The Carlyle Group Inc. · NASDAQ:CG
The Carlyle — Q4 2020 Earnings Presentation
39 slides from The Carlyle's earnings presentation, Feb 4, 2021
Slide 1: Carlyle Reports Fourth Quarter and Full Year 2020 Financial Results
Carlyle Reports Fourth Quarter and Full Year 2020 Financial Results FEBRUARY 4, 2021
Slide 2: The Carlyle Group Reports Fourth Quarter and Full Year 2020 Financial Results
The Carlyle Group Reports Fourth Quarter and Full Year 2020 “2020 was a year of growth and positive change for Carlyle thanks Financial Results to the dedication, hard work and expertise of our people. We WASHINGTON, DC – FEBRUARY 4, 2021 – Global investment firm The Carlyle Group delivered strong r
Slide 3: Forward Looking Statement
Forward Looking Statement THIS PRESS RELEASE MAY CONTAIN FORWARD-LOOKING cause actual outcomes or results to differ materially from those statements within the meaning of Section 27A of the Securities indicated in these statements including, but not limited to, those Act of 1933 and Section 21E of t
Slide 4: Fourth Quarter and Full Year 2020 Financial Results
Fourth Quarter and Full Year 2020 Financial Results 4
Slide 5: Carlyle Fourth Quarter & Full Year 2020 U.S. GAAP Results
Carlyle Fourth Quarter & Full Year 2020 U.S. GAAP Results1 Net income attributable to The Carlyle Group Inc. common stockholders in Q4 2020 was $518.8 million, and $348.2 million in 2020 (Dollars in millions, except per share amounts) 4Q'19 4Q'20 FY'18 FY'19 FY'20 REVENUES Fund management fees $ 372
Slide 6: Carlyle Fourth Quarter and Full Year 2020 Highlights
Carlyle Fourth Quarter and Full Year 2020 Highlights • Distributable Earnings (“DE”) of $237 million for Q4 2020 on a pre-tax basis, or $0.64 per common share on a post-tax basis. FY 2020 DE of $762 million, or $2.05 per common share • Fee Related Earnings ("FRE") of $145 million for Q4 2020 and $52
Slide 7: Carlyle Fourth Quarter & Full Year 2020 Total Segment Operating Results
Carlyle Fourth Quarter & Full Year 2020 Total Segment Operating Results (Dollars in millions, except per share amounts) 4Q'19 4Q'20 FY'19 FY'20 SEGMENT REVENUES Fund management fees $ 390.2 $ 402.2 $ 1,570.9 $ 1,559.2 Transaction and portfolio advisory fees, net and other 17.5 26.7 53.5 56.9 Total s
Slide 8: Distributable Earnings
Distributable Earnings • Distributable Earnings were $237 million in Q4 2020 and $762 million for FY 2020 – Fee Related Earnings accounted for 61% of Distributable Earnings in the quarter and 68% for FY 2020 • Net Realized Performance Revenues were $87 million in Q4 2020 and $246 million for FY 2020
Slide 9: Fee Related Earnings
Fee Related Earnings • Fee Related Earnings were $145 million in Q4 2020, compared to $108 million in Q4 2019, driven by higher fee revenues and lower general & administrative expenses. FY 2020 Fee Related Earnings of $520 million increased 15% from $453 million in FY 2019, driven by lower general &
Slide 10: Performance Revenues
Performance Revenues • Net Accrued Performance Revenues1 were $2.3 billion as of Q4 2020, up 19% from the prior quarter and 36% from one year ago • Realized Net Performance Revenues were $87 million in Q4 2020 and $246 million for FY 2020 – Q4 2020 Net Realized Performance Revenues were primarily dr
Slide 11: Total Assets Under Management
Total Assets Under Management • Total Assets Under Management1 of $246 billion at December 31, 2020 increased 7% from the prior quarter and 10% from one year ago. The quarterly increase was attributable to significant fundraising in Investment Solutions and Global Credit, as well as market appreciat
Slide 12: Fair Value of Investments
Fair Value of Investments • Fair Value of Investments4 was $169 billion at December 31, 2020, up 9% from one year ago • Fair value in traditional carry funds of $95 billion was also up 9% from one year ago, with an in-carry ratio of 45% • The fair value of our public portfolio increased to 15% of th
Slide 13: Fee-earning Assets Under Management
Fee-earning Assets Under Management • Fee-earning Assets Under Management7 of $170 billion increased 6% compared to one year ago, driven by a 28% increase in Investment Solutions and an 11% increase in Global Credit • Pending Fee-earning AUM8 was $13.4 billion as of December 31, 2020, up from $9.9 b
Slide 14: Key Metrics Activity
Key Metrics Activity • Fundraising was $9.7 billion in Q4 2020, and $27.5 billion for FY 2020 • Invested Capital in carry funds was $8.7 billion in Q4 2020, and $18.3 billion for FY 2020 • Realized Proceeds from carry funds was $6.9 billion in Q4 2020, and $21.0 billion for FY 2020 FUNDRAISING INVES
Slide 15: Segment Highlights
Segment Highlights 15
Slide 16: Global Private Equity
Global Private Equity • Fee Related Earnings of $107 million in Q4 2020 were up from $94 million in Q4 2019, largely driven by Other lower general & administrative expense, partially offset by lower management fees. FY 2020 Fee Related Natural Resources Earnings of $383 million were down slightly fr
Slide 17: Global Credit
Global Credit • Fee Related Earnings of $35 million in Q4 2020 increased 150% from $14 million in Q4 2019, driven by Other higher management and transaction fees, as well as lower general & administrative expenses. Fee Real Related Earnings of $99 million for FY 2020 increased 108% compared to FY 20
Slide 18: Investment Solutions
Investment Solutions AlpInvest - • Fee Related Earnings of $3 million in Q4 2020 were up from $1 million in Q4 2019 driven by higher AlpInvest - Secondary management fees, and partially offset by higher compensation and general & administrative expenses. FY 2020 Fee Related Earnings of $37 million m
Slide 19: Supplemental Details
Supplemental Details 19
Slide 20: Carlyle Fourth Quarter and Full Year 2020 Total Segment Results
Carlyle Fourth Quarter and Full Year 2020 Total Segment Results (Dollars in millions, except per share amounts) 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 FY'19 FY'20 SEGMENT REVENUES Fund management fees $ 390.2 $ 381.5 $ 386.4 $ 389.1 $ 402.2 $ 1,570.9 $ 1,559.2 Transaction and portfolio advisory fees, net and
Slide 21: Total Segment Balance Sheet Highlights
Total Segment Balance Sheet Highlights • Balance sheet assets attributable to Carlyle Stockholders (including net cash and equivalents, net accrued performance revenue and investments) totaled $3.4 billion at December 31, 2020, compared to $2.4 billion one year prior • Balance sheet cash totaled $1.
Slide 22: AUM and Fee-earning AUM Roll Forward
AUM and Fee-earning AUM Roll Forward Total AUM Roll Forward (Unaudited) Three Months Ended December 31, 2020 Twelve Months Ended December 31, 2020 ($mm) Global Private Investment Global Private Investment Equity Global Credit Solutions5 Total Equity Global Credit Solutions5 Total Balance, Beginning
Slide 23: Global Private Equity Fund Performance
Global Private Equity Fund Performance REALIZED/PARTIALLY REALIZED TOTAL INVESTMENTS (Reported in Local Currency, mm) INVESTMENTS(5) As of December 31, 2020 As of December 31, 2020 Cumulative Remaining Net Accrued Committed Invested Percent Realized Fair MOIC Gross IRR Net IRR Carry/ Total Fair MOIC
Slide 24: Global Private Equity Fund Performance, continued
Global Private Equity Fund Performance, continued REALIZED/PARTIALLY REALIZED TOTAL INVESTMENTS (Reported in Local Currency, mm) INVESTMENTS(5) As of December 31, 2020 As of December 31, 2020 Cumulative Remaining Net Accrued Committed Invested Percent Realized Fair MOIC Gross IRR Net IRR Carry/ Tota
Slide 25: Global Credit Fund Performance (Carry Funds Only)
Global Credit Fund Performance (Carry Funds Only) TOTAL INVESTMENTS ($ mm) As of December 31, 2020 Cumulative Committed Invested Percent Realized Remaining Fair MOIC Gross IRR Net IRR Net Accrued Fund (Fee Initiation Date / Stepdown Date) Capital Capital(19) Invested Value(2) Value(3) (4) (6)(12) (7
Slide 26: Investment Solutions Fund Performance
Investment Solutions Fund Performance TOTAL INVESTMENTS (Reported in Local Currency, mm) As of December 31, 2020 Vintage Cumulative Invested Realized Value Remaining Total Fair Gross IRR Net IRR Net Accrued Carry/ INVESTMENT SOLUTIONS(22)(27) Year Fund Size Capital (1)(24) (24) Fair Value(24) Value(
Slide 27: Reconciliations & Disclosures
Reconciliations & Disclosures 27
Slide 28: Reconciliation for Distributable Earnings Per Share
Reconciliation for Distributable Earnings Per Share (Unaudited) (Dollars in millions, 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 FY'20 QoQ YoY Annual except per share data and where noted) FEE RELATED EARNINGS $ 108.0 $ 128.8 $ 127.3 $ 118.7 $ 144.9 $ 519.7 22% 34% 15% DISTRIBUTABLE EARNINGS $ 171.7 $ 175.0 $ 19
Slide 29: Reconciliation of GAAP to Total Segment Information
Reconciliation of GAAP to Total Segment Information (Dollars in millions) 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 FY'18 FY'19 FY'20 INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES $ (40.3) $ (789.0) $ 256.8 $ 415.1 $ 697.1 $ 360.2 $ 1,233.4 $ 580.0 Adjustments: Net unrealized performance revenues 69.7 528.9 (
Slide 30: Reconciliation of GAAP to Total Segment Information, continued
Reconciliation of GAAP to Total Segment Information, continued Total Reportable Consolidated Reconciling Carlyle Total Reportable Consolidated Reconciling Carlyle (Dollars in millions) Segments Funds Items Consolidated1 Segments Funds Items Consolidated1 Three Months Ended December 31, 2019 Year End
Slide 31: Reconciliation of GAAP to Total Segment Information, continued
Reconciliation of GAAP to Total Segment Information, continued Carlyle Reconciling Total Reportable Carlyle Reconciling Total (Dollars in millions) Consolidated Items 1 Segments Consolidated Items 1 Reportable Segments Three Months Ended December 31, 2019 Year Ended December 31, 2018 Performance rev
Slide 32: Reconciliation of GAAP to Total Segment Information, continued
Reconciliation of GAAP to Total Segment Information, continued (Dollars in millions) 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 FY'18 FY'19 FY'20 REVENUE RECONCILING ITEMS Unrealized performance revenues $ (113.9) $ (1,109.0) $ 1,037.1 $ 387.6 $ 715.3 $ (42.7) $ 267.8 $ 1,031.0 Unrealized principal investment in
Slide 33: Reconciliation for Total Segment Information, continued
Reconciliation for Total Segment Information, continued RECONCILIATION OF TOTAL INVESTMENTS RECONCILIATION OF ATTRIBUTABLE TO THE CARLYLE GROUP INC. ACCRUED PERFORMANCE ALLOCATIONS (Dollars in millions) 12/31/20 (Dollars in millions) 12/31/20 ACCRUED PERFORMANCE ALLOCATIONS, NET OF ACCRUED GIVEBACK
Slide 34: GAAP Statement of Operations
GAAP Statement of Operations (Unaudited) (Dollars in millions, except per share amounts) 4Q'19 1Q’20 2Q’20 3Q’20 4Q'20 FY'18 FY'19 FY'20 REVENUES Fund management fees $ 372.4 $ 355.9 $ 371.8 $ 363.8 $ 394.5 $ 1,272.0 $ 1,476.2 $ 1,486.0 Incentive fees 9.1 8.9 9.0 9.1 10.0 30.2 35.9 37.0 Investment i
Slide 35: GAAP Balance Sheet
GAAP Balance Sheet (Unaudited) As of December 31, 2020 Consolidated Consolidated (Dollars in millions) Operating Entities Funds Eliminations Consolidated ASSETS Cash and cash equivalents $ 987.6 $ — $ — $ 987.6 Cash and cash equivalents of Consolidated Funds — 148.6 — 148.6 Restricted cash 2.0 — — 2
Slide 36: Notes
Notes Dividend Policy 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 per share of common stock, equal to a quarterly dividend of $0.25 per share of common stock. The declaratio
Slide 37: Notes, continued
Notes, continued Notes on Assets Under Management (Pages 11-13) (continued) (6) Reflects the percentage of Fair Value in our traditional carry funds attributable to investments originated in Q4 2016 or prior. Investments that include follow-on tranches are fully recognized based on the date of the i
Slide 38: Notes, continued
Notes, continued Notes on Fund Performance Tables (Pages 23-26) (1) Represents the original cost of investments since inception of the fund. (2) Represents all realized proceeds since inception of the fund. (3) Represents remaining fair value, before management fees, expenses and carried interest, a
Slide 39: Notes, continued
Notes, continued Notes on Fund Performance Tables (Pages 23-26), continued (19) Represents the original cost of investments since the inception of the fund. For CSP II and CSP III, reflects amounts net of investment level recallable proceeds which is adjusted to reflect recyclability of invested cap