The Carlyle Group Inc. · NASDAQ:CG
The Carlyle — Carlyle Tactical Private Credit Fund (C•TAC) — Investor Presentation (March 2023)
41 slides from The Carlyle's investor presentation, March 2023
Slide 1: Carlyle Tactical Private Credit (“C•TAC”)
Carlyle Tactical Private Credit (“C•TAC”) March 2023 FOR ACCREDITED INVESTORS TRADE SECRET & STRICTLY CONFIDENTIAL TRADE SECRET & STRICTLY CONFIDENTIAL 1
Slide 2: Notice to Recipients
Notice to Recipients This presentation (“Presentation”) prepared by Carlyle Global Credit Investment Management L.L.C. (together with its affiliates, “Carlyle”), is provided for information purposes only and is not an offer to sell or solicitation of an offer to buy interests in any fund or investme
Slide 3: Notice to Recipients (Cont.)
Notice to Recipients (Cont.) Investors should consult with their financial advisor about the suitability of this fund in their portfolio. Important Risk Information. An investment in the Fund entails a high degree of risk and no assurance can be given that the Fund’s investment objective will be ach
Slide 4: Key Takeaways
Key Takeaways Private Credit is a multi-trillion-dollar market1 that seeks to offer a yield premium compared to the liquid market C•TAC leverages Carlyle’s global platform to invest dynamically across the entire universe of private credit Our fund structure aligns incentives and allows us to seek to
Slide 5: C•TAC Overview
C•TAC Overview The Carlyle Tactical Private Credit Fund seeks to produce current income and provide investors with access to the private credit markets. The Fund seeks to opportunistically allocate its assets across a wide range of credit strategies within The Carlyle Group’s $146B1 Global Credit Pl
Slide 6: Contents
Contents SECTION 01 Why Tactical Private Credit? SECTION 02 Carlyle Group Overview SECTION 03 Carlyle Tactical Private Credit Fund SECTION 04 Investment Strategy Snapshots SECTION 05 Appendix: Additional Information TRADE SECRET & STRICTLY CONFIDENTIAL 6
Slide 7: Why Tactical Private Credit?
SECTION 01 Why Tactical Private Credit? TRADE SECRET & STRICTLY CONFIDENTIAL TRADE SECRET & STRICTLY CONFIDENTIAL 7
Slide 8: What is Private Credit?
What is Private Credit? Private credit is investing in directly originated loans to businesses that cannot or do not want to access public markets for their capital needs Key Attributes Proprietary Deal Flow Complex Transactions Directly Originated Sponsored & Non-Sponsored Lending Special
Slide 9: Financing Markets Have Evolved
Financing Markets Have Evolved • Historically, private credit primarily financed mezzanine and preferred equity opportunities • Today, Private Credit is a meaningful financing provider up and down the capital structure • Bespoke structures across cap stack Senior Debt Senior Debt • BANK FINANCINGS P
Slide 10: Multi Trillion Dollar Opportunity Set in Private Credit
Multi Trillion Dollar Opportunity Set in Private Credit We see one of the strongest investment environments for Private Credit today MASSIVE GROWTH EXPECTED IN PRIVATE CREDIT OPPORTUNITY TO TAKE SHARE FROM PUBLIC MARKETS Private Equity Dry Powder1 ($BN) US and European New Issuance2 ($BN) $3,000 $1,
Slide 11: Historical Private Debt Premium
Historical Private Debt Premium 12.0% 10.0% ~4.0% 8.0% Average Private Debt Premium 6.0% 4.0% 2.0% 0.0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 1Q22 2Q22 3Q22 Loan Yields Direct Lending Yields Note: Past performance is not a guarantee or indicator of future results. Yield data as of September 3
Slide 12: Carlyle Group Overview
SECTION 02 Carlyle Group Overview TRADE SECRET & STRICTLY CONFIDENTIAL TRADE SECRET & STRICTLY CONFIDENTIAL 12
Slide 13: Carlyle Firm Overview
Carlyle Firm Overview1 Firm Overview Private Equity $163bn AUM 425+ investment professionals Founded: 1987 AUM: $373 bn Global Credit $146 bn AUM3 225+ investment professionals4 Employees: 2,150+ Investment Professionals: 750+2 Investment Solutions $63 bn AUM ~100 investment professionals Offices /
Slide 14: Carlyle Global Credit Platform
Carlyle Global Credit Platform CARLYLE GLOBAL CREDIT – $146BN AUM1 LIQUID CREDIT ILLIQUID CREDIT REAL ASSETS CREDIT AUM: $50.4 billion AUM: $22.7 billion AUM: $16.1 billion Carlyle managed CLOs Directly originated Commercial aircraft (broadly syndicated DIRECT loans, primarily first lien leasing / s
Slide 15: Experienced Credit Senior Leadership Team
Experienced Credit Senior Leadership Team Carlyle Global Credit 225+ investment professionals1 Mark Jenkins, Head of Global Credit Justin Plouffe, Deputy CIO of Global Credit Linda Pace, Vice Chair of Global Credit 33 years experience 22 years experience 38 years experience Liquid Credit Illiquid Cr
Slide 16: The Carlyle Edge: Potential Sources of Competitive Strengths
The Carlyle Edge: Potential Sources of Competitive Strengths 1. Breadth of Capabilities • Ability to deliver comprehensive and creative solutions to borrowers • Investing capabilities across the capital structure 7. Integrated Platform 2. Scale of Capital • Information sharing across businesses • Ca
Slide 17: Carlyle Tactical Private Credit Fund
SECTION 03 Carlyle Tactical Private Credit Fund TRADE SECRET & STRICTLY CONFIDENTIAL TRADE SECRET & STRICTLY CONFIDENTIAL 17
Slide 18: C•TAC Overview
C•TAC Overview • C•TAC seeks to produce income & provide high net C•TAC Portfolio Managers worth individuals (“HNWI”) access to the private credit markets by allocating capital across the credit spectrum • C•TAC will invest directly in deals originated by the Global Credit platform, and will tactica
Slide 19: Asset Allocation Across the Entire Credit Platform
Asset Allocation Across the Entire Credit Platform Top-Down Strategy Allocation Portfolio Allocation Advisory Committee Global Credit Investment Content (“PAAC”) Opportunistic Credit Direct Lending Mark Jenkins Linda Pace Chairman, Asset Allocation Committee Vice Chair of Global Credit Head of G
Slide 20: Portfolio Construction
Portfolio Construction Opportunistic Credit Direct Lending Current Allocations1 25–35% 30-40% Opportunities that arise due to market Loans and subordinated debt to dislocation or special situations sponsor backed middle market 4% companies 16% Structured Credit Liquid Credit 29% 15–20% 15–20% Debt a
Slide 21: Tactical Allocation
Tactical Allocation CTAC has been able to shift its portfolio based on where CGC is finding the best risk-adjusted returns <1% 1% <1% <1% <1% <1% <1% 100% 3% 2% 3% 2% 2% 2% 4% 4% 4% 2% 2% 2% 3% 3% 3% 3% 3% 4% 3% 3% 4% 4% 16% 15% 90% 19% 22% 19% 28% 27% 26% 22% 22% 20% 21% 22% 21% 21% 18% 22% 22% 24%
Slide 22: Key Portfolio Stats
Key Portfolio Stats 10.44% / 8.46% Annualized / LTM Distribution Rate (I)1 8% 6% 1% 517 15% 87% Current Number of Investments Floating Rate 60% 9% ~$2,234m 1st Lien Senior Secured 2nd Lien Senior Secured Total Assets under Management2 CLO Tranche Unsecured ~28% Preferred / Equity Corporate Bonds % L
Slide 23: Key Portfolio Stats (cont.)
Key Portfolio Stats (cont.) TOP TEN INDUSTRIES1 (AS A % OF ASSETS) ANNUALIZED DISTRIBUTION RATE2 Software $0.30 11.00% 10.44% Banking, Finance, Insurance & Real Estate $0.25 10.00% Health Care Providers & 10% Services 9% Consumer Services $0.20 8.53% 9.04% 8.51% 9.00% 8.74% 8.65% 8.65% 44% 6% 8.12%
Slide 24: Net Monthly Total Return By Share Class
Net Monthly Total Return By Share Class1 TAKIX US Equity I Share Class 8/31/18 Year Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec YTD 2022 0.47% (0.49%) 0.32% 0.26% (2.90%) (1.93%) 1.34% 1.87% (2.04%) 0.00% 1.71% 0.68% (0.79%) 2021 1.75% 1.37% 0.61% 1.11% 1.18% 0.95% 0.56% 0.67% 0.88% 0.49% 0.45%
Slide 25: Key Fund Terms
Key Fund Terms Structure The Fund is structured as a registered continuously-offered closed-end interval fund Subscriptions Daily / $10,000 minimum Repurchases1 The Fund will offer quarterly minimum 5% repurchases of the Fund NAV Distributions Quarterly Management Fee2 1.00% charged on managed asset
Slide 26: Investment Strategy Snapshots
SECTION 05 Investment Strategy Snapshots TRADE SECRET & STRICTLY CONFIDENTIAL TRADE SECRET & STRICTLY CONFIDENTIAL 26
Slide 27: Loans & Structured Credit
Loans & Structured Credit Loans & Structured Credit (“L&SC”) - $50.4 Billion AUM Segment Overview Key Investment Highlights Carlyle Loans & Structured Credit platform was launched in 1999 A LEADING PLAYER IN LOANS & STRUCTURED CREDIT MARKET – ~$27 and primarily invests in broadly syndicated seni
Slide 28: Direct Lending
Direct Lending Direct Lending - $9.4 Billion AUM Segment Overview Key Investment Highlights Carlyle Direct Lending seeks to generate current sustainable cash DEEP CREDIT SELECTION EXPERTISE – Differentiated insights supported income on a through-cycle basis by primarily investing in senior by a
Slide 29: Opportunistic Credit and Special Situations
Opportunistic Credit and Special Situations Opportunistic Credit - $10.2 Billion AUM; Special Situations - $2.5 Billion AUM Segment Overview Key Investment Highlights Opportunistic Credit targets global opportunities with attractive STRONG OPPORTUNITY SET – Global economic and geopolitical asymm
Slide 30: Aviation Credit
Aviation Credit Carlyle Aviation Partners - $11.5 Billion AUM1 Segment Overview Key Investment Highlights Carlyle Aviation Partners2 is a multi-strategy investment platform that HARD ASSET STRATEGY – Commercial aircraft are long-term assets is continuously expanding offerings for investors and a
Slide 31: Infrastructure Credit
Infrastructure Credit Carlyle Infrastructure Credit - $4.0 Billion AUM Segment Overview Key Investment Highlights Carlyle Infrastructure Credit strategy seeks to make investments SECULAR CHANGE POST-FINANCIAL CRISIS – Infrastructure projects across the capital structure, providing directly origi
Slide 32: Appendix: Additional Information
SECTION 06 Appendix: Additional Information TRADE SECRET & STRICTLY CONFIDENTIAL TRADE SECRET & STRICTLY CONFIDENTIAL 32
Slide 33: Subscriptions & Repurchases
Subscriptions & Repurchases • Daily Subscriptions • Daily Published NAV • Quarterly Repurchases (offer at least 5% of Fund shares) − Repurchase offer mailed to shareholders quarterly (~8 weeks prior to quarter end) − Repurchase deadline is 14 days before last business day of quarter − If more shares
Slide 34: Liquidity Management
Liquidity Management Layer New Capital & Reinvestment 1 Layer Liquidity Bucket 2 Layer Amortization of Loans 3 Layer Structured Credit 4 Layer Convert Loans to Cash 5 TRADE SECRET & STRICTLY CONFIDENTIAL 34
Slide 35: Strong Shareholder Alignment
Strong Shareholder Alignment Oversight Asset Allocation Independent Fund Board Investing alongside Carlyle’s flagship funds & Institutional Investors Carlyle Tactical Registered Fund Private Credit Seed Capital Registered with SEC Fund $100M total seed 1933 & 1940 Act capital $50M invest
Slide 36: Hypothetical Annual Incentive Fee
Hypothetical Annual Incentive Fee Net investment income (“NII”) is interest income, dividend income and any other income accrued, minus the Fund’s operating expenses 6.00% Income 7.06% Income 0% Income (Hurdle) (Catch-Up) Shareholder receives Shareholder 85.0% of NII is paid 100% of NII receives 0%
Slide 37: Interval Fund Characteristics
Interval Fund Characteristics Open-End Mutual Fund Interval Fund ("OEMF") (non listed CEF) Tender Fund Business Development Company 1940 Act Fund Yes Yes Yes Yes Fund Shares Continuously offered Continuously offered Continuously offered IPO for listed BDCs, continuous public or private offering for
Slide 38: Additional Disclosures
Additional Disclosures The mention of specific currencies, securities, issuers or sectors does not constitute a recommendation on behalf the Fund or Carlyle. Prior to November 4, 2019, the Fund’s name was the OFI Carlyle Private Credit Fund. At an in-person meeting of the Board held on September 23,
Slide 39: Risk Factors
Risk Factors Prospective investors should be aware that an investment in a Fund involves a high degree of risk, and is suitable only for those investors who have the financial sophistication and expertise to evaluate the merits and risks of an investment in a Fund and for which a Fund does not repre
Slide 40: Risk Factors
Risk Factors Highly Competitive Market for Investment Opportunities. The activity of identifying, completing and realizing attractive private equity investments is highly competitive and involves a high degree of uncertainty. The availability of investment opportunities generally will be subject to
Slide 41: Risk Factors
Risk Factors Capital Calls and Use of Subscription Lines and Asset-Backed Facilities. A Fund’s general partner may, and intends to, fund the making of investments with proceeds from drawdowns under one or more revolving credit facilities (the collateral for which can be, for example, one or more ass
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