Carlyle Group (CG)

Business Overview

Carlyle is where you go to see how hard unrealised carry is to value. It runs diversified private equity and credit at $16.2 billion of market capitalisation as of 10 June 2026, the smallest of the six managers we cover and a third the size of the next one up, Ares. Total AUM ended FY2025 at $477 billion; fee-earning AUM was $337 billion.

FY2025 fee-related earnings were $1.2 billion at a 47% margin. Distributable earnings in the segment table were $1.7 billion before tax, and $4.02 per share after it. Carlyle publishes the total pre-tax and the per-share figure post-tax, while Blackstone's headline $7.1 billion of DE already has taxes and related payables taken out, so the two totals are not on the same footing until you adjust. The FRE vs distributable earnings guide sets out the tax basis for each.

Net accrued performance revenues were $2.9 billion at year-end 2025, more than twice a full year of FRE and about 18% of the whole market capitalisation. Carry is not earned in a straight line: a fund pays the manager nothing until it clears its preferred return, then a catch-up hands over the economics quickly. So that balance is a claim on future exits at today's marks, not a receivable. Perpetual fee-earning AUM was $111 billion, 33% of the fee-earning base. FY2025 inflows were $53.7 billion.

How the Numbers Read

Pre-tax DE of $1.7 billion exceeds FRE by $0.5 billion, a narrower gap than Blackstone's $1.4 billion and on a fraction of the scale. The bridge is $1,236 million of FRE plus $357 million of realised net performance revenues and $152 million of realised principal investment income, less $54 million of net interest. After-tax DE of $4.02 per share on 361.2 million shares gives roughly $1.45 billion, which is the number to set against market cap.

The $2.9 billion carry balance is Carlyle's own net accrued performance revenues, already after the share owed to deal teams. It is struck on the manager's own marks, so a soft year in the funds shrinks it with nothing sold. The carried interest guide covers the hurdle mechanics. When exits do come, the money lands in DE and never in FRE.

Perpetual fee-earning AUM at 33% of the fee-earning base leaves Carlyle more drawdown-weighted than KKR (51% of FPAUM), Apollo (over 70% of fee-generating AUM) or Brookfield (87% of fee-bearing capital). Fundraising was $53.7 billion in FY2025. Compare that with Blackstone's $239.4 billion of inflows only loosely: managers count the same event differently.

Valuation Framework

Alternative managers are valued first on P/FRE, the multiple of fee-related earnings, and a drawdown-weighted fee base like Carlyle's has to be re-raised more often than a perpetual one. The valuation guide sets out the method.

P/DE against P/FRE is an earnings-mix statistic and nothing more: both multiples divide the same market capitalisation, so one over the other is exactly FRE divided by DE. It says the distributable line ran above the fee line last year. It does not say what the market thinks the realisation layer is worth.

Take the $2.9 billion of accrued carry at face value against a $16.2 billion company and it is nearly a fifth of the equity. Whether it is worth that depends on exits: the money arrives only when funds are sold, on a timetable the manager controls and the marks can undo.

What to Watch in the Financials

Carry accrual against FRE. $2.9 billion of accrued carry on $1.2 billion of annual FRE is the ratio that defines this share. Exits turn accrual into DE; markdowns take it away, and neither touches the fee line.

Pre-tax versus after-tax DE. The segment total is pre-tax ($1.7 billion), the per-share figure is post-tax ($4.02). Use the after-tax number against market cap, and label whichever one you quote.

Perpetual mix (33%). Growth in the $111 billion perpetual bucket lengthens the life of the fee base. Standing still leaves two-thirds of the fee base to be re-raised.

FRE margin at 47%. Below Blackstone (~58.3%) and well below KKR (69%). Compensation and business mix explain the gap; watch whether the credit build improves it or dilutes it further.

Key Risks

Exits. The whole $2.9 billion is unrealised. A long freeze in exit markets leaves the fees intact and the conversion stalled.

Slower fee growth. Carlyle is a smaller diversified platform. Raising $53.7 billion in a year against Blackstone's $239.4 billion means the fee base grows more slowly.

Drawdown-heavy mix. With two-thirds of the fee base in funds that eventually wind up, a weak fundraising year feeds through to management fees far faster than it would at Brookfield or Apollo.