The Carlyle Group Inc. · NASDAQ:CG
The Carlyle — Carlyle Group — Q3 2020 Earnings Presentation
40 slides from The Carlyle's earnings presentation, Oct 29, 2020
Slide 1: The Carlyle Group Reports Third Quarter 2020 Financial Results
THE CARLYLE GROUP REPORTS THIRD QUARTER 2020 FINANCIAL RESULTS OCTOBER 29, 2020 EXHIBIT 99.2
Slide 2: The Carlyle Group Reports Third Quarter 2020 Financial Results
R-8 G-51 R-0 B-94 G-74 08335E The Carlyle Group Reports Third Quarter B-13 6 R-9 R-11 G-102 2020 Financial Results 8 B-112 G-92 096670 B-15 WASHINGTON, DC – OCTOBER 29, 2020 – Global investment firm The Carlyle 0 R-23 R-88 G-234 Group Inc. (NASDAQ: CG) today reported its unaudited results for the th
Slide 3: Forward Looking Statements
R-8 G-51 R-0 B-94 G-74 08335E The Carlyle Group Reports FourthThird Quarter Quarter and B-13 6 R-9 R-11 G-102 2020Ful lFinancial Year 201 Results9 Financial Results 8 B-112 G-92 096670 B-15 Forward Looking Statements 0 R-23 R-88 G-234 This press release may contain forward-looking statements within
Slide 4: Third Quarter 2020 Earnings
R-0 R-8 G-74 G-51 B-13 B-94 6 R-9 R-11 G-10 8 2 G-92 B-11 B-15 R-232 0 4 R-88 G- G-15 234 9 B-23 B-16 R-20 4 5 8 R-13 G-23 6 2 G-18 B-24 0 R-977 R-14B-83 G-16 0 1 G-14 B-22 1 R-234 OldB-15 R-12 7 Color2 0 G-21 s G-16 7 9 B-15 R-14 B-22 7 Third Quarter 2020 Earnings R-16 7 2 G-19 3 5 G-14 B-19 3 7 B-
Slide 5: Carlyle Third Quarter 2020 U.S. GAAP Results
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Carlyle Third Quarter 2020 U.S. GAAP Results 8 B-112 G-92 096670 • Net income attributable to The Carlyle Group Inc. common stockholders in Q3 2020 was $295.5 million B-15 0 R-23 (Dollars in millions, except per share amounts) 3Q'19 3Q'20 YTD 3Q'19
Slide 6: Carlyle Third Quarter 2020 Highlights
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Carlyle Third Quarter 2020 Highlights 8 B-112 G-92 096670 B-15 0 R-23 R-88 G-234 G-15 B-234 • Distributable Earnings (“DE”) of $152 million for Q3 2020 on a pre-tax basis, or $0.40 per common 9 EAEAEA B-16 share on a post-tax basis. DE of $525 mill
Slide 7: Carlyle Third Quarter 2020 Total Segment Operating Results
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Carlyle Third Quarter 2020 Total Segment Operating Results 8 B-112 G-92 096670 (Dollars in millions, except per share amounts) 3Q'19 3Q'20 YTD 3Q'19 YTD 3Q'20 B-15 0 R-23 R-88 SEGMENT REVENUES G-234 G-15 B-234 Fund management fees $ 384.6 $ 389.1 $
Slide 8: Distributable Earnings
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Distributable Earnings 8 B-112 G-92 096670 B-15 0 R-23 • Distributable Earnings were $152 million in Q3 2020 and $525 million YTD R-88 G-234 G-15 B-234 – Fee Related Earnings accounted for 78% of Distributable Earnings in the quarter and 71% for th
Slide 9: Fee Related Earnings
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Fee Related Earnings 8 B-112 G-92 096670 • Fee Related Earnings were $119 million in Q3 2020, up from $109 million in Q3 2019, with the increase driven by lower general & B-15 0 R-23 administrative expenses, partially offset by higher cash compensa
Slide 10: Performance Revenues
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Performance Revenues 8 B-112 G-92 096670 1 B-15 • Total Segment Net Accrued Performance Revenues were $2.0 billion as of Q3 2020, up 10% from $1.8 billion last quarter, 0 R-23 R-88 G-234 due largely to strong appreciation in our sixth U.S. Buyout f
Slide 11: Total Assets Under Management
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Total Assets Under Management 8 B-112 G-92 096670 B-15 1 0 R-23 • Total Assets Under Management of $230 billion at September 30, 2020 increased 4% from the prior R-88 G-234 G-15 B-234 quarter and increased 2% YTD 9 EAEAEA 2 B-16 • Available Capital
Slide 12: Fair Value of Investments
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Fair Value of Investments 8 B-112 G-92 096670 • Fair Value of Investments4 of $156 billion at September 30, 2020 increased 5% from $148 billion in the prior quarter, and is up 1% B-15 0 R-23 YTD R-88 G-234 G-15 B-234 • Fair value in traditional car
Slide 13: Fee-earning Assets Under Management
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Fee-earning Assets Under Management 8 B-112 G-92 096670 • Fee-earning Assets Under Management7 of $167 billion increased 3% from the prior quarter and 3% YTD, with growth in B-15 0 R-23 Global Credit (12% YTD) and Investment Solutions (23% YTD) par
Slide 14: Key Metrics Activity
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Key Metrics Activity 8 B-112 G-92 096670 B-15 • Fundraising was $5.5 billion in Q3 2020 driven by activity in Investment Solutions and Global Credit, and $17.8 billion 0 R-23 R-88 G-234 YTD G-15 B-234 9 EAEAEA • Invested Capital in carry funds was
Slide 15: Segment Highlights
R-0 R-8 G-74 G-51 B-13 B-94 6 R-9 R-11 G-10 8 2 G-92 B-11 B-15 R-232 0 4 R-88 G- G-15 234 9 B-23 B-16 R-20 4 5 8 R-13 G-23 6 2 G-18 B-24 0 R-977 R-14B-83 G-16 0 1 G-14 B-22 1 R-234 OldB-15 R-12 7 Color2 0 G-21 s G-16 7 9 B-15 R-14 B-22 7 Segment Highlights R-16 7 2 G-19 3 5 G-14 B-19 3 7 B-18 R-147
Slide 16: Corporate Private Equity
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Corporate Private Equity 8 B-112 G-92 096670 • Fee Related Earnings of $61 million in Q3 2020 were down from $68 million in Q3 2019, B-15 0 R-23 primarily driven by lower management and transaction fees, and partially offset by lower Other R-88 G-2
Slide 17: Real Assets
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Real Assets 8 B-112 G-92 096670 • Fee Related Earnings of $23 million in Q3 2020 were down from $26 million in Q3 2019 primarily driven by B-15 lower management fees, and partially offset by lower general & administrative and cash-based 0 R-23 R-88
Slide 18: Global Credit
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Global Credit 8 B-112 G-92 096670 • Fee Related Earnings of $22 million in Q3 2020 nearly doubled from $11 million in Q3 2019, driven by higher Direct B-15 Other management fees and lower general & administrative expenses. Management fees of $86 mi
Slide 19: Investment Solutions
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Investment Solutions 8 B-112 G-92 096670 • Fee Related Earnings of $14 million in Q3 2020 were up from $4 million in Q3 2019 primarily driven by B-15 AlpInvest - activating management fees on AlpInvest's latest secondaries program. Fee Related Earn
Slide 20: Supplemental Details
R-0 R-8 G-74 G-51 B-13 B-94 6 R-9 R-11 G-10 8 2 G-92 B-11 B-15 R-232 0 4 R-88 G- G-15 234 9 B-23 B-16 R-20 4 5 8 R-13 G-23 6 2 G-18 B-24 0 R-977 R-14B-83 G-16 0 1 G-14 B-22 1 R-234 OldB-15 R-12 7 Color2 0 G-21 s G-16 7 9 B-15 R-14 B-22 7 Supplemental Details R-16 7 2 G-19 3 5 G-14 B-19 3 7 B-18 R-14
Slide 21: Carlyle Third Quarter 2020 Total Segment Results
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Carlyle Third Quarter 2020 Total Segment Results 8 B-112 G-92 096670 B-15 0 R-23 (Dollars in millions, except per share amounts) 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 YTD 3Q'19 YTD 3Q'20 R-88 G-234 SEGMENT REVENUES G-15 B-234 9 Fund management fees $ 384.6
Slide 22: Total Segment Balance Sheet Highlights
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Total Segment Balance Sheet Highlights 8 B-112 G-92 096670 B-15 0 R-23 • Balance sheet assets attributable to Carlyle stockholders (including net cash and equivalents, net R-88 G-234 accrued performance revenue and investments) totaled $2.8 billion
Slide 23: AUM and Fee-earning AUM Roll Forward
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 AUM and Fee-earning AUM Roll Forward 8 B-112 G-92 096670 B-15 0 R-23 Total AUM Roll Forward (Unaudited) R-88 G-234 G-15 B-234 9 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 EAEAEA ($mm) B-16 5 R-208 Corporate Corporate
Slide 24: Corporate Private Equity Fund Performance
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Corporate Private Equity Fund Performance 8 B-112 G-92 096670 B-15 0 TOTAL INVESTMENTS REALIZED/PARTIALLY REALIZED INVESTMENTS(7) R-23 (Reported in Local Currency, mm) R-88 G-234 As of September 30, 2020 As of September 30, 2020 G-15 B-234 Investme
Slide 25: Real Assets Fund Performance
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Real Assets Fund Performance 8 B-112 G-92 096670 B-15 TOTAL INVESTMENTS REALIZED/PARTIALLY REALIZED INVESTMENTS(7) 0 R-23 (Reported in Local Currency, mm) R-88 As of September 30, 2020 As of September 30, 2020 G-234 G-15 Investment In Accrued LTM B
Slide 26: Global Credit Fund Performance (Carry Funds Only)
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Global Credit Fund Performance (Carry Funds Only) 8 B-112 G-92 096670 B-15 TOTAL INVESTMENTS 0 R-23 ($mm) As of September 30, 2020 R-88 G-234 Investment G-15 B-234 Period End/ Cumulative LTM Realized 9 EAEAEA Fund Fee Committed Invested Realized Re
Slide 27: Investment Solutions Fund Performance
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Investment Solutions Fund Performance 8 B-112 G-92 096670 B-15 TOTAL INVESTMENTS (Reported in Local Currency, mm) 0 R-23 As of September 30, 2020 R-88 Cumulative Invested Realized Remaining Fair Total Fair G-234 INVESTMENT SOLUTIONS(27) Fund Vintag
Slide 28: Reconciliations & Disclosures
R-0 R-8 G-74 G-51 B-13 B-94 6 R-9 R-11 G-10 8 2 G-92 B-11 B-15 R-232 0 4 R-88 G- G-15 234 9 B-23 B-16 R-20 4 5 8 R-13 G-23 6 2 G-18 B-24 0 R-977 R-14B-83 G-16 0 1 G-14 B-22 1 R-234 OldB-15 R-12 7 Color2 0 G-21 s G-16 7 9 B-15 R-14 B-22 7 Reconciliations & Disclosures R-16 7 2 G-19 3 5 G-14 B-19 3 7
Slide 29: Reconciliation for Distributable Earnings Per Share
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Reconciliation for Distributable Earnings Per Share (Unaudited) 8 B-112 G-92 096670 B-15 (Dollars in millions, 0 R-23 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 YTD 3Q'20 LTM 3Q'20 QoQ YoY LTM except per share data and where noted) R-88 G-234 G-15 B-234 FEE REL
Slide 30: Reconciliation of GAAP to Total Segment Information
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Reconciliation of GAAP to Total Segment Information 8 B-112 G-92 096670 B-15 0 R-23 (Dollars in millions) 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 YTD 3Q'19 YTD 3Q'20 FY'18 FY'19 LTM 3Q'20 R-88 G-234 G-15 B-234 INCOME (LOSS) BEFORE PROVISION FOR 9 INCOME TAXE
Slide 31: Reconciliation of GAAP to Total Segment Information, continued
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Reconciliation of GAAP to Total Segment Information, continued 8 B-112 G-92 096670 Total Reportable Consolidated Reconciling Carlyle Total Reportable Consolidated Reconciling Carlyle B-15 (Dollars in millions) Segments Funds Items Consolidated1 Seg
Slide 32: Reconciliation of GAAP to Total Segment Information, continued
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Reconciliation of GAAP to Total Segment Information, continued 8 B-112 G-92 096670 B-15 Carlyle Reconciling Total Reportable Carlyle Reconciling Total Reportable 1 1 0 R-23 (Dollars in millions) Consolidated Items Segments Consolidated Items Segmen
Slide 33: Reconciliation of GAAP to Total Segment Information, continued
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Reconciliation of GAAP to Total Segment Information, continued 8 B-112 G-92 096670 (Dollars in millions) 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 YTD 3Q'19 YTD 3Q'20 FY'18 FY'19 LTM 3Q'20 B-15 0 R-23 REVENUE RECONCILING ITEMS R-88 G-234 G-15 B-234 Unrealized
Slide 34: Reconciliation for Total Segment Information, continued
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Reconciliation for Total Segment Information, continued 8 B-112 G-92 096670 B-15 0 R-23 R-88 G-234 RECONCILIATION OF TOTAL INVESTMENTS RECONCILIATION OF G-15 B-234 ATTRIBUTABLE TO THE CARLYLE GROUP INC. ACCRUED PERFORMANCE ALLOCATIONS 9 EAEAEA B-16
Slide 35: GAAP Statement of Operations (Unaudited)
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 GAAP Statement of Operations (Unaudited) 8 B-112 G-92 096670 B-15 (Dollars in millions, except per share amounts) 3Q'19 3Q'20 YTD 3Q'19 YTD 3Q'20 0 R-23 R-88 G-234 REVENUES G-15 B-234 Fund management fees $ 359.5 $ 363.8 $ 1,103.8 $ 1,091.5 9 EAEAE
Slide 36: GAAP Balance Sheet (Unaudited)
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 GAAP Balance Sheet (Unaudited) 8 B-112 G-92 096670 B-15 0 R-23 R-88 G-234 As of September 30, 2020 G-15 B-234 Consolidated Consolidated 9 EAEAEA (Dollars in millions) Operating Entities Funds Eliminations Consolidated B-16 5 R-208 ASSETS R-13 G-232
Slide 37: Notes
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Notes 8 B-112 G-92 096670 Dividend Policy B-15 Under our dividend policy for our common stock that we adopted in connection with the Conversion, we expect to pay our common stockholders an annualized dividend of $1.00 0 R-23 per share of common sto
Slide 38: Notes, continued
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Notes, continued 8 B-112 G-92 096670 B-15 Notes on Assets Under Management (Pages 11-13) (continued) 0 R-23 (7) Fee-earning Assets Under Management refers to the assets we manage or advise from which we derive recurring fund management fees, and is
Slide 39: Notes, continued
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Notes, continued 8 B-112 G-92 096670 Notes on Fund Performance Tables (Pages 24-27) B-15 0 R-23 (1) The data presented herein that provides “inception to date” performance results of our segments relates to the period following the formation of the
Slide 40: Notes, continued
R-8 G-51 R-0 B-94 G-74 08335E B-13 6 R-9 R-11 G-102 Notes, continued 8 B-112 G-92 096670 B-15 Notes on Fund Performance Tables (Pages 24-27), continued 0 R-23 (22) Aggregate includes the following funds, as well as related co-investments, separately managed accounts (SMAs), and certain other stand-a