The Carlyle Group Inc. · NASDAQ:CG
The Carlyle — Carlyle Tactical Private Credit Fund — Investor Presentation (May 2024)
40 slides from The Carlyle's investor presentation, May 2024
Slide 1: Carlyle Tactical Private Credit (“C•TAC”)
Carlyle Tactical Private Credit (“C•TAC”) May 2024 FOR ACCREDITED INVESTORS TRADE SECRET & STRICTLY CONFIDENTIAL TRADE SECRET & STRICTLY CONFIDENTIAL 1
Slide 2: Important Risk Disclosures
Important Risk Disclosures Investors should carefully consider the investment objective, risks, charges and expenses of the Fund before investing. This and other important information about the Fund is in the prospectus, which can be obtained by contacting your financial advisor or visiting www.Carl
Slide 3: Important Risk Disclosures (Cont.)
Important Risk Disclosures (Cont.) Valuations. For purposes of this Presentation, the valuation of our investments is determined in accordance with the terms of ASC 820, Fair Value Measurement. Generally, Carlyle values its investments at their market price if market quotations are readily available
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 $186B1 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 With businesses remaining private for longer & significant private equity dry powder, we believe there is a continued long-term need for private credit GROWTH EXPECTED IN PRIVATE CREDIT GROWING NUMBER OF PRIVATELY HELD COMPANIES 2 Private Equit
Slide 11: Historical Private Debt Premium
Historical Private Debt Premium On a risk-adjusted basis we continue to see significant yield premium as compared to traditional markets 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Direct Lending Yields Loan Yields Note: Past performance is not a guarantee or indicator of
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 Global $159 bn AUM 400+ investment professionals Private Equity Founded: 1987 AUM: $425 bn Global Credit $186 bn AUM3 200 investment professionals4 Employees: 2,200+ Investment Professionals: 700+2 Global Investment $80 bn AUM 90+ investment professionals Offices
Slide 14: Carlyle Global Credit Platform
Carlyle Global Credit Platform CARLYLE GLOBAL CREDIT – $186BN AUM1 LIQUID CREDIT PRIVATE CREDIT REAL ASSETS CREDIT AUM: $53.1 billion AUM: $25.8 billion AUM: $17.0 billion Carlyle managed CLOs Directly originated Commercial aircraft (broadly syndicated DIRECT loans, primarily first lien leasing / se
Slide 15: Experienced Credit Senior Leadership Team
Experienced Credit Senior Leadership Team Carlyle Global Credit 200 investment professionals1 Mark Jenkins, Head of Global Credit Justin Plouffe, Deputy CIO of Global Credit 34 years experience 23 years experience Liquid Credit Private Credit Real Assets Credit Platform Initiatives 45+ investment pr
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 Chairman, Asset Allocation Committee Head of Global Credit Leveraged Loans CLO In
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 17% Structured Credit Liquid Credit 31% 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% 2% 2% 2% 2% 2% 3% 3% 3% 3% 3% 4% 3% 3% 4% 4% 4% 4% 3% 3% 3% 3% 3% 3% 3% 4% 4% 4% 4% 4% 4% 3% 2% 4% 4% 4% 16% 15% 90% 19% 22% 19% 20% 18% 28
Slide 22: Key Portfolio Stats
Key Portfolio Stats 9.88% / 9.89% 6% 5% Annualized / LTM Distribution Rate (A)1 4% 2% 733 19% 86% Current Number of Investments Floating Rate 58% ~$4,110m 6% Total Assets under Management2 1st Lien Senior Secured 2nd Lien Senior Secured ~21% CLO Tranche Unsecured Preferred / Equity Senior Secured Bo
Slide 23: Key Portfolio Stats (cont.)
Key Portfolio Stats (cont.) TOP TEN INDUSTRIES1 (AS A % OF ASSETS) ANNUALIZED DISTRIBUTION RATE2 0.3 11.00% Software 10.06% 10.26% 10.24% Banking, Finance, 0.25 9.88% 10.00% Insurance & Real Estate 9.74% 10.02% 9.84% Health Care Providers & Services Professional Services 11% 0.2 9.00% 7% 8.24% Consu
Slide 24: Net Monthly Total Return
Net Monthly Total Return1 A Share TAKAX US Equity Class 7/31/18 Year Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec YTD Annualized Return as of 03/31/2024 2024 1.19% 0.82% 1.05% 3.07% 1-Year 13.43% 2023 2.97% 0.67% (0.21%) 1.22% 0.23% 1.31% 2.01% 1.18% 0.82% 0.00% 1.34% 1.62% 13.83% 3-Year 7.36% 2
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: Liquid Credit
Liquid Credit Liquid Credit - $53.2 Billion AUM Segment Overview Key Investment Highlights Carlyle’s Liquid Credit platform was launched in 1999 and primarily A LEADING PLAYER IN THE LIQUID CREDIT MARKET – ~$20 billion in invests in senior secured broadly syndicated loans (“BSL”), CLO yearly loa
Slide 28: Direct Lending
Direct Lending Direct Lending - $9.6 Billion AUM Segment Overview Key Investment Highlights Carlyle Direct Lending seeks to generate current sustainable DEEP CREDIT SELECTION EXPERTISE – Differentiated insights cash income on a through-cycle basis by primarily investing in supported by a rigorou
Slide 29: Opportunistic Credit and Special Situations
Opportunistic Credit and Special Situations Opportunistic Credit - $13.3 Billion AUM; Special Situations - $2.4 Billion AUM Segment Overview Key Investment Highlights Opportunistic Credit targets global opportunities with STRONG OPPORTUNITY SET – Global economic and geopolitical attractive asymm
Slide 30: Aviation Credit
Aviation Credit Carlyle Aviation Partners - $12.1 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 - $5.2 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 (~3-4 weeks prior to quarter end) − Repurchase deadline is two weeks after the last business day of the quarter − If
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 • An interval fund is a closed-end structure that conducts periodic repurchase offers for a portion of its outstanding shares. Given the limited liquidity, portfolio managers can invest interval fund capital into more illiquid assets than they could in more liquid vehic
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 Investing in the Fund involves risks, including the risk that a Shareholder may receive little or no return on their investment or that a Shareholder may lose part or all of their investment. Below is a summary of some of the principal risks of investing in the Fund. For a more complete
Slide 40: Risk Factors (Cont.)
Risk Factors (Cont.) The Fund may be materially adversely affected by market, economic and political conditions and natural and man-made disasters, including pandemics, wars and supply chain disruptions, globally and in the jurisdictions and sectors in which the Fund invests. Non-U.S. securities may
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