Investments

6 Months Ended

Jun. 30, 2024

4. Investments

Investments consist of the following:


	As of
	June 30, 2024	December 31, 2023
	(Dollars in millions)
Accrued performance allocations	$5,667.2	$6,169.9
Principal equity method investments, excluding performance allocations	3,179.3	3,024.1
Principal investments in CLOs	494.6	532.6
Other investments	257.3	228.7
Total	$9,598.4	$9,955.3

Accrued Performance Allocations

The components of accrued performance allocations are as follows:


	As of
	June 30, 2024	December 31, 2023
	(Dollars in millions)
Global Private Equity	$3,662.2	$4,310.7
Global Credit	427.8	323.4
Global Investment Solutions	1,577.2	1,535.8
Total	$5,667.2	$6,169.9

None of the Company’s accrued performance allocations from an individual fund exceeded 10% of total accrued

performance allocations at June 30, 2024 and December 31, 2023.

Accrued performance allocations are shown gross of the Company’s accrued performance allocations and incentive fee

related compensation (see Note 7, Accrued Compensation and Benefits), and accrued giveback obligations, which are

separately presented in the condensed consolidated balance sheets. The components of the accrued giveback obligations are as

follows:


	As of
	June 30, 2024	December 31, 2023
	(Dollars in millions)
Global Private Equity	$(18.4)	$(18.4)
Global Credit	(25.5)	(25.6)
Total	$(43.9)	$(44.0)

Principal Equity-Method Investments, Excluding Performance Allocations

The Company’s principal equity method investments (excluding performance allocations) include its fund investments in

Global Private Equity, Global Credit, and Global Investment Solutions typically as general partner interests, and its investments

in Fortitude through a Carlyle-affiliated fund (included within Global Credit) and NGP (included within Global Private Equity),

which are not consolidated. Principal investments are related to the following segments:


	As of
	June 30, 2024	December 31, 2023
	(Dollars in millions)
Global Private Equity(1)	$1,828.6	$1,798.3
Global Credit(2)	1,097.0	987.4
Global Investment Solutions	253.7	238.4
Total	$3,179.3	$3,024.1

(1)The balance includes $909.8 million and $916.2 million as of June 30, 2024 and December 31, 2023, respectively, related to the

Company’s equity method investments in NGP.

(2)The balance includes $720.3 million and $595.4 million as of June 30, 2024 and December 31, 2023, respectively, related to the

Company’s investment in Fortitude.

Investment in Fortitude

On November 13, 2018, the Company acquired a 19.9% interest in Fortitude Group Holdings, LLC (“Fortitude

Holdings”), a wholly owned subsidiary of American International Group, Inc. (“AIG”). Fortitude Holdings owns 100% of the

outstanding common shares of Fortitude Reinsurance Company Ltd., a Bermuda domiciled reinsurer (“Fortitude Re”). The

Company paid $381 million in cash at closing and paid $95 million in additional deferred consideration during the three months

ended March 31, 2024. In May 2020, the initial purchase price was adjusted upward by $99.5 million in accordance with the

purchase agreement as Fortitude Holdings chose not to distribute a planned non-pro rata dividend to AIG, of which the

Company paid $79.6 million in May 2020. The remaining $19.9 million was paid during the three months ended March 31,

2024.

On June 2, 2020, Carlyle FRL, L.P. (“Carlyle FRL”), a Carlyle-affiliated investment fund, and T&D United Capital Co.,

Ltd. (“T&D”), a strategic third-party investor, acquired a 51.6% ownership interest and 25.0% ownership interest, respectively,

in Fortitude Holdings from AIG. At closing, the Company contributed its existing 19.9% interest in Fortitude Holdings to

Carlyle FRL, such that Carlyle FRL held a 71.5% interest in Fortitude Holdings. Taken together, Carlyle FRL and T&D had

96.5% ownership of Fortitude Holdings. In October 2021, Carlyle FRL, T&D and an affiliate of AIG contributed the entirety of

their interest in Fortitude Holdings to FGH Parent, L.P. (“FGH Parent”), a newly-formed entity interposed as the direct parent

of Fortitude Holdings, in exchange for an equivalent ownership interest in FGH Parent. References to “Fortitude” prior to this

restructuring refer to Fortitude Holdings and refer to FGH Parent for subsequent periods.

In March 2022, the Company raised $2.0 billion in third-party equity capital from certain investors in Carlyle FRL and

T&D, and committed $100 million from the Company for additional equity capital in Fortitude. In May 2022, Fortitude called

$1.1 billion of the capital raise, reducing the Company’s indirect ownership of Fortitude from 19.9% to 13.5%. As a result of

the dilution, the Company recorded a reduction in the carrying value of its equity method investment and corresponding loss of

$176.9 million. In May 2023, Fortitude called the remaining $1 billion of the capital commitments and the Company’s indirect

ownership of Fortitude further decreased from 13.5% to 10.5%, resulting in an additional reduction in the carrying value and a

corresponding loss of $104.0 million. Effective October 2023, a third-party investor in Carlyle FRL received a distribution in

kind of its interest in FGH Parent held indirectly through the fund, reducing Carlyle FRL’s ownership in FGH Parent to 38.5%.

Following the additional capital contributions in 2022 and 2023, Carlyle FRL and its strategic third-party investors collectively

hold a 97.5% interest in FGH Parent. As of June 30, 2024, the carrying value of the Company’s investment in Carlyle FRL,

which is an investment company that accounts for its investment in Fortitude at fair value, was $720.3 million, relative to equity

invested of $679.6 million.

The Company has an asset management relationship with Fortitude pursuant to which Fortitude committed to allocate

assets in asset management strategies and vehicles of the Company and its affiliates. As of June 30, 2024, Fortitude, its

affiliates and certain Fortitude reinsurance counterparties have committed approximately $18.6 billion of capital to-date to

various Carlyle strategies. On April 1, 2022, the Company entered into a strategic advisory services agreement with certain

subsidiaries of Fortitude through Carlyle Insurance Solutions Management L.L.C. (“CISM”), an investment adviser. Under the

agreement, CISM provides Fortitude with certain services, including business development and growth, transaction origination

and execution, and capital management services in exchange for a recurring management fee based on Fortitude’s general

account assets, which adjusts within an agreed range based on Fortitude’s overall profitability. Third party investors who

participated in the March 2022 capital raise also made a minority investment in CISM, which is reflected as non-controlling

interest in consolidated entities in the condensed consolidated financial statements.

Investment in NGP

The Company has equity interests in NGP Management Company, L.L.C. (“NGP Management”), the general partners of

certain carry funds advised by NGP, and principal investments in certain NGP funds as described below. The Company does

not control NGP and accounts for its investments in NGP under the equity method of accounting, and includes these

investments in the Global Private Equity segment.

The Company’s investments in NGP as of June 30, 2024 and December 31, 2023 are as follows:


	As of
	June 30, 2024	December 31, 2023
	(Dollars in millions)
Investment in NGP Management	$370.9	$370.5
Investments in NGP general partners - accrued performance allocations	480.6	484.4
Principal investments in NGP funds	58.3	61.3
Total investments in NGP	$909.8	$916.2

Investment in NGP Management. The Company’s equity interests in NGP Management entitle the Company to an

allocation of income equal to 55.0% of the management fee related revenues of NGP Management, which serves as the

investment advisor to the NGP Energy Funds. Management fees are generally calculated as 1.0% to 2.0% of the limited

partners’ commitments during the fund’s investment period, and 0.5% to 2.0% based on the lower of cost or fair market value

of invested capital following the expiration or termination of the investment period. Management fee related revenues from

NGP Management are primarily driven by NGP XI, NGP XII, and NGP XIII during the three and six months ended June 30,

2024 and 2023.

The Company records investment income (loss) for its equity income allocation from NGP management fee related

revenues and also records its share of any allocated expenses from NGP Management, as well as expenses associated with the

compensatory elements of the investment. The net investment income (loss) recognized in the Company’s condensed

consolidated statements of operations for the three and six months ended June 30, 2024 and 2023 were as follows:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(Dollars in millions)
Management fee related revenues from NGP Management	$19.2	$19.8	$36.5	$37.9
Expenses related to the investment in NGP Management	(3.8)	(4.1)	(7.0)	(7.5)
Net investment income from NGP Management	$15.4	$15.7	$29.5	$30.4

The Company assesses the remaining carrying value of its equity method investment for impairment whenever events or

circumstances indicate that the carrying value may not be recoverable, and considers factors including, but not limited to,

expected cash flows from its interest in future management fees and NGP’s ability to raise new funds.

Investment in the General Partners of NGP Carry Funds. The Company’s investment in the general partners of the NGP

Carry Funds entitle it to 47.5% (40.0% or 42.75% in the case of certain funds) of the performance allocations received by

certain current and future NGP fund general partners. The Company records its equity income allocation from NGP

performance allocations in principal investment income (loss) from equity method investments rather than performance

allocations in its condensed consolidated statements of operations. The Company recognized net investment earnings (losses)

related to these performance allocations of $3.0 million and $34.8 million for the three months ended June 30, 2024 and 2023,

respectively, and $18.3 million and $36.5 million for the six months ended June 30, 2024 and 2023, respectively.

Principal Investments in NGP Funds. The Company also holds principal investments in the NGP Carry Funds. The

Company recognized net investment earnings (losses) related to principal investment income (loss) in its condensed

consolidated statements of operations of $0.7 million and $4.0 million for the three months ended June 30, 2024 and 2023,

respectively, and $2.7 million and $3.9 million for the six months ended June 30, 2024 and 2023, respectively.

Principal Investments in CLOs and Other Investments

Principal investments in CLOs as of June 30, 2024 and December 31, 2023 were $494.6 million and $532.6 million,

respectively, and consisted of investments in CLO senior and subordinated notes. A portion of the Company’s principal

investments in CLOs is collateral to CLO term loans (see Note 6, Borrowings). As of June 30, 2024 and December 31, 2023,

other investments include the Company’s investment in the BDC Preferred Shares at fair value of $98.8 million and

$81.7 million, respectively (see Note 9, Related Party Transactions).

Investment Income (Loss)

The components of investment income (loss) are as follows:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(Dollars in millions)
Performance allocations
Realized	$147.9	$386.1	$537.6	$565.7
Unrealized	50.3	(632.9)	(496.4)	(651.7)
	198.2	(246.8)	41.2	(86.0)
Principal investment income (loss) from equity method investments (excluding performance allocations)
Realized	43.7	(34.4)	97.4	4.1
Unrealized	12.8	20.5	6.2	(9.7)
	56.5	(13.9)	103.6	(5.6)
Principal investment income (loss) from investments in CLOs and other investments
Realized	7.0	1.0	9.2	(0.1)
Unrealized(1)	24.6	5.7	48.4	10.2
	31.6	6.7	57.6	10.1
Total	$286.3	$(254.0)	$202.4	$(81.5)

(1)The three and six months ended June 30, 2024 included investment gain of $5.3 million and the six months ended June 30, 2023

included investment loss of $13.3 million associated with the remeasurement of corporate investments, resulting from observable

price changes pursuant to ASC 321, Investments–Equity Securities.

The performance allocations included in revenues are derived from the following segments:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(Dollars in millions)
Global Private Equity	$185.0	$(327.6)	$(178.5)	$(331.4)
Global Credit	46.2	37.7	111.3	71.1
Global Investment Solutions	(33.0)	43.1	108.4	174.3
Total	$198.2	$(246.8)	$41.2	$(86.0)

The following table summarizes the funds that are the primary drivers of performance allocations for the periods

presented and the total revenue recognized, including performance allocations as well as fund management fees and principal

investment income:


Three Months Ended June 30, 2024			Six Months Ended June 30, 2024
(Dollars in millions)			(Dollars in millions)
Global Private Equity	Carlyle Partners VII, L.P	$103.2	Global Private Equity	Carlyle Europe Partners V, L.P.	$(138.4)
Global Private Equity	Carlyle Partners VI, L.P.	(62.1)	Global Private Equity	Carlyle Partners VI, L.P.	(148.7)


Three Months Ended June 30, 2023			Six Months Ended June 30, 2023
(Dollars in millions)			(Dollars in millions)
Global Private Equity	Carlyle Partners VII, L.P.	$(331.7)	Global Private Equity	Carlyle Partners VII, L.P.	$(262.9)
Global Private Equity	Carlyle Asia Partners V, L.P.	(90.4)	Global Private Equity	Carlyle Asia Partners V, L.P.	(101.6)

Carlyle’s income (loss) from its principal equity method investments consists of:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(Dollars in millions)
Global Private Equity	$37.3	$62.8	$66.1	$80.6
Global Credit	19.6	(75.5)	31.0	(94.4)
Global Investment Solutions	(0.4)	(1.2)	6.5	8.2
Total	$56.5	$(13.9)	$103.6	$(5.6)

Principal investment income for Global Private Equity includes the Company’s equity income allocation from NGP

performance allocations of $3.0 million and $34.8 million for the three months ended June 30, 2024 and 2023, respectively, and

$18.3 million and $36.5 million for six months ended June 30, 2024 and 2023, respectively. Principal investment loss for

Global Credit during the three and six months ended June 30, 2023 includes an investment loss of $104.0 million on the

Company’s equity method investment in Carlyle FRL related to the dilution of the Company’s indirect ownership in Fortitude

from 13.5% to 10.5%.

Investments of Consolidated Funds

The Company consolidates the financial positions and results of operations of certain CLOs in which it is the primary

beneficiary. During the six months ended June 30, 2024, the Company formed four new CLOs for which the Company is the

primary beneficiary. Investments in Consolidated Funds as of June 30, 2024 also include $361.5 million related to investments

that have been bridged by the Company to investment funds and are accounted for as consolidated VIEs.

There were no individual investments with a fair value greater than five percent of the Company’s total assets for any

period presented.

Interest and Other Income of Consolidated Funds

The components of interest and other income of Consolidated Funds are as follows:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(Dollars in millions)
Interest income from investments	$149.3	$122.1	$291.9	$231.9
Other income	16.3	15.0	38.6	27.1
Total	$165.6	$137.1	$330.5	$259.0

Net Investment Income (Loss) of Consolidated Funds

Net investment income (loss) of Consolidated Funds includes net realized gains (losses) from sales of investments and

unrealized gains (losses) resulting from changes in fair value of the Consolidated Funds’ investments. The components of Net

investment income (loss) of Consolidated Funds are as follows:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(Dollars in millions)
Gains (losses) from investments of Consolidated Funds	$0.2	$(3.9)	$82.9	$141.1
Gains (losses) from liabilities of CLOs	(5.4)	19.5	(95.1)	(121.9)
Gains on other assets of CLOs	0.1	—	0.1	—
Total	$(5.1)	$15.6	$(12.1)	$19.2

The following table presents realized and unrealized gains (losses) earned from investments of the Consolidated Funds:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(Dollars in millions)
Realized losses	$(23.4)	$(21.5)	$(44.6)	$(38.9)
Net change in unrealized gains	23.6	17.6	127.5	180.0
Total	$0.2	$(3.9)	$82.9	$141.1