided | no current guidance |
Inflows | FY 2025 | Expected to be similar to 2024 levels | no guidance provided | no current guidance |
Compensation Ratio | FY 2025 | Aiming for a compensation ratio of 35% or less | no guidance provided | no current guidance |
Management Fee Growth | FY 2025 | Strong growth expected in Solutions and Credit, with a modest decline in Corporate Private Equity | no guidance provided | no current guidance |
Realization Activity | FY 2025 | Expected to increase relative to 2024, but not assumed to be a substantial pickup in the 6% FRE growth forecast | no guidance provided | no current guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
FRE Growth and Margin Expansion | Q2 reported a record FRE of $273M, Q3 highlighted a record FRE of $278M with a 47% margin and Q4 noted near 30% annual FRE growth with a 46% margin ( ) | Q1 2025 achieved a record FRE of $311M with a record FRE margin of 48%, driven by strong performance in key segments ( ) | Continued positive momentum and incremental improvement in FRE levels and margins. |
Assets Under Management and Pending Fee-Earning Assets | Q2 showed record AUM of $435B with nearly $20B pending, Q3 reported AUM of $447B and pending fee‐earning AUM of $21B, and Q4 detailed Global Credit AUM and $23B pending fee‐earning AUM ( ) | Q1 2025 reported record AUM of $453B with new pending fee‐earning assets activated for the latest U.S. real estate fund ( ) | Slightly higher AUM and a robust, continuously growing fee‐earning pipeline. |
Global Private Equity Performance & Management Fee Trends | Q2 indicated flattish fees with mixed views, Q3 highlighted strong fund performance and operational gains, and Q4 noted robust fund performance despite a 7% decline in management fees, with expectations for fee recovery ( ) | Q1 2025 showcased strong U.S. buyout performance with modest quarterly appreciation, nearly $8B in proceeds to investors and expectations of fee increases in Q2 ( ) | Robust performance with a positive outlook as management fees are expected to recover. |
Global Credit Dynamics | Q2 detailed strong activity in credit strategies and record CLO activity ( ), Q3 emphasized robust CLO activity and asset‐backed finance opportunities without major headwinds ( ), and Q4 mentioned significant asset‐backed transactions while noting some CLO headwinds ( ) | Q1 2025 reported quarterly Global Credit FRE over $100M—a nearly 50% YoY increase—with strong European lending opportunities and no new CLO headwinds ( ) | Sustained robust growth with a continued emphasis on opportunities and a reduction in headwind concerns. |
Fundraising Momentum, Targets, and Execution | Q2 highlighted $18B raised YTD and a $40B target, Q3 reported $9B in new capital and consistent progress toward a ~$40B target, and Q4 described over $40B in inflows with strategic execution and a stable target ( ) | Q1 2025 saw fundraising up 40% YoY with $14B in Q1 inflows and a clear path toward the ~$40B target, supported by strong execution and increasing evergreen product inflows ( ) | Momentum remains strong with accelerating inflows and clear target execution. |
Liquidity Position & Dry Powder Availability | Q4 explicitly mentioned $84B in dry powder while Q2/Q3 had limited details on liquidity ( ) | Q1 2025 reaffirmed a strong liquidity position with $84B in dry powder and robust proceeds generation ( ) | Stable and consistently strong liquidity across periods. |
Transaction & Advisory Fee Growth | Q2 reported a 60% YoY increase in transaction fees, Q3 highlighted record capital markets fee growth with year-to-date fees 80% higher than last year, and Q4 achieved record transaction fees of $164M ( ) | Q1 2025 noted that transaction fees more than tripled over the same period last year, with $150M generated over two quarters driven by a capital‐light execution model ( ) | Continued robust fee growth with significant execution momentum. |
Operational Efficiency & Profitability Improvements | Q2 focused on record FRE and margin consistency with share repurchases, Q3 showcased record margins and cost-saving initiatives with strategic realignment, and Q4 emphasized margin expansion alongside operational overhauls ( ) | Q1 2025 delivered record FRE and FRE margin improvements (48%), underscoring strong operational efficiency, strategic cost management, and profitability ( ) | Ongoing and enhanced efficiency with continuous margin improvements and cost management. |
Global Wealth Expansion & Headcount Growth | Q2 mentioned strong momentum for wealth products (CTAC and CAPM), Q3 reported record $1.8B wealth inflows and a 70% year-over-year AUM increase, and Q4 noted record inflows of $4.5B with headcount growth expected to exceed 50% ( ) | Q1 2025 highlighted a prioritized Global Wealth initiative with evergreen inflows up 40%, a 70% increase in product inflows, and headcount in wealth growing by 100% over the past year ( ) | Accelerated expansion and significant headcount investment, marking an aggressive growth strategy. |
Retail Product Innovation & Launch Timing | Q2 described a focused retail innovation strategy with CAPM launched on multiple platforms and a complementary private equity product set for a 2025 launch ( ) | Q1 2025 provided no update on retail product innovation or launch timing | No current mention; the topic appears to have been de‐emphasized in Q1 2025. |
External Risks (Geopolitical Headwinds & Insurance Sector Competition) | Q2 noted geopolitical challenges affecting the Asia-focused CAP VI fund and increased competitive pressures in the insurance block, offset partially by the Fortitude partnership ( ); Q3/Q4 had little mention | Q1 2025 discussed geopolitical headwinds from trade policies affecting investor sentiment and highlighted strengths in the insurance sector through the Fortitude partnership ( ) | Ongoing external risk considerations with continued vigilance, balanced by strategic partnerships. |
Capital Markets Revenue Growth Potential | Q2 expressed optimism through a 60% YoY increase in transaction fees and a strong pipeline, Q3 showcased record results with an 80% increase and strong outlook, and Q4 focused on diversified revenue sources including asset-backed finance ( ) | Q1 2025 maintained focus with strategic initiatives that bolster capital markets revenue growth, driven by record transaction fee generation and a capital‐light model ( ) | Consistently optimistic with robust long-term growth potential and evolving revenue streams. |
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Private Equity Outlook
Q: How is the PE franchise evolving?
A: Management emphasized no major adjustments for CP IX timing, citing strong U.S. Buyout performance with 18% appreciation over the past year and robust capital returns, reinforcing a positive outlook for the private equity platform. -
Fundraising Flows
Q: Are Fortitude flows included in fundraising?
A: Management confirmed that the $40 billion inflow target includes Fortitude deals, noting $14 billion in the quarter and $50 billion on an LTM basis, reflecting solid, integrated fundraising. -
Trade Policy Impact
Q: How do tariffs affect investment activity?
A: Management described initial tariff shocks that quickly calmed with improved policy clarity, leading to cautious yet opportunistic capital deployment and constructive LP discussions. -
Expense Management
Q: Is the G&A run rate under control?
A: Management pointed to a strong 48% FRE margin in Q1 despite elevated expenses, expecting a stable G&A run rate around $95–100 million as investments drive margin growth. -
AlpInvest Growth
Q: What is the outlook for AlpInvest fundraising?
A: Management highlighted impressive organic growth and robust FRE margins, expecting future funds to surpass previous vintages as LP interest remains very strong. -
Endowment Risk
Q: Will endowment stress hurt private capital?
A: Management sees isolated pressures in the endowment sector but does not expect them to materially impact overall private market allocations or fundraising capabilities. -
Inorganic Strategy
Q: Will you pursue insurance acquisitions?
A: Management confirmed that while the focus is on organic growth, they remain open to accretive opportunities if strategically attractive, maintaining a capital-light approach. -
Japan Opportunities
Q: What opportunities exist in Japan?
A: Management stressed a long-standing, strong position in Japan with dynamic market prospects, leveraging deep expertise and a well-integrated platform for asset management and insurance. -
Capital Markets
Q: How are capital markets enhancing value?
A: Management explained that recent restructuring and active execution in capital markets are driving multiyear growth without adding balance sheet risk, thereby enhancing overall deployment. -
Real Estate Fund
Q: What is the update on CRP X sizing?
A: Management noted that CRP X has reached $7.5 billion in commitments and anticipates a step-up in GP management fees in Q2 with fee activation on the fund. -
Fund IX Timing
Q: When will Fund IX launch?
A: Management maintained a target of Q4 for launching Fund IX while emphasizing a focus on Fund VIII performance, with flexibility of about 3 to 6 months. -
Insurance & Wealth
Q: Do insurance deals count toward the flow target?
A: Management confirmed that insurance transactions, including a $4 billion close, and strong wealth product inflows—fundraising up by 40% and evergreen growth up 70%—are integrated into the overall flow target. -
Carry Trigger
Q: When will CP VII generate carry?
A: Management explained that while exact timing is uncertain, heavy realization activity in CP VII suggests that achieving cash carry is likely within the next 12 months given ongoing performance improvements.