We use cookies to improve your experience, analyze site usage, and show relevant ads. Go to our Privacy Policy for details.
The call was broadly positive: the firm reported strong underlying operating metrics (record realizations, durable inflows, record dry powder, rising AUM in key businesses, and solid fee-related earnings and margins) and highlighted notable transactions and a $5+ billion LP-anchored solution that demonstrates product innovation. Near-term lowlights include lower realized carry/NRPR composition this quarter, low AlpInvest carry compensation and some wealth-channel redemption scrutiny and day‑1 markup attention. Management emphasized confidence in meeting multi-year targets and expects transaction and fee revenue to accelerate, suggesting the positives materially outweigh the short-term headwinds.
Management reiterated confidence in their February targets, restating a path to $200 billion of inflows, $1.9 billion of fee‑related earnings and $6+ of distributable earnings per share by end‑2028, and said they expect mid‑to‑high single‑digit FRE growth in 2026, acceleration in management fees over the next two years, a pickup in transaction‑fee revenue next quarter (driven by recently signed/closing deals), and higher realized carry/NRPR through the remainder of 2026 from near‑term drivers including Japan IV, the third Financial Services fund and the fourth European Technology fund.
Distributable earnings of $327 million ( $0.89 per share) in Q1; fee-related earnings (FRE) of $300 million at a 47% margin (up from $290 million in Q4). Fund management fees were $545 million, up 4% year-over-year.
Realizations exceeded $12 billion in the quarter (third-best quarter ever). Returned a record $7 billion to U.S. buyout investors this quarter; the rate of return to U.S. Buyout Fund investors was more than 40% higher than the prior record set in 2021.
AlpInvest reached record AUM of $107 billion, up 20% year-over-year, with record quarterly inflows of $6.8 billion. Net accrued performance revenues were $643 million, up 13% year-over-year. FRE for AlpInvest was $68 million in Q1 despite $13 million less in catch-up fees. Wealth strategies AUM now stands at $19 billion (4x the level from three years ago).
Global Credit FRE of $93 million; management fees of $147 million, up 6% year-over-year. Total Global Credit AUM $209 billion, up 5% year-over-year, with inflows of $3.9 billion in the quarter and $25 billion of credit inflows over the last 12 months. New asset-backed finance strategy first close $1.5 billion; that strategy now tops $12 billion (up more than 30% vs last year). Credit portfolio highlights: direct lending nonaccrual rate only 1% and inception-to-date loss rate ~8 basis points per annum; structured credit default rate ~50 basis points (about half the industry average).
Deployment of $10 billion in the quarter; invested $4 billion in private credit and nearly $4 billion across AlpInvest strategies. Announced two large transactions expected to close in coming months: an $8 billion BASF coatings carve-out and a $3 billion acquisition of MAI Capital Management. Management expects increased transaction fee revenue from these deals.
New capital inflows of $13 billion in the quarter. Dry powder at a record $96 billion, up 13% year-over-year. Carlyle raised nearly $7 billion in AlpInvest and $4 billion in Global Credit during the quarter.
Balance sheet assets attributable to shareholders ~ $5 billion (~$14 per share). Quarterly dividend declared at $0.35 per common share. Repurchased/withheld 3.8 million shares totaling $205 million in the quarter and have $1.9 billion remaining on a $2 billion repurchase authorization; diluted share count of 360 million is down year-over-year.
Management reiterated confidence in achieving or exceeding targets outlined in February: a path to $200 billion of inflows, $1.9 billion in fee-related earnings, and $6+ per share in distributable earnings (DE) by end of 2028.
Good day, ladies and gentlemen, and welcome to The Carlyle Group First Quarter 2026 Earnings Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Daniel Harris, Head of Investor Relations. Sir, the floor is yours.
Thank you, operator. Good morning, and welcome to Carlyle's First Quarter 2026 Earnings Call. With me on the call this morning is our Chief Executive Officer, Harvey Schwartz; and our Chief Financial Officer, Justin Plouffe. Earlier this morning, we issued a press release and a detailed earnings presentation, which is available on our Investor Relations website. This call is being webcast, and a replay will be available. We will refer to certain non-GAAP financial measures during today's call. These measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. We have provided reconciliation of these measures to GAAP in our earnings release to the extent reasonably available.
Any forward-looking statements made today do not guarantee future performance, and undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the Risk Factors section of our annual report on Form 10-K that could cause actual results to differ materially from those indicated. Carlyle assumes no obligation to update any forward-looking statements at any time. In order to ensure participation by all those on the line today, please limit y...