The Carlyle Group Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Carlyle Group first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star then one on your telephone. If you require any further assistance, please press star then zero. I would now like to turn the conference over to your speaker for today, Daniel Herz, Head of Investor Relations. You may begin.

Thank you, Tawanda. Good morning and welcome to Carlyle's first quarter 2022 earnings call. With me on the call this morning is our Chief Executive Officer, Kyu Song Lee, and our Chief Financial Officer, Kurt Buser. Earlier this morning, we issued a press release and detailed earnings presentation, both of which are available on our investor relations website at ir.carlyle.com. This call is being webcast and a replay will be available on our website. We will refer to certain non-GAAP financial measures during today's call. Thank you for joining us. including those identified in the risk factor section of our annual report on Form 10-K that could cause actual results to differ materially from those indicated. Carlisle assumes no obligation to update any forward-looking statements at any time. Turning to our results, for the first quarter we generated $183 million in fee-related earnings and $303 million in distributable earnings with DE per common share of 74 cents. We produced net realized performance revenues of $118 million and grew our accrued carry balance to $4.3 billion. We declared a quarterly dividend of 32.5 cents per common share. To ensure participation by all those on the call this morning, please limit yourself to one question and then return to the queue for any additional follow-ups. With that, let me turn the call over to our Chief Executive Officer, Kyu Sung Lee.

Thanks, Dan. Hello, everyone, and thank you for joining us today. We're accelerating Carlyle's growth by diversifying our global business and running the firm better than ever before to drive long-term shareholder value. This strategy helped us continue to deliver for our shareholders and investors in the first quarter. Our FRE grew over 40% compared to the first quarter last year. Our leading investment platform demonstrated continued excellence as witnessed by record accrued carry balances. and we are increasingly diversified as over two-thirds of our total AOM is away from corporate private equity. We are pleased with our progress and we will continue to pursue organic and inorganic opportunities to drive further growth and diversification while maintaining investment excellence and business discipline as we navigate market and geopolitical uncertainty. Thank you for joining us. Having said this, there are major paradigm shifts occurring which are driving complexities and volatility in the investment environment. But Carlyle continues to perform. And importantly, our focus on thoughtful portfolio construction over the years is paying off this quarter. Our aggregate investment portfolio appreciated 5%, led by a 7% increase in global private equity, while public markets were down approximately 5%. We saw particular strength in our real estate platform with 10% appreciation and our infrastructure and natural resources platform with 19% appreciation. These were the major drivers of our net accrued performance revenue balance growing to $4.3 billion, a record level for our firm. Our credit strategies are also performing well. Our direct lending strategies are currently yielding approximately 9%. and the portfolios in our market-leading CLO business continue to have a default rate less than half the industry average. This broad-based performance across all asset classes is a testament to the value of our diversified global platform, time-tested investment approach and world-class teams. The private markets continue to outperform public markets over the long term and our portfolios are well-positioned for the current market environment. Turning to our growth and strategic plan to drive shareholder value, we're executing on what we told you and pleased with our progress. In the first quarter, we generated a record of $183 million of FRE, up 42% over the first quarter last year. This reflects the organic growth in our business over the past year and, importantly, does not yet capture the impact from several strategic growth transactions we recently announced. To that end, we are also pursuing growth by repurposing balance sheet capital for strategic inorganic opportunities. On last quarter's call, we told you 2022 was going to be a breakout year for credit and insurance, two key areas identified for growth as part of our strategic plan. And we are already delivering on that. We're continuing to scale our global credit platform with FRE accretive acquisitions as evidenced by our recent ISTAR and CBAM transactions. And we also saw major milestones in insurance solutions with our $2 billion capital raise and creation of a new strategic advisory services agreement with Fortitude. Our strategy in this area is differentiated, providing a real engine for growth and alignment for all stakeholders. This new agreement better aligns Carlyle's financial growth with the strategic interests of Fortitude and has significant and immediate impacts to our FRE and total AUM, which on a pro forma basis for this agreement is now approximately $375 billion. Keep in mind, with this new advisory relationship, we have a fee stream which is more perpetual in nature and will grow as Fortitude continues to scale. Turning to fundraising, which continues to fuel our growth. In the first quarter, we raised more than $9 billion. Changing dynamics mostly related to a crowded private equity fundraising marketplace is affecting the timing of some of our private equity funds in the market. But the breadth of our platform and the strength of our brand and LP partnerships remains a differentiator for Carlyle. We continue to benefit from our diversification beyond traditional private equity as demonstrated by our second Credit Opportunities Fund, which recently had a final close at $4.6 billion, almost twice as large as its predecessor fund, as well as increasing traction within our infrastructure and renewable strategy. We have also added and launched additional products in global credit and global investment solutions to meet the rising demands of investors for these asset strategies. Putting it all together, I want to underscore the real magnitude of the acceleration in FRE that we've delivered by executing against our strategy. In 2017, we delivered approximately 190 million in FRE. Last year, we reported almost 600 million. That is more than tripling our FRE in just four years. And now, we said we expect to deliver $850 million in FRE for 2022, which is 40% projected growth year over year. If we achieve that, we will have grown FRE by more than four times in just five years. That is significant value creation for our shareholders. I'll end today with this. We are transforming Carlyle into a more diversified global investment firm, helping us capture growth and expanding strategic areas like global credit, infrastructure and renewables, insurance, and global investment solutions. And we are doing this while building our powerful private equity business. We feel confident in our strategic plan and our ability to drive future FRE growth. Our leadership team is focused on managing through the complexities presented by the current market and geopolitical landscape, and I'd be remiss if I didn't continue to stress that this complexity and volatility also creates opportunity. We have built an increasingly diversified business mix that positions us well to continue capturing opportunities across the expanding private markets and to perform across cycles for all of our stakeholders. With that, I'll turn it over to you, Kirk.