Carlyle Group (NASDAQ:CG) executives struck an upbeat tone on the firm’s fourth-quarter and full-year 2025 earnings call, pointing to record fee-related earnings, strong fundraising and accelerating realization activity as key highlights of what CEO Harvey Schwartz described as a “record year” that materially exceeded the targets set at the beginning of 2025.
Record year across earnings, fundraising and AUM
Schwartz said Carlyle delivered record fee-related earnings (FRE) in 2025, up 12% year-over-year, along with record FRE margins of 47%. The firm also generated $54 billion of inflows, surpassing its original $40 billion target, and ended the year with record assets under management (AUM) of $477 billion, driven by investment performance and fundraising.
Distributable earnings and fee revenues
New CFO Justin Plouffe, who was introduced on the call after assuming the role, said Carlyle generated $1.7 billion of distributable earnings (DE) in 2025, or $4.02 per share, up 11% from the prior year and the highest level since 2022. Fourth-quarter DE was $436 million, or $1.01 per share.
Plouffe said FRE totaled a record $1.24 billion for 2025, reflecting a 12% organic growth rate. Fourth-quarter FRE was $290 million. Total fee revenues were also a record at $2.6 billion for the year, representing 10% organic growth, with Carlyle AlpInvest and Global Credit cited as key drivers.
- Total fee revenues: $2.6 billion for 2025; $670 million in 4Q (up 2% year-over-year)
- Key fee revenue drivers: AlpInvest up 46%; Global Credit up 13%
- FRE margin: 47% for 2025, up from 46% in 2024
Management emphasized that margin expansion reflects operating discipline and scalability, while noting continued investment in growth initiatives including global wealth, insurance solutions and asset-backed finance.
Exits, IPO activity and capital returned to investors
In discussing the macro backdrop, Schwartz said 2025 saw improved sentiment, with M&A and IPO activity accelerating, credit spreads ending the year near all-time tights, and equity markets at all-time highs. He also argued Carlyle has been an outlier in private equity monetizations, stating that since 2024 the firm has been the number one private equity sponsor globally by IPO proceeds, generating roughly $10 billion of IPO issuance over the past two years.
Schwartz pointed to Medline as the most recent example, describing it as an IPO that raised more than $7 billion at a $49 billion equity valuation. He said the deal was the largest sponsor-backed IPO of all time, the largest healthcare IPO ever, and the largest IPO of 2025, adding that the shares were trading more than 50% above the IPO price at the time of the call.
He also highlighted other sponsor-backed IPOs across regions, including StandardAero in the U.S., Orion Breweries and Rigaku in Japan, and Hexaware in India. Schwartz emphasized the “breadth and diversity” of offerings across geographies and sectors.
Carlyle returned $18 billion of capital to investors in 2025, matching the $18 billion returned in 2024, and Schwartz said he expects exit momentum to continue into 2026.
Plouffe added that realized proceeds totaled $34 billion in 2025, almost 20% higher year-over-year and the firm’s second-best year on record. He said Carlyle returned 17% of beginning value over the past year, which he characterized as significantly above the industry average, and noted that $12 billion of proceeds were realized in the fourth quarter alone.
Business-line highlights: AlpInvest, Global Credit and wealth
Management devoted significant time to Carlyle AlpInvest and Global Credit, both of which were cited as major drivers of fee growth and fundraising momentum.
Schwartz said AlpInvest had a record year of growth, returning over $10 billion to investors and investing a record $14 billion. He noted the closing of the firm’s largest-ever secondary strategy at $20 billion and described continued demand for secondary solutions as investors seek liquidity and portfolio optimization.
Plouffe reported AlpInvest delivered record FRE of $274 million in 2025, up nearly 60%, and record DE of $319 million, up almost 70%. Net accrued carry for the segment ended the year at $656 million, up 21% year-over-year. Addressing a question about catch-up fees, management said catch-up fees were not negative in the fourth quarter and noted that, excluding catch-up fees earlier in the year, AlpInvest management fees were up 4% quarter-over-quarter.
In Global Credit, Schwartz said direct lending had a record quarter of originations and highlighted the hiring of a new head of direct lending and additional senior origination professionals. He also cited realized losses averaging about 10 basis points per year over the past decade. Schwartz said Carlyle priced a record 39 CLOs in 2025 amid record industry issuance, and Plouffe said CLO inflows were $7 billion in 2025, up almost 20% from the prior year.
Plouffe said Global Credit generated record FRE of $402 million in 2025, up 21%, while DE reached a record $481 million, aided by net realized performance revenue that tripled year-over-year. For the fourth quarter, Global Credit FRE was $102 million (up 4%) and DE was $123 million (up 7%).
On wealth, Schwartz said the firm posted another year of record inflows and nearly doubled Evergreen Wealth AUM year-over-year. He also said Carlyle soft-launched CPEP, a private equity solution for individual investors in the U.S., with a select group of registered investment advisors. Schwartz said the wealth organization expanded meaningfully in 2025, with headcount up about 50%, and the firm added a head of retirement solutions, a new role.
Market volatility, portfolio exposure and outlook items
During Q&A, Schwartz addressed questions about whether private equity monetization momentum is sustainable into 2026 given recent market volatility. He said he would be “reluctant to extrapolate the last week’s volatility” into a prolonged period, and added that January portfolio data “looks very good” in terms of GDP growth, margins and EBITDA generation, while acknowledging markets have shown “jitters” and “fragility” from record-high levels.
On credit and broader market concerns around software exposure, Schwartz said Carlyle’s software exposure is 6% of total AUM, which he said is below peers, and added the firm used a broad definition in calculating that figure. When asked specifically about CLO exposure and potential impacts to over-collateralization tests, Schwartz said Carlyle’s software exposure in CLOs is “right on top of the index” (neither overweight nor underweight) and said he did not expect recent volatility to affect CLO performance.
Management repeatedly pointed analysts to a shareholder update scheduled for February 26, where Schwartz said Carlyle will share multi-year financial targets and additional strategic detail. Plouffe also said the firm entered 2026 with “solid momentum,” supported by a diversified fundraising pipeline, expansion in global wealth, and improving capital markets conditions, while noting the macro environment remains complex but “generally constructive” for deployment and realization activity.
On capital management, Plouffe said Carlyle ended 2025 with $2 billion of cash, over $3 billion of investments, and almost $3 billion of net accrued carry, and returned a record $1.2 billion to shareholders during 2025 through dividends and share buybacks.
About Carlyle Group (NASDAQ:CG)
The Carlyle Group (NASDAQ: CG) is a global alternative asset manager that invests across a range of strategies including private equity, real assets (such as real estate and infrastructure), global credit, and investment solutions. Founded in 1987 and headquartered in Washington, DC, Carlyle raises and manages investment funds that acquire, operate and exit companies and assets on behalf of institutional and private investors. The firm is publicly traded on the Nasdaq exchange and operates as an asset manager and investment advisor rather than as an operating company.
Carlyle’s core activities include sourcing and executing private equity buyouts and growth investments, originating and managing credit and financing solutions, and acquiring and operating real asset portfolios.
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