Related Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

10. Related Party Transactions

Due from Affiliates and Other Receivables, Net

The Company had the following due from affiliates and other receivables at December 31, 2023 and 2022:

	As of December 31,
	2023	2022
	(Dollars in millions)
Accrued incentive fees	$22.9	$16.4
Unbilled receivable for giveback obligations from current and former employees	11.5	10.4
Notes receivable and accrued interest from affiliates	44.2	41.5
Management fee receivable, net	277.8	220.4
Reimbursable expenses and other receivables from unconsolidated funds and affiliates, net	335.2	290.7
Total	$691.6	$579.4

Reimbursable expenses and other receivables from certain of the unconsolidated funds and portfolio companies relate

to advisory fees receivable and expenses paid on behalf of these entities. These costs generally represent costs related to the

pursuit of actual or proposed investments, professional fees and expenses associated with the acquisition, holding and

disposition of the investments. The affiliates are obligated at the discretion of the Company to reimburse the expenses. Based

on management’s determination, the Company accrues and charges interest on amounts due from affiliate accounts at interest

rates ranging up to 7.02% as of December 31, 2023. The accrued and charged interest to the affiliates was not significant for

any period presented.

Notes receivable include loans that the Company has provided to certain unconsolidated funds to meet short-term

obligations to purchase investments. Notes receivable as of December 31, 2023 and December 31, 2022 also include interest-

bearing loans of $25.0 million and $23.2 million, respectively, to certain eligible Carlyle employees, which excludes Section 16

officers and other members of senior management, to finance their investments in certain Carlyle sponsored funds. These

advances accrue interest at the WSJ Prime Rate minus 1.00% floating with a floor rate of 3.50% (7.50% as of December 31,

2023) and are collateralized by each borrower’s interest in the Carlyle sponsored funds.

These receivables are assessed regularly for collectability. For management fee receivable, amounts determined to be

uncollectible are recorded as a reduction in revenue in the consolidated statements of operations. For all other receivables,

amounts determined to be uncollectible are charged directly to general, administrative and other expenses in the consolidated

statements of operations. A corresponding allowance for doubtful accounts is recorded and such amounts were not significant

for any period presented.

Due to Affiliates

The Company had the following due to affiliates balances at December 31, 2023 and 2022:

	As of December 31,
	2023	2022
	(Dollars in millions)
Due to affiliates of Consolidated Funds	$6.3	$16.4
Due to non-consolidated affiliates	97.0	87.1
Amounts owed under the tax receivable agreement	79.3	100.0
Deferred consideration for Carlyle Holdings units	68.4	134.4
Other	24.9	24.6
Total	$275.9	$362.5

The Company has recorded obligations for amounts due to certain of its affiliates. The Company periodically offsets

expenses it has paid on behalf of its affiliates against these obligations.

Deferred consideration for Carlyle Holdings units relates to the remaining obligation to the holders of Carlyle

Holdings partnership units who will receive cash payments aggregating to $1.50 per Carlyle Holdings partnership unit

exchanged in connection with the Conversion, payable in five annual installments of $0.30. The fifth and final annual

installment payment occurred in January 2024. The obligation was initially recorded at fair value, net of a discount of $11.3

million and measured using Level III inputs in the fair value hierarchy.

In connection with the Company’s initial public offering, the Company entered into a tax receivable agreement with

the limited partners of the Carlyle Holdings partnerships whereby certain subsidiaries of the Partnership agreed to pay to the

limited partners of the Carlyle Holdings partnerships involved in any exchange transaction 85% of the amount of cash tax

savings, if any, in U.S. federal, state and local income tax realized as a result of increases in tax basis resulting from exchanges

of Carlyle Holdings Partnership units for common units of The Carlyle Group L.P.

Other Related Party Transactions

In the normal course of business, the Company has made use of aircraft owned by entities controlled by senior Carlyle

professionals. The senior Carlyle professionals paid for their purchases of the aircraft and bear all operating, personnel and

maintenance costs associated with their operation for personal use. Payment by the Company for the business use of these

aircraft by senior Carlyle professionals and other employees was made at market rates throughout the year based on budgeted

business usage. When actual business use exceeded budgeted aircraft use, the Company made additional payments to the

aircraft owner and/or the aircraft management company, as appropriate. Similarly, when the aggregate amount paid for

budgeted aircraft use exceeded the calculated costs of actual business use, or results in rates which exceed market aircraft

charter rates, the Company receives reimbursement of such excess payments from the aircraft owner and/or the aircraft

management company, as appropriate. These adjustments were calculated annually and payments or reimbursements were

generally made after year-end. During the years ended December 31, 2022 and 2021, the Company made net payments of

$0.7 million and received net reimbursements of $1.1 million, respectively, related to these aircraft lease agreements. The

accrual of aircraft fees was included in general, administrative, and other expenses in the consolidated statements of operations.

During the year ended December 31, 2022, the Company terminated its remaining aircraft lease agreement. As of December 31,

2022, the Company had a reimbursement receivable of $0.4 million related to actual business usage and market rate

adjustments, which was received in January 2023. As of December 31, 2023, the Company had no active aircraft lease

agreements.

On May 5, 2020, the Company purchased 2,000,000 of the BDC Preferred Shares from CSL in a private placement at

a price of $25 per share. Dividends are payable on a quarterly basis in an initial amount equal to 7.0% per annum payable in

cash, or, at CSL’s option, 9.0% per annual payable in additional BDC Preferred Shares. The BDC Preferred Shares are

convertible at the Company’s option, in whole or in part, into the number of shares of common stock equal to $25 per share

plus any accumulated but unpaid dividends divided by an initial conversion price of $9.50 per share, subject to certain

adjustments. Effective May 5, 2023 and with the approval of its board of directors, CSL has the option to redeem the BDC

Preferred Shares, in whole or in part. In such case, the Company has the right to convert its shares, in whole or in part, prior to

the date of redemption. The Company recorded dividend income of $3.5 million and $3.5 million, respectively, during the years

ended December 31, 2023 and 2022. Dividend income from the BDC Preferred Shares is included in interest and other income

in the consolidated statements of operations. The Company’s investment in the BDC Preferred Shares, which is recorded at fair

value, was $81.7 million and $76.9 million as of December 31, 2023 and 2022, respectively, and included in investments,

including accrued performance allocations, in the consolidated balance sheets.

Senior Carlyle professionals and employees are permitted to participate in co-investment entities that invest in Carlyle

funds or alongside Carlyle funds. In many cases, participation is limited by law to individuals who qualify under applicable

legal requirements. These co-investment entities generally do not require senior Carlyle professionals and employees to pay

management or performance allocations, however, Carlyle professionals and employees are required to pay their portion of

partnership expenses.

Carried interest income from certain funds can be distributed to senior Carlyle professionals and employees on a

current basis, but is subject to repayment by the subsidiary of the Company that acts as general partner of the fund in the event

that certain specified return thresholds are not ultimately achieved. The senior Carlyle professionals and certain other

investment professionals have personally guaranteed, subject to certain limitations, the obligation of these subsidiaries in

respect of this general partner obligation. Such guarantees are several and not joint and are limited to a particular individual’s

distributions received.

The Company does business with some of its portfolio companies; all such arrangements are on a negotiated basis.

Substantially all revenue is earned from affiliates of Carlyle.