What Management Said

Read the full Q3 2025 transcript ↗

Earlier this morning, we issued a press release and a detailed earnings presentation, which is available on our Investor Relations website. We have provided reconciliation of these measures to GAAP in our earnings release to the extent reasonably available. In order to ensure participation by all those on the line today, please limit yourself to one question and return to the queue for any additional follow-ups. We delivered another strong quarter of results as we continue to execute our strategic growth plan.

Organic inflows of $17 billion in the quarter and nearly $60 billion over the past 12 months, with significant capital coming from credit, secondaries, and global wealth. These insights provide one of the few real-time views into the economy: steady EBITDA growth, continued investment in technology and AI infrastructure, and resilient consumer demand. Now turning to our global private equity business, we've capitalized on our improving transaction environment, returning capital to our limited partners. Over the past year, we have returned $19 billion in capital to investors in global private equity, 150% of the industry average.

In Carlyle AlpInvest, the team continues to deliver exceptional growth, with FRE up more than 80% year-to-date. This underscores Carlyle's leadership and innovation within a rapidly expanding segment of the marketplace. During the quarter, inflows into our asset-backed finance strategy were almost $2 billion, highlighting the continued demand for private investment-grade assets. Justin will get into more details about Fortitude Re, but insurance remains a key driver of growth for Carlyle, and we continue to see momentum across the platform.

What went well
  • Carlyle delivered third-quarter FRE of $312 million, up 12% year-over-year, and $946 million year-to-date, up 16%.
  • Record AUM of $474 billion was up 7% year-to-date.
  • Organic inflows were $17 billion in the quarter (nearly double Q3 2024) and nearly $60 billion over the past 12 months, with significant capital from credit, secondaries and global wealth.
  • FRE margins remained strong at 48% for the quarter and year-to-date, exceeding last year's record of 46%.
  • Distributable earnings were $368 million ($0.96 per share), and year-to-date DE totaled $1.3 billion (just over $3 per share), up 10%.
  • Capital markets and transaction fees were $32 million, up almost 20% year-over-year and more than doubled over the past 12 months.
  • Carlyle AlpInvest raised $6.3 billion in the quarter (more than $15 billion year-to-date), reached AUM of $102 billion (up more than 20% year-to-date), and closed its largest-ever secondaries fund at $20 billion.
  • Global credit generated nearly $10 billion of inflows in the quarter and $31 billion over 12 months, lifting AUM to $208 billion, now 45% of firm-wide assets and growing at a 33% five-year CAGR.
  • Global wealth had its best fundraising quarter ever, raising $3 billion in evergreen inflows, roughly 10x the ~$300 million per quarter when Harvey Schwartz joined, bringing evergreen capital above $32 billion.
  • Carlyle returned $19 billion of capital to global private equity investors over the past year, 150% of the industry average, and announced the EUR 7.7 billion carve-out of BASF's coatings business.
  • The firm issued $800 million of 10-year notes at 5% and repurchased over $200 million of stock in the quarter.
What went wrong
  • Q3 was a lighter realizations quarter for global private equity, with a significant step up expected in Q4.
  • Private equity inflows were clearly lighter in the quarter, described as a quiet year for private equity fundraising with no real private equity funds in the market.
  • Credit fee rates looked a little light versus some expectations, skewed by certain insurance transactions where the fee rate can be wonky.
  • Public market volatility weighed on private equity performance, isolated largely to the CAP franchise and to StandardAero and Hexaware in CP7, which were down from the previous quarter.
  • Government data was delayed by the shutdown, and credit markets saw heightened focus, though Carlyle's data showed only idiosyncratic credit events and no broad deterioration.

Guidance Changes

MetricPeriodCurrent guidance
Full-year FRE growthfull year 2025approximately 10%, on track to exceed at least 10% growth
Full-year inflowsfull year 2025approximately $50 billion, at $45 billion year-to-date
RealizationsQ4 2025expect a significant step up, with ~$4 billion of signed deals mostly closing in Q4
Insurance solutions AUMintermediate terminitiatives expected to lead to more than $20 billion of new AUM
Share repurchasesQ4 2025expect a similar amount (~$200 million) in Q4, near end of $1.4 billion authorization

Performance Breakdown

MetricYoYNote
FRE (quarter) +12% organic top-line growth; total fee revenue up 11% in Q3 and 13% year-to-date
FRE (year-to-date) +16% $946 million year-to-date driven by broad-based platform momentum
Capital markets and transaction fees +20% increased activity; more than doubled over the past 12 months
Carlyle AlpInvest AUM +20% year-to-date institutional demand and strong momentum in global wealth products; FRE up more than 80% year-to-date
Global credit AUM grew at 33% five-year CAGR nearly $10 billion of quarterly inflows across asset-backed finance, CLOs and wealth
Global wealth evergreen inflows roughly 10x since new management best fundraising quarter ever at $3 billion, driven by CTAC, AlpInvest Solutions and the UBS partnership
Global private equity realizations (LTM) up 35% returned nearly $20 billion over 12 months, 150% of the industry average
Distributable earnings (year-to-date) +10% $1.3 billion year-to-date; Q3 DE of $368 million

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Realizations pipeline and monetizations$19 billion returned over the past year, 150% of industry averagelighter Q3 with a significant Q4 step up expected, ~$4 billion of signed deals pending close plus the Medline IPO filing—
Carlyle AlpInvest as a solutions businessshorthand as a secondaries businessa full suite of secondaries, co-invest, primary and portfolio finance/corporate finance solutions with strong secular tailwinds—
Insurance and Fortitude Re$87 billion insurance solutions platformclosed a $4 billion Unum reinsurance deal (fourth this year), issued a $500 million funding agreement note, and launched an Asia-focused sidecar—
Credit market healthrecent weeks of focus on creditown data shows no broad deterioration or systemic risk; credit events have been idiosyncratic—
CFO leadership transitionJohn Redett as CFO and Head of Corporate StrategyJustin Plouffe introduced as incoming CFO while John Redett moves to lead global private equity—
Asset-backed finance growth$10 billion platformraised $2 billion in the quarter, expanding beyond insurance into non-insurance counterparties, seen as one of the greatest credit growth areas—

Q&A Summary

Brian McKenna of Citizens asked about the outlook for inflows by business into year-end and 2026, including visibility into larger insurance transactions.
John Redett said Carlyle feels very good about inflows with tremendous momentum, $17 billion in Q3 (nearly double Q3 2024), $60 billion LTM and $45 billion year-to-date against ~$50 billion guidance, driven by diversification across credit and AlpInvest including the $20 billion secondaries close.
Alex Blostein of Goldman Sachs asked about the key top-of-the-house growth priorities for 2026 and what could be most needle-moving for management fee growth.
Harvey Schwartz said momentum has never felt better across solutions, wealth and credit, with high demand for capital, strong deployment, growth in asset-backed and insurance, and the three flagship wealth funds including CPEP coming to market in 2026.
Glenn Schorr of Evercore asked to peel back the realization pipeline timing, whether Q4 beats Q3, and what it means for the 2026 FRE story.
Harvey Schwartz and John Redett stressed a multi-quarter rather than quarter-to-quarter view, noted realizations are up 35% LTM and nearly $20 billion returned in global PE (150% of industry average), and said the ~$4 billion of signed deals (excluding Medline) will mostly close in Q4 with some spilling into Q1.
Bill Katz of TD Cowen asked about the typical MOIC on announced transactions and capital management priorities as the repurchase authorization nears its end.
John Redett said the firm is near the end of its $1.4 billion authorization (~$500 million year-to-date), expects similar Q4 repurchases, and prioritizes investing in businesses for growth first, then dividends and buybacks, still viewing the stock as inexpensive, with inorganic options possible.
Steven Chubak of Wolfe Research asked about confidence in driving FRE growth next year despite headwinds from elevated catch-up fees and the CPE7 fee-rate step-down.
Harvey Schwartz said the firm feels very good about momentum across capital markets, insurance, credit and wealth, expects a bigger pickup in private equity flows next year, and will give better guidance closer to the year.
Brennan Hawken of BMO asked whether lighter credit fee rates were due to timing or a lighter fee-rate mix.
Justin Plouffe said the fee rate may have been skewed by insurance transactions, but credit has broad-based momentum with fee revenues up 18% and FRE up 28% year-to-date across asset-backed, CLOs and wealth.
Dan Fannon of Jefferies asked about the diversity of the $3 billion of quarterly wealth flows and the product roadmap into 2026.
Harvey Schwartz said flows are up 10x since the new team arrived, with three flagship pillars (CTAC, AlpInvest Solutions and CPEP coming in 2026), a good mix, and a pickup from AlpInvest Solutions and the UBS partnership creating an exponential flywheel effect.
Ben Budish of Barclays asked about public investments weighing on PE performance and the historical realization mix of strategics versus sponsors versus IPOs.
John Redett said the quarter's volatility was largely isolated to the CAP franchise and to StandardAero and Hexaware in CP7 (which have since largely recovered), that CPE is up ~15% over 12 months with revenues up nearly double digits and EBITDA up 8%, and expressed zero long-term concerns.
Kenneth Worthington of JPMorgan asked what drove the outsized credit distributions in AUM and fee-paying AUM this quarter and whether it was Unum-related.
Justin Plouffe characterized it as normal course of business, including opportunistic realizations and CLO resets (41 resets have cut runoff from 40% to 12% of the platform), with nothing specific on the insurance side.
Patrick Davitt of Autonomous Research asked about the sustainability of the golden era in secondaries if the realization window keeps opening.
Harvey Schwartz said the Carlyle AlpInvest Solutions business is growing on a broad capability set beyond secondaries, driven by demand for liquidity tools and capital repositioning rather than distressed portfolios, with statistics suggesting secondary capital demand will grow for several years.
Michael Cyprys of Morgan Stanley asked about steps to expand the asset-backed finance platform and its contribution over the next 12 to 24 months.
Justin Plouffe said the $10 billion ABF platform started with Fortitude Re and has expanded via multiple origination partnerships, with growing non-insurance interest and vehicles under discussion, calling it one of the greatest growth areas in credit.

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Q3 2025 call
Reported 2025-10-31 · figures from the Carlyle Group Inc. Q3 2025 earnings call.

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