Market Outlook and Capital Raising
Q: How will recent market sentiment shifts affect capital raising for private equity?
A: Despite recent market volatility, management remains confident in their outlook for capital raising in private equity. Underlying portfolio performance is strong, and exits and pending announcements feel good. They believe the current market adjustment is liquidity-driven and risk sentiment-driven but does not change their view about the balance of the year.

Fundraising Targets and Real Estate Momentum
Q: Can you discuss progress towards the $40 billion fundraising target and contributions from real estate?
A: Management is confident about reaching the $40 billion fundraising target for the year, having raised $18 billion year-to-date and $41 billion in the last 12 months. They see continued momentum across the platform, particularly in their real estate funds, where they have raised a number that is "materially higher" than previously disclosed.

Outlook for CEP VI and CAP VI Fundraising
Q: What is the fundraising outlook for CEP VI and CAP VI, especially in Europe and Asia?
A: Management expects the current CAP VI fund to be smaller than its predecessor due to geopolitical headwinds in Asia. They have raised $5 billion in Asia and continue to see attractive opportunities there. While committed to their Asia business, they cannot provide specific numbers for CAP VI at this time.

Deployment Outlook and Impact of Risk-Off Sentiment
Q: How might a prolonged risk-off market impact your deployment outlook and pending fee-earning AUM?
A: While acknowledging that an extended down market could be less positive, management currently sees a tremendous transaction pipeline and feels good about deployment. They have nearly $20 billion of pending fee-earning AUM, the highest level since 2021, and expect fees to turn on over the coming quarters.

Capital Allocation and Strategic M&A
Q: How are you approaching capital allocation, including the pacing of the remaining $1.1 billion share repurchase and thoughts on strategic M&A?
A: Management is pleased with the share repurchase activity, having repurchased 330 million shares year-to-date. They intend to remain active buyers of the stock but are open to pivoting toward M&A if a strategically and financially compelling opportunity arises.

FRE Compensation Ratio
Q: Is the current FRE comp ratio a new baseline, or could it change later in the year?
A: The FRE compensation ratio is within their targeted range, currently at 35%, and they expect to operate within this range moving forward. They are focused on investing in the business for growth rather than solely targeting a specific ratio.

Insurance and Fortitude Initiatives
Q: Can you update us on the contribution from Fortitude and insurance-related initiatives?
A: The partnership with Fortitude is progressing well, exemplified by the Discover Financial Services transaction, which showcases collaboration across credit, capital markets, and insurance. They see significant opportunity in the sector, focusing on private investment grade and maintaining a capital-light model.

Merging of BDCs and Direct Lending Strategy
Q: What are the merits of merging your BDCs, and are there financial implications for Carlyle?
A: The merger of their public BDCs with a private BDC will provide more scale, making it easier to raise equity capital, which is financially attractive to the firm. There will be benefits to FRE from this merger, with more details to be provided as they approach the expected closing in Q1 2025.

Management Fees in Global Private Equity
Q: What is the outlook for management fees within Global Private Equity?
A: Management expects management fees in Global Private Equity to remain flattish. While they anticipate that their Europe and Asia buyout funds will be smaller than predecessors, they aim to mitigate this with growth in their real estate business and other parts of Global Private Equity.

Transaction Advisory Fees Outlook
Q: How do you expect transaction advisory fees to evolve in the second half and into 2025?
A: Transaction advisory fees have grown 60% over the last six months, benefiting from a more conducive transaction environment. Management expects this to be a record year for transaction and capital market fees, given the strong pipeline across the platform.

Progress in Retail Channel and PE Product
Q: Can you provide an update on your progress in the retail channel and plans for a retail-focused PE product?
A: Management has launched CAPM on multiple platforms and is seeing momentum in both CAPM and their credit product, CTAC. They plan to introduce a complementary private equity product in 2025, providing footholds across wealth for the coming years.

Stock-Based Compensation Outlook
Q: How should we model stock-based compensation over the next year?
A: Stock-based compensation expense will remain elevated in 2024 due to performance stock unit grants to key individuals. The accounting is front-end loaded, with expenses expected to start decreasing in 2025. The estimated step-down of about $25 million per quarter is directionally accurate.