Carlyle Group Inc.
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 10, 2026
CG$39.70-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001527166-26-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001527166-26-000045
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 1389 previous paragraphs and 1357 current paragraphs.
774 unchanged; 275 reworded; 282 added; 321 removed; 19 previous and 26 current paragraphs rearranged.
Tables are not compared: 48 previous and 47 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (282)
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Global Private Equity segment had$162.7 billion in AUM and$96.6 billion in Fee-earning AUM.
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$211.1 billion in AUM and$167.6 billion in Fee-earning AUM.
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(CDLF).
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Our global business is affected by the conditions in the global financial markets, global economies and the geopolitical
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landscape, particularly in the U.S., Europe, and Asia, as discussed in Item 1A “Risk Factors” of our Annual Report on
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Form 10-K.
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Equity markets posted their strongest quarterly returns since 2020 in Q2 2026, rising despite persistent geopolitical
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tensions in the Strait of Hormuz. Although a ceasefire agreement improved market sentiment, geopolitical tensions persisted,
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and shipping through the Strait of Hormuz remained well below pre-conflict levels, leaving physical supply constraints largely
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intact. The S&P 500, NASDAQ Composite, and Russell 2000 returned 14.9%, 21.4%, and 21.2%, respectively, supported by
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upward earnings per share (“EPS”) revisions—consensus 2026 S&P 500 EPS growth has risen 1,440 basis points (“bps”) since
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the onset of the Iran conflict. Rotation was a defining feature through the first half of the year: the Magnificent 7 stocks
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declined 10% from their peak and software stocks finished the half down 20%, while traditional economy sectors such as
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construction & engineering, communications equipment, and marine transport, as well as hardware, led performance, and small
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caps outperformed large caps by over 1,000 bps. Globally, Europe’s Euro Stoxx 50 returned 13.6% during the quarter, while
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Asian markets were the strongest performers—Korea’s KOSPI, Taiwan’s TAIEX, and Japan’s Nikkei returned 67.8%, 45.4%,
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and 37.2%, respectively, driven by semiconductor demand tied to AI infrastructure. However, record earnings from memory
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chip manufacturers paradoxically triggered a sharp KOSPI selloff of 25% from peak, as investors grew concerned that surging
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circuit board costs could impair the economics of the broader AI value chain. In private markets, buyout performance improved
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somewhat compared to the S&P 500 for Q1 2026 (the latest data available), but this was primarily due to quarter end volatility.
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Over longer periods against benchmarks that align more closely with market capitalization and display less concentration,
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buyouts continue to outperform. Compared to the S&P 600 small-cap index, U.S. buyouts have generated outperformance of
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506 bps over the last five years, 386 bps over the last 10 years, and 310 bps over the last 15 years.
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Official estimates of U.S. GDP surprised to the downside in Q2 2026, but real final demand came in right on top of the
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2.2% estimate implied by our proprietary portfolio data, as a surge in AI-related capital goods imports slowed topline GDP
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growth relative to what would be implied by investment outlays, and inventory liquidation also reduced growth. Our measure of
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corporate revenue growth accelerated to 6.2% annualized in Q2 2026, up from 5.7% in Q1 2026, but price rather than volume
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accounted for a disproportionate share of that growth. Our data imply real consumption slowed to 1.8% annualized as
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households absorbed the price shock, with spending among top-third households growing at 2.3x the rate of bottom-third
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households. Headline inflation finished June at a 3.7% annual rate, and with core inflation above 3%, the Fed has not hit its
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inflation target in five years. Against this backdrop, interest rates no longer appear to be on a pre-set path toward sub-3%, and
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market participants largely expect the Fed’s next move to be a rate hike. The clearest source of strength was business
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investment: our data indicate U.S. business spending rose at a 15.8% annualized rate, with corporate information technology
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services up 28.3%. AI-related investment remains the primary driver—compute capex has grown at an 80% annualized rate
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since year-end 2024, and data center real estate is now roughly 3.8x its year-end 2022 level. This spending surge is also bidding
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away finite resources—grid capacity, engineering talent, construction labor, and key materials—raising input costs and creating
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headwinds for competing capital projects.
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European conditions stabilized as the quarter progressed. German factory orders, while still negative, rebounded from
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post-conflict troughs, and euro area order books improved, signaling firmer forward demand. A notable structural development
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was the agreement by the EU’s six largest economies on capital markets integration, which could mobilize an estimated €8
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Global Private Equity segment had$159.0 billion in AUM and$99.1 billion in Fee-earning AUM.
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$209.5 billion in AUM and$166.4 billion in Fee-earning AUM.
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Thecommencement of hostilities in the Middle East and the closure of the Strait of Hormuz have not yet manifested as
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visible economic damage. However, risks to the global economy remain elevated as the conflict in the Middle East persists, and
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those risks will continue to rise for as long as the Strait remains effectively shut. Approximately 20% of global crude oil, 20%
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of global liquid natural gas (“LNG”), 30% of global helium supplies, and 50% of global stocks of urea, the most widely used
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nitrogenous fertilizer, transit the Strait. For the industrial sector, energy looms large, but for many businesses beyond this
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sector, disruptions to supplies of petrochemicals, metals, helium, and other byproducts of LNG processing are just as
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significant. In the U.S., which is less reliant on imports that traverse the Strait, impacts seem most likely to manifest in higher
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prices, which could put downward pressure on consumption demand and slow overall growth. For much of the rest of the
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world, impacts could be more substantial, with physical shortages of energy and supplies resulting in outright demand
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destruction. Global supply shortages also have significant implications for the AI buildout, and AI-related capex growth
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intentions could be pared back materially should the conflict become prolonged.
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In equity markets, investors have grown skeptical about returns to AI capex: the Magnificent 7 stocks declined 12%
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during the quarter, though recent layoff announcements (presumably in an effort to offset these AI-related capex costs) and
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soaring cloud revenues have driven a recovery rally that has more than erased the drawdown, lifting the group above its
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October 2025 market peak to new all-time highs (as of May 8, 2026). The quarter was also marked by distinct pre- and post-
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conflict market dynamics. In the U.S., prior to February 27, 2026, investors rotated away from mega-cap technology and
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software toward “real economy” sectors: industrials were up 14%, while SaaS stocks were down 30% from the start of the year
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through that date, as new AI capabilities raised concerns about incumbent business models. After February 27, 2026, however,
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that rotation partially reversed in response to the energy shock, and industrials underperformed through quarter-end. Since the
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end of the first quarter of 2026, both “real economy” sectors and enterprise software (which is seen as less vulnerable to AI
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disruption) have performed well, while SaaS and cloud services providers continue to lag. Overall, the S&P 500 ended the
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quarter down 4.6%, though significant upgrades to “consensus” earnings estimates coupled with market optimism for an end to
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the Middle East conflict have driven the index to record highs in May. This recent rally is a symptom of the difficulty investors
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face in hedging and quantifying geopolitical risk. In contrast to other discrete shocks, such as the failure of SVB in 2023,
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markets face less clarity in mapping out the trajectory of evolving geopolitical developments and so tend to “look through”
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them. Globally, Japan’s Nikkei and Europe’s Euro Stoxx 50 started the quarter up 16.9% and 6%, respectively, prior to the
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outbreak of hostilities, but ultimately finished the quarter up just 1.4% and down 3.8%, respectively. The shock also reaffirmed
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the notion that bonds no longer hedge equity market risk. Bonds have now sold off with stocks during each major shock of the
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last 12 months, and the correlation between the monthly returns of stocks and bonds has moved from -25% to +50% since 2022.
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As the “natural” hedge of the traditional 60/40 portfolio continues to dissolve, investors may choose to rotate towards private
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markets to achieve greater diversification.
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The U.S. economy retained underlying momentum during the quarter. The labor market did not show obvious signs of
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deterioration, and our measure of real final demand—a proxy for real GDP net of foreign trade and inventories—grew at a 2.7%
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annualized rate, a result consistent with 5.7% annual growth in S&P 1500 revenue. Business spending continued to advance at
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an 11.1% annualized rate, led by AI-related investment. That strength is not limited to capex associated with data centers, which
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continues to grow at prodigious rates, but also reflects enterprise IT budgets, as the need to devise and implement AI strategies
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has moved technology spending from “nice to have” to a top corporate priority. Much of the spending thus far has been
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concentrated in data capture, storage, and analytics, with companies also reporting significant value from dynamic pricing
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March 31, 2026, our Carlyle AlpInvest segment had$106.9 billion in AUM and$67.9 billion in Fee-earning AUM.
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June 30, 2026, our Carlyle AlpInvest segment had$111.7 billion in AUM and$70.2 billion in Fee-earning AUM.
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management of$475 billion as of March 31, 2026 for each of our three global business segments (in billions):
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management of$485 billion as of June 30, 2026 for each of our three global business segments (in billions):
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an investment adviser to those funds.
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an investment adviser to these funds.
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(5)Includes our business development companies (CGBD / CARS) and our evergreen fund (CDLF).
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(5)Includes our business development companies (CGBD / CARS), Europe Direct Lending funds (EDLF / ETAC), and our evergreen fund
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(6)Includes our Energy Credit (CEMOF) and Real Estate Credit (CNLI) funds.
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(6)Includes our Real Estate Credit fund (CNLI).
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In the first quarter of 2026, we deployed$10.0 billion across our platform and in contrast to the deceleration in LBO
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In the second quarter of 2026, we deployed$14.3 billion across our platform and$53.0 billion over the last twelve
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activity in the broader market, we realized proceeds of$12.2 billion in our traditional carry funds, including $6.9 billion in
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months. In our traditional carry funds, we realized proceeds of$6.7 billion in the second quarter of 2026 and$36.8 billion over
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Our carry fund portfolio appreciated 1% in thefirst quarter. Within our Global Private Equity segment in thefirst quarter,
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Our carry fund portfolio appreciated 3% in thesecond quarter. Within our Global Private Equity segment in thesecond
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our corporate private equity funds depreciated(2)% as market price decreases in certain publicly traded positions offset
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quarter, our corporate private equity funds appreciated 2% as market price decreases in certain publicly traded positions offset
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appreciation elsewhere, our infrastructure & natural resources funds appreciated 9% driven by our international energy funds
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appreciation elsewhere, our infrastructure & natural resources funds appreciated 6% driven by our international energy funds
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and appreciation in the NGP Carry funds, and our real estate funds appreciated 1%. Our Global Credit carry funds, which
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and appreciation in the NGP Carry funds, and our real estate funds were flat. Our Global Credit carry funds, which represent
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represent approximately 11% of the total Global Credit remaining fair value as of March 31, 2026, appreciated 4% in thefirst
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approximately 11% of the total Global Credit remaining fair value as of June 30, 2026, appreciated 4% in thesecond quarter.
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syndication for our portfolio companies and third-party clients, which are generally not subject to rebate offsets as described
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syndication for our portfolio companiesand third-party clients, which are generally not subject to rebate offsets as described
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commonly referred to as carried interest, from certain of our investment funds, which we refer to as the “carry funds.” Carried
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commonly referred to as carried interest, from certain of our investment funds, which we refer to as “carry funds.” Carried
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hurdles as set forth in each respective partnership agreement and is based on the amount that would be due to us pursuant to the
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hurdles as set forth in each respective fund partnership agreement and is based on the amount that would be due to us pursuant
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fund partnership agreement at each period end as if the funds were liquidated at such date. Accordingly, the amount of carried
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to the fund partnership agreement at each period end as if the funds were liquidated at such date. Accordingly, the amount of
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interest recognized as performance allocations reflects our share of the fair value gains and losses of the associated funds’
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carried interest recognized as performance allocations reflects our share of the fair value gains and losses of the associated
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underlying investments measured at their then-current fair values relative to the fair values as of the end of the prior period. As
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funds’ underlying investments measured at their then-current fair values relative to the fair values as of the end of the prior
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a result, the performance allocations earned in an applicable reporting period are not indicative of any future period, as fair
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period. As a result, the performance allocations earned in an applicable reporting period are not indicative of any future period,
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values are based on conditions prevalent as of the reporting date. Refer to “—Trends Affecting Our Business” for further
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as fair values are based on conditions prevalent as of the reporting date. Refer to “—Trends Affecting Our Business” for further
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interest associated with the AlpInvest fund vehicles is subject to entity level income taxes in the Netherlands. Additionally, in
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interest associated with the AlpInvest fund vehicles is subject to entity level income taxes in the Netherlands. Additionally, we
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connection with the acquisition of Abingworth, we are entitled to 15% of carried interest generated from certain Abingworth
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are entitled to 15% of carried interest generated from certain Abingworth funds.
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In addition, realized performance allocations may be reversed in future periods to the extent that such amounts become
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In addition, realized performance allocations may be reversed in future periods if a fund’s investment values decline
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certain return hurdles, which vary from fund to fund. This amount is known as the “giveback obligation.” In all cases, each
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below certain return hurdles, which vary from fund to fund, and become subject to a giveback obligation. See Note 7,
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subject to a giveback obligation. The aggregate amount of giveback obligations realized since Carlyle’s inception totaled
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Commitments and Contingencies, for more information. The aggregate amount of giveback obligations realized since Carlyle’s
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$264.6 million,$181.8 million of which was related to various Legacy Energy Funds. Given that current and former senior
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inception totaled$264.6 million,$181.8 million of which was related to various Legacy Energy Funds. Given that current and
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Carlyle professionals and other limited partners of the Carlyle Holdings partnerships are responsible for paying the majority of
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former senior Carlyle professionals and other limited partners of the Carlyle Holdings partnerships are responsible for paying
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the realized giveback obligation, only$88.5 million of the$264.6 million aggregate giveback obligation realized since
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the majority of the realized giveback obligation, only$88.5 million of the$264.6 million aggregate giveback obligation realized
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inception was attributable to Carlyle. The realization of giveback obligations for the Company’s portion of such obligations
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since inception was attributable to Carlyle. The realization of giveback obligations for the Company’s portion of such
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reduces Distributable Earnings in the period realized. Further, each individual who holds equity interests in carried interest
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obligations reduces Distributable Earnings in the period realized. Further, each individual who holds equity interests in carried
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generated by our funds and is a recipient of realized carried interest typically signs a guarantee agreement or partnership
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interest generated by our funds and is a recipient of realized carried interest typically signs a guarantee agreement or partnership
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realized performance allocations and incentive fees from our funds, net of the portion allocated to our investment professionals,
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realized performance allocations and incentive fees from our funds, net of (i) amounts allocated to our investment professionals
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and other employees and certain tax expenses associated with carried interest attributable to certain partners and employees,
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and other employees, (ii) non-controlling interests, and (iii) certain tax expenses associated with carried interest attributable to
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which are reflected as realized performance allocations and incentive fees related compensation expense. See “—Non-GAAP
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certain partners and employees, which are reflected as realized performance allocations and incentive fees related compensation
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Financial Measures” and “—Segment Analysis” for the amount of realized net performance revenues recognized each period
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expense. See “—Non-GAAP Financial Measures” and “—Segment Analysis” for the amount of realized net performance
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Investment income also represents the realized and unrealized gains and losses on our principal investments, including
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Investment income also represents the realized and unrealized gains and losses on our principal investments and our
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principal investment income (loss) is recorded when we redeem all or a portion of our investment or when we receive or are due
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strategic investments in NGP as described below. Realized principal investment income (loss) is recorded when we redeem all
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income is realized when we redeem all or a portion of our investment or when we receive or are due cash income, such as
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or a portion of our investment or when we receive or are due cash income, such as dividends or distributions. A realized
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deemed to be permanently impaired or worthless. Unrealized principal investment income (loss) results from changes in the fair
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principal investment loss is also recorded when an investment is deemed to be permanently impaired or worthless. Unrealized
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value of the underlying investment, as well as the reversal of previously recognized unrealized gains (losses) at the time an
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previously recognized unrealized gains (losses) at the time an investment is realized.
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revenues recognized each period and related discussion.
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principal investment income (loss) results from changes in the fair value of the underlying investment, as well as the reversal of
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included in this Quarterly Report on Form 10-Q.
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to the limited partner investors is allocated to non-controlling interests. Moreover, although the assets of the Consolidated
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Consolidated Funds. The majority of the net economic ownership interests of the Consolidated Funds are reflected as non-
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“—Trends Affecting Our Business” for further discussion on our investment activity and broader market trends.
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ended June 30, 2026 was primarily attributable to performance allocations on funds managed by NGP. Principal investment
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tax rate for thesix months ended June 30, 2026 and 2025 primarily comprised the 21% U.S. federal corporate income tax rate
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change in the tax classification of a consolidated subsidiary.
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months ended June 30, 2026 and 2025, respectively.
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as well as investment activity in our funds which charge fees on invested capital.
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•Inflows of$1.9 billion, primarily driven by investments in our evergreen funds which charge fees on net asset value,
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as well as investment activity in our funds which charge fees on invested capital.
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from our U.S. real estate funds and, $0.1 billion from our Europe buyout funds.
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•Negative market activity of$2.3 billion, which primarily reflected a decrease in the fair value of assets covered by
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the Fortitude strategic advisory services agreement.
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separately managed accounts, gross redemptions in our evergreen products, outflows from our liquid credit products, and the expiration
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(7)Gross Internal Rate of Return (“Gross IRR”) represents an annualized return on Limited Partner invested capital, based
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(9)Net Internal Rate of Return (“Net IRR”) represents an annualized return on Limited Partner invested capital, based on
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(10)Represents the net accrued performance revenue balance/(giveback obligation) as of the current quarter end.
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portfolio finance strategy, as well as investment activity in our Carlyle AlpInvest wealth products.
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•Inflows of$15.5 billion, which were driven by fee-paying capital raised and investment activity across all strategies,
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investments (if any), were approximately$1.3 billion at June 30, 2026. However, a portion of this cash is allocated for specific
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included in this Quarterly Report on Form 10-Q.
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portfolio offset by proceeds related to distributions of our investments. As of June 30, 2026 and June 30, 2025, our investments
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accrued performance allocations, largely attributable to declines in market prices of certain public investments and the impact
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investment fund is considered separately in evaluating carried interest and potential giveback obligations. See Note 7,
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Commitments and Contingencies, for more information.
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cash income, such as dividends or distributions. A realized principal investment loss is also recorded when an investment is
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Funds. Moreover, although the assets of the Consolidated Funds are consolidated onto our balance sheet pursuant to U.S.
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of certain public investments and the impact of preferred return, partially offset by accruals of Performance
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•In the Global Credit segment, for thethree months ended March 31, 2025, Performance allocation accruals were
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•In the Carlyle AlpInvest segment, for thethree months ended March 31, 2025, performance allocation accruals were
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Interest and other expenses of Consolidated Funds. Interest and other expenses of Consolidated Funds increased $52.9
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income (loss) of Consolidated Funds, including our consolidated CLOs and certain other funds:
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million for thethree months ended March 31, 2026 as compared to thethree months ended March 31, 2025, primarily due to a
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million for thethree months ended March 31, 2026 as compared to thethree months ended March 31, 2025, primarily due to
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The table below provides the period to period rollforward of Total AUM in our Global Private Equity segment.
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accrued fee related performance revenues for CPI as of March 31, 2026.
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for thethree months ended March 31, 2026, as compared to thethree months ended March 31, 2025, primarily attributable to an
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value of assets covered by the Fortitude strategic advisory services agreement, partially offset by increases in the fair
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•Positive foreign exchange activity of$1.1 billion, primarily from the translation of our EUR-denominated funds to
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to non-controlling interests, and (iii) regulatory capital.
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offset by cash used to fund commitments and investments in our portfolio. As of March 31, 2026 and March 31, 2025, our
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on Form 10-Q for details on thedecrease in Cash and cash equivalents.