The Carlyle Group Inc. · NASDAQ:CG
The Carlyle — Investor Presentation (June 2015)
38 slides from The Carlyle's investor presentation, Jun 8, 2015
Slide 1: The Carlyle Group Investor Presentation
The Carlyle Group Investor Presentation June 2015
Slide 2: Important Information
Important Information This presentation has been prepared by The Carlyle Group L.P. (together with its affiliates, “Carlyle”) and may only be used for informational purposes only. This presentation may not be referenced, quoted or linked by website, in whole or in part except as agreed to in writing
Slide 3: Carlyle is a Leading Global Alternative Asset Manager
Carlyle is a Leading Global Alternative Asset Manager… Corporate Real Private Equity Assets Real Estate ◦ Global Energy ◦ Power Buyout ◦ Growth Infrastructure $64.0 bn AUM • $39.4 bn FEAUM • $836 mm DE (LTM) $42.9 bn AUM • $27.6 bn FEAUM • $64 mm1 DE (LTM) Global Market Investment Strategies Solutio
Slide 4: Poised For Continued Strength in Financial Performance
…Poised For Continued Strength in Financial Performance $1.0 billion in Distributable Earnings and Economic Net Income over the last 12-months 1 Leading carry fund Investment Performance : 23% Corporate Private Equity, 27% Real Estate, and 20% Global Market Strategies on an LTM basis $1.8 billion in
Slide 5: Carlyle's Investment Performance Remains Strong
Carlyle’s Investment Performance Remains Strong Annual Fund Returns Q1 2012 2013 2014 2015 Overall Carry Fund 1 Appreciation 14% 20% 15% 6% Corporate Corporate Private Equity 16% 30% 23% 8% Private Equity Buyout 17% 30% 23% 9% Carry Funds Growth 12% 32% 25% 3% Real Assets 9% 1% (2%) 2% Real Assets R
Slide 6: Strong Fundraising and Investment Capabilities Drives Improving Fee Related Earnings
Strong Fundraising and Investment Capabilities Drives Improving Fee Related Earnings and Net Realized Performance Fees Fundraising Invested Capital $30 ($ billion) ($ billion) $24.2 $12 $22.0 $22.7 $23.2 $9.8 $10.1 $25 $10 $20 $8.2 $8 $6.8 $15 $6 $10 $4 $5 $0 $2 2013 2014 Prior LTM $0 LTM 2013 2014
Slide 7: Delivering Robust Cash Earnings and Value For Our Unitholders
Delivering Robust Cash Earnings and Value For Our Unitholders Post-Tax Distributable Distribution Per Earnings Per Unit Common Unit $3.00 $2.951 $3.00 $2.78 $2.50 $2.55 $2.50 $2.50 $2.26 $2.09 $2.00 $2.00 $1.88 $1.88 $1.50 $1.50 $2.70 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 2013 2014 Prior LTM 2013 2014
Slide 8: Deep Bench of Talented Leadership and Investing Professionals
Deep Bench of Talented Leadership and Investing Professionals Daniel D’Aniello Bill Conway David Rubenstein Co-Founder, Chairman Co-Founder, Co-CEO, CIO Co-Founder, Co-CEO 28 Years at CG 28 Years at CG 28 Years at CG Firm Glenn Youngkin Curt Buser Michael Arpey Head of Investor Jeff Ferguson Preside
Slide 9: Is Carlyle's Exit Pace Sustainable?
IS CARLYLE’S EXIT PACE SUSTAINABLE? 9
Slide 10: Our Carry Fund Realized Proceeds Have Been Consistent
Our Carry Fund Realized Proceeds Have Been Consistent, While Remaining Fair Value Provides Substantial “Inventory” LTM1 Realized Proceeds Remaining Fair Value $25 ($ billion) Investment ($ billion) $70 Aging2 Average: 21.2 $64 $18.3 20.0 20.4 $62 $62 Various 19.7 $20 18.8 19.1 18.9 $60 17.9 17.4 16.
Slide 11: Significant Embedded Value Remaining For Future Performance
Significant Embedded Value Remaining For Future Performance Remaining Fair Value Realized Proceeds Net Accrued Performance Fees ($ billion) ($ billion) ($ billion) $70 $45 $41.6 $2.0 $4.6 $63.0 $63.3 $62.4 $1.8 $1.8 $1.8 $40 $19.7 $1.8 $60 $35 $1.6 $50 $1.4 $30 $1.2 $40 $25 $1.0 $30 $20 $17.4 $0.8 $
Slide 12: Can Carlyle Successfully Invest in the Current Environment?
CAN CARLYLE SUCCESSFULLY INVEST IN THE CURRENT ENVIRONMENT? 12
Slide 13: Carlyle Has Consistently Invested A Vast Majority Of Its Available Capital
Carlyle Has Consistently Invested A Vast Majority Of Its Available Capital Over Varying Market Cycles and Interest Rate Environments 140% 126% 120% 113% Average 2: 96% 110% 103% 103% 97% 98% 100% 93% 96% 94% 90% 95% 96% 91% 88% 81% 80% 60% % Invested 40% Average 20% 0% CEP II (2003) CP III (2000) CA
Slide 14: Carlyle Private Equity Funds Have Performed Well Through Elevated Valuation Periods
Carlyle Private Equity Funds Have Performed Well Even When Investing Through Elevated Valuation Periods Total Investments Realized/Partially Realized Investing Fund Period MOIC Gross IRR MOIC Gross IRR Carlyle Partners IV 2004 – 2007 2.4X 17% 2.5X 18% Carlyle Partners V 2007 – 2012 2.0X 20% 2.3X 24%
Slide 15: How Has Carlyle Grown the Firm?
HOW HAS CARLYLE GROWN THE FIRM? 15
Slide 16: Diverse Group of Funds Support Accelerating Performance Fees
Diverse Group of Funds Support Accelerating Performance Fees… Remaining In Accrued LTM Fair Value Net IRR Carry/ Realized ($ mm) 3/31/2015 (Clawback) Carry Carlyle Partners V $12,268 15% √ √ Europe Partners III 4,990 15% √ √ Carlyle Asia Partners III 2,396 11% √ Corporate Carlyle Partners IV 1,657 1
Slide 17: Exceptional Fundraising Capabilities Drive New Investor Relationships
Exceptional Fundraising Capabilities Drive New Investor Relationships • More than 1,650 fund investors from 76 countries 2009 2012 2015 • 250 new fund investors over past 3 years have committed $5 billion ~1,300 ~1,400 1,650+ Investors Investors Investors • 64% of fund investor capital is invested a
Slide 18: Carlyle's Culture of Innovation Drives Long-Term Growth
Carlyle’s Culture of Innovation Drives Long-Term Growth Investment/Fund Teams Added in the Past 5 Years Organic in Blue/Acquired in Green 2010 2011 2012 2013 2014 Claren Road AlpInvest NGP Energy Int’l Energy DGAM Capital Hedge Fund Energy ESG Management Metropolitan of Funds Mezzanine Real Estate S
Slide 19: One Culture
Multi-Fund Multi-Discipline Multi-Geography One Culture Global Alternative Asset Management 19
Slide 20: Appendix
APPENDIX 20
Slide 21: Corporate Private Equity: Global, Diverse, and High Performing
Corporate Private Equity: Global, Diverse, and High Performing Strategy & Returns Assets Under Management Growth • Expand position as one of the largest, Japan 9% Buyout most diverse, and consistent performing 3% Other global private equity platforms Buyout 11% • Unwavering focus on achieving strong
Slide 22: CPE Portfolio Company Earnings Growth Drives Value Creation
CPE Portfolio Company Earnings Growth Drives Value Creation Drivers of Value Creation 1 (% of Value Created) Equity Total Value Invested EBITDA Debt Multiple Fund Growth Paydown Expansion US Buyout 2 64% 17% 19% Asia Buyout 3 72% 11% 17% Europe Buyout 4 63% 19% 18% (1) Includes both realized and unr
Slide 23: CPE's Proven, Disciplined Investment Process Drives Consistent Returns
CPE’s Proven, Disciplined Investment Process Drives Consistent Returns $18 156 Deals $15 Median MOIC: 2.2X Average MOIC: 2.7X $12 Gross Profit ($ bn) $9 $6 $3 $0 <1.0 1 -2 2-3 3-4 4-5 5-6 6-7 7-8 8 -9 9 - 10 10+ ($3) Multiple of Invested Capital Note: As of 3/31/2015. Represents realized and partial
Slide 24: Carlyle Has Invested More than $10 Billion Over the Past Year
Carlyle Has Invested More than $10 Billion Over the Past Year Across the Globe In Most Sectors and Fund Strategies $12 0.1 10.1 $10 0.2 0.1 0.3 0.2 0.3 0.4 0.4 0.4 $8 0.4 0.6 0.8 $6 0.8 1.2 $4 3.8 $2 $0 Infrastructure/Power Energy Mezzanine US Buyout Japan Buyout Other Buyout Total Distressed Asia B
Slide 25: Corporate Private Equity
Corporate Private Equity Financial Data Select Active Fund Level Information Fully/ Cumulative DE1 $836 million Partially Inception Committed Invested Fund Invested Date Capital Capital MOIC Gross IRR Net IRR Fee-Related Earnings 1 $138 million US Buyout CP II Invested Oct-94 $1,331 $1,362 3.0x 34%
Slide 26: Global Market Strategies Is a Major Growth Driver
Global Market Strategies (“GMS”) Is a Major Growth Driver Strategy & Returns Assets Under Management • Seize today’s investment opportunities Credit Carry Funds Hedge Funds Carlyle GMS Finance across credit, commodities, and liquid 7% strategies to deliver outsized returns for our investors • GMS Ca
Slide 27: Global Market Strategies
Global Market Strategies Financial Data Segment Composition DE1 $78 million Product Line Strategy $ AUM (bn) # of Funds Fee-Related Earnings 1 $53 million Structured Credit Structured Credit - US & $17.1 46 Invests in performing broadly syndicated senior secured # of Funds 70 Europe1 bank loans thro
Slide 28: Global Market Strategies Offers a Diverse Set of Investment Opportunities
Global Market Strategies Offers a Diverse Set of Investment Opportunities (AUM $US in bn) Product # Team Fund Family Line Strategy Members AUM # Funds Structured Credit Structured Credit1 Leveraged Loans 23 $17.1 46 Strategic Partners Distressed 10 $1.5 2 Carlyle GMS Finance2 Corporate Lending 16 $2
Slide 29: Real Assets Has Significant Real Estate and Energy Capabilities
Real Assets Has Significant Real Estate and Energy Capabilities Strategy & Returns Assets Under Management • Build best-in-class global natural resources Legacy Energy Real Estate Natural Resources investment platform and scale the real estate investment capabilities 22% • Real Asset Funds Gross IRR
Slide 30: Real Assets
Real Assets Financial Data Select Active Fund Level Information Fully/ Cumulative DE1 $64 million Partially Inception Committed Invested Gross Fund Invested Date Capital Capital MOIC IRR Net IRR Fee-Related Earnings 1 $41 million Carlyle Realty Partners (CRP) # of Funds 28 CRP III Invested Nov-00 $5
Slide 31: Natural Resource Platform Development Targets High Growth Area
Natural Resource Platform Development Targets High Growth Area We have assembled a leading platform for investing in global natural resources through a combination of organic and acquisition initiatives Carlyle International Energy NGP Energy Capital Partners Carlyle Power Partners Management Global
Slide 32: Our Investment Solutions Businesses Offer an Array of Outcome-Oriented Investments
Our Investment Solutions Businesses Offer an Array of Outcome-Oriented Investments Strategy & Goals Assets Under Management • Design & manage portfolios of either Carlyle PE Fund of Funds RE Fund of Funds Fund of Hedge Funds products, non-Carlyle products, or combinations thereof 4%5% • Solutions pa
Slide 33: Investment Solutions
Investment Solutions Financial Data Select Business Information DE1 $40 million Corporate Private Equity Solutions Fee-Related Earnings 1 $29 million • One of the largest private # of Fund Vehicles 156 equity investors over the past # of Investment Professionals2 118 15 years • Fund of funds, second
Slide 34: Our Fund Heads Have Substantial Internal and External Expertise
Our Fund Heads Have Substantial Internal and External Expertise Corporate Private Equity Asia Buyout Asia Growth Carlyle Equity Opportunity Europe Buyout X.D. Yang - 14 Yrs Shankar Narayanan - 10 Yrs Brooke Coburn - 19 Yrs Gregor Boehm - 18 Yrs Greg Zeluck - 17 Yrs Wayne Tsou - 11 Yrs Rodney Cohen -
Slide 35: Summary Financial Results
Summary Financial Results Quarterly Annual Pre-tax Segment Measures ($ million) 1Q14 2Q14 3Q14 4Q14 1Q15 2011 2012 2013 2014 LTM Revenue Management & Transaction Fees 295 351 341 316 304 946 993 1,105 1,303 1,312 Performance Fees 605 549 224 330 602 1,106 996 2,293 1,708 1,705 Investment, Interest &
Slide 36: Strong Balance Sheet
Strong Balance Sheet Key Balance Sheet Items1 ($ million) 3/31/2015 Cash & equivalents $1,025 Net accrued performance fees (net of giveback and accrued $1,790 performance fee compensation) Investments attributable to Carlyle unitholders2 $371 Loans Payable and Senior Notes $1,145 Drawn revolving cre
Slide 37: Key Metrics for "The Carlyle Engine"
Key Metrics for “The Carlyle Engine” Quarterly Data Annual Data 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total AUM(1) ($ bn) 180.4 185.0 188.8 198.9 202.7 202.6 194.5 192.7 Total AUM(1) ($ bn) 45.3 80.6 86.3 89.8 107.5 147.0 170.2 188.8 194.5 192.7 Co
Slide 38: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials Quarterly Annual ($ millions) 1Q14 2Q14 3Q14 4Q14 1Q15 2011 2012 2013 2014 LTM Income before provision for income taxes $ 472 $ 541 $ 175 $ (197) $ 615 $ 1,183 $ 2,440 $ 1,444 $ 992 $ 1,134 Adjustments: Partner compensation(1) - - - - - (672) (265) - - -
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