Bank of America Merrill Lynch Banking & Financial Services Conference Glenn Youngkin Co-President & Co-Chief Operating Officer November 12, 2014
Carlyle at a Glance Corporate Private Equity Global Market Strategies Real Assets Solutions Carlyle Quantit FO Japan GMS ative Real Hedge Buyout Finance Strategi Estate Funds 3% Growth Other Other 6% es 1% FOF 4% 6% 8% 9%…
Why should you be excited about the Alternative Asset Management business 4
Alternative Strategies Growing Rapidly & Taking Share in a Growing Market Alternatives AUM is 7 trillion today vs. 2 trillion a decade ago (13% CAGR) Asset management AUM is 64 trillion today vs. 38 trillion a decade ago (5% CAGR)…
Alternatives Fee Revenue Growth Expected to Outpace Industry Global Asset Management Market In a Growing Overall Global Asset Estimated Revenue Pool ( billion) Management Fee Pool... 270 B 420 B 100% 270B 420B 8% 7% Cash/Passive 7%…
Private Equity & Hedge Fund AUM Stand At Record Levels With Strong Growth Trends 4.0 Global Private Equity AUM ( trillions) 3.5 3.3 3.0 3.0 2.8 20% 2.5 2.3 2.3 CAGR 2.0 1.7 1.2 1.0 1.0 0.7 0.8 0.8 0.9 0.4 0.2 0.3 0.0 0.0…
The Largest Alternative Managers Only Represent a Small Percent of Segment Assets Today 100% 24% 80% 40% 50% Rest 68% 73% 60% 84% 91% 92% 40% 76% 60% Top 5 50% 20% Managers 32% 27% 16% 9% 0% 8% Large-cap domestic Hedge…
Is Carlyles realization cycle peaking We do not think so. 10
Each Specific Fund Has an Associated Cash Cycle Each individual carry fund has a cyclical nature to it: investing, harvesting, and Higher Performance wind down Fees, Lower Fee Related Fee economics are highest Higher Fee…
But Carlyles Multiple Economic Engines Help Mitigate the Impact of Any Single Fund Cycle Multiple Economic Engines Could Help Smooth the Earnings Cycle of Each Fund Increased Stability in Performance Fee Economics Increased…
Strength in Deal Activity & Fund Performance Should Drive Significant Future Exit Activity Global Private Equity Deal Volume Global Private Equity Exit Volume ( billion) ( billion) 800 785 781 800 700 700 600 600 500 426 500…
Accelerating M&A and Issuance Strength Supports Healthy Realization Activity Global ECM Activity ( billion) Global Announced M&A ( billion) 1,000 800 Global Announced M&A 600 25% Financial Sponsor M&A Share 5,000 400 200 20%…
Our Carry Fund Realized Proceeds Have Been Persistent, While Remaining Fair Value Continues to Grow LTM1 Realized Proceeds Remaining Fair Value 25 Investment ( billion) ( billion) Aging2 70 66 20.4 63 Various 20.0 20 18.819.1…
Can Carlyle sustain returns in the current environment We think so. 16
Buyout Multiples Elevated, But Investing Backdrop Supportive of Activity EBITDA Multiples Current buyout (Buyouts 500 million) multiples supported 12x by historically low 10x 10.2 9.8 9.5 10.2 interest rates 9.19.0 8.88.9…
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…
Carlyle Has Invested More than 10 Billion Over the Past Year Across the Globe Across Many Sectors 12 10.4 0.1 0.1 0.1 10 0.3 0.3 0.3 0.3 0.5 8 0.6 0.7 0.7 6 0.8 1.2 4 4.4 2 0 Infrastructure/Power US Buyout…
Value Creation Largely Through EBITDA Growth, Not Multiple Expansion Equity Total Drivers of Value Creation1 - (% of Value Created) Invested Value Multiple Fund EBITDA Growth Debt Paydown Expansion US Buyout 2 73% 23% 4%…
Can Carlyle grow earnings from here We think so. 21
Carlyle Can Grow Core Earnings Through New Products, Scaling Existing Businesses, and Operating Efficiency New Products & Deals Operating Efficiency Scale Existing Businesses Future State Earnings Higher Earnings Streams…
Diverse Group of Funds Support Accelerating Performance Fees Remaining In Accrued LTM Fair Value Net IRR Carry/ Realized ( mm) 9/30/2014 (Clawback) Carry Carlyle Partners V 12,717 14% Europe Partners III 6,630 13% Carlyle Partners…
As the Number of Funds In Carry Moving Higher 2011 2012 2013 2014 3Q Carlyle Partners IV Carlyle Partners V Carlyle Europe Partners III Corporate Carlyle Asia Partners II () Private Equity Carlyle Asia Partners III Financial…
And More of Carlyles Economic Engines Could Move Towards Carry 1 of fund families generating net realized performance fees (NRPF) expected to increase 25 20 20 15 10 10 5 0 2011 - 2013 Actual Results 2014 - 2016…
Assets Under Management Have Sharply Increased From Three Years Ago AUM ( billion) Carry Funds Hedge Funds Structured Credit1 Solutions 110 16 20 19.3 60 14.7 54.3 104.6 14 16.6 105 12.1 50 16 44.1 12 13.0 100 40 97.3 10 12 95 8…
We Have More Capital At Work and Accrued Carry Despite Realizing over 50 billion in Proceeds for Investors Since 2012 Remaining Fair Value Net Accrued Performance Fees Realized Proceeds ( billion) ( billion) ( billion) 67 2.5 60 66…
Carlyles 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 YTD Claren Road AlpInvest NGP Energy Capital Intl Energy DGAM…
Carlyle Is Delivering Growing Financial Results Through Q3 2014 3.00 Distributable Earnings / Unit1 Distribution Per Unit1 2.50 1.88 2.50 2.00 1.83 1.88 1.46 2.00 1.50 1.50 1.33 1.00 1.00 0.48 0.48 0.50 0.50 0.00 0.00 2012…
Multi-Fund Multi-Discipline Multi-Geography One Culture Global Alternative Asset Management 30
Appendix 31
Corporate Private Equity: Global, Diverse & High Performing Strategy & Returns Assets Under Management Growth Japan Expand position as one of the largest, Buyout 8% most diverse, & consistent performing Other 3% global private…
Corporate Private Equity Financial Data Select Active Fund Level Information Fully/ Cumulative DE1 813 million Partially Inception Committed Invested Fund Invested Date Capital Capital MOIC Gross IRR Net IRR Fee-Related Earnings 1…
CPEs Proven, Disciplined Investment Process Drives Consistent Returns 18 16 150 Deals Median MOIC: 2.3X 14 Average MOIC: 2.8X 12 Gross Profit ( bn) 10 8 6 4 2 0…
Global Market Strategies (GMS) Has Nearly Doubled AUM Since 2010 Strategy & Returns Assets Under Management Seize todays investment opportunities Credit Carlyle GMS Finance Carry Funds Quantitative Strategies Hedge Funds across…
Global Market Strategies Financial Data Segment Composition AUM of DE1 170 million Product Line Strategy (bn) Funds Structured Credit Fee-Related Earnings 1 68 million Structured 17.7 43 Invests in performing broadly syndicated…
Global Market Strategies Offers a Diverse Set of Investment Opportunities (AUM US in bn) Product Team Fund Family Line Strategy Members 3 AUM Funds Structured Credit Structured Credit 1 Leveraged Loans 23 17.7 44 Strategic Partners…
Real Assets Has Significant Real Estate & 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…
Real Assets Financial Data Select Active Fund Level Information DE1 34 million Fully/ Cumulative Partially Inception Committed Invested Gross Fund Invested Date Capital Capital MOIC IRR Net IRR Fee-Related Earnings 1 14 million…
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 & acquisition initiatives Carlyle International Energy…
Global Real Estate Platform Has Financial & Strategic Growth Potential United States Europe Asia Leading platform with Turnaround story Looking to scale vs strong track record opportunity Position Potential for Seventh fund…
Our 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…
Solutions Financial Data Select Business Information DE1 51 million Corporate Private Equity Solutions Fee-Related Earnings 1 36 million One of the largest private of Fund Vehicles 141 equity investors over the past of Investment…
Strong Balance Sheet Key Balance Sheet Items1 ( million) 9/30/2014 Cash & equivalents 1,279 Net accrued performance fees (net of giveback and accrued 1,973 performance fee compensation) Investments attributable to Carlyle…
Key Metrics for The Carlyle Engine Note: segments may not add to total due to rounding; For definitions of the operating metrics above, please see The Carlyle Group LP's filings with the Securities and Exchange Commission. (1) For…
Reconciliation of GAAP to Non-GAAP Financials Quarterly Annual ( millions) 3Q13 4Q13 1Q14 2Q14 3Q14 2010 2011 2012 2013 Income before provision for income taxes (9) 714 472 541 175 1,480 1,183 2,440 1,444 Adjustments: (1) Partner…
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