The Carlyle Group Inc.

Good morning and welcome to the Carlisle Group's fourth quarter 2023 earnings call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this call is being recorded. I would like to hand the call over to Daniel Harris, head of public investor relations. You may begin.

Thank you, operator. Good morning and welcome to Carlisle's fourth quarter and full year 2023 earnings call. With me on the call this morning is our Chief Executive Officer, Harvey Schwartz, and our Chief Financial Officer, John Redet. Earlier this morning, we issued a press release and a detailed earnings presentation, which is also available on our investor relations website. This call is being webcast and a replay will be available. We will refer to certain non-GAAP financials 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've 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 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. In order to ensure participation by all those on the line today, please limit yourself to one question and then return to the queue for any additional follow-ups. In our earnings presentation this quarter, you'll find several additional pages in the front of the release, starting with page six, that Harvey and John will refer to during our remarks. As I mentioned, you can find the presentation on our IR website to follow along. With that, let me turn the call over to our Chief Executive Officer, Harvey Schwartz.

Thanks, Dan. Good morning, everyone, and thank you for joining us. Our firm finished 2023 with significant momentum. We set several records last year, which you see on page six. They include record FRE at $859 million, record Q4 FRE margin at 43%, and we finished the year with record AUM at $426 billion. We also raised $17 billion of capital in the fourth quarter, our third largest fundraising quarter in the history of the firm. We want to thank our investing clients for the trust they put in us as their fiduciary and the entire Carlyle team for their hard work. Again, we finished the year with significant momentum which sets us up for success in 2024. Now please turn to page seven in the document. In today's discussion, John and I are going to focus on four key areas. First, enhancing stakeholder alignment and changes we plan to make to our compensation model. Second, optimizing capital and our approach to returning capital to shareholders. Third, strategic initiatives in 2024. And lastly, we will delineate explicit financial targets for 2024. Now turning to page eight, enhancing stakeholder alignment. Today we're announcing a shift in our compensation strategy explicitly designed to enhance alignment across all of our stakeholders, our investing clients, our employees, and you, our shareholders. Carlyle has a performance driven culture and our senior investing professionals want their compensation more tightly tied to performance. Shareholders also get more of what they value most, A significant step up in steady recurring fee-related earnings and FRE margin. And our investing clients also benefit from our teams having more skin in the game. It is a win-win-win for each of our stakeholders, our investing clients, our senior employees, and our shareholders. Second, I'd like to discuss changes to our capital allocation strategy. Please turn to slide nine. We've increased our share repurchase capacity by an incremental $1 billion for a total of $1.4 billion. Given our strong balance sheet and positive outlook, this incremental capacity provides us flexibility to return excess capital to shareholders. At this share price, our board and senior leadership see tremendous value in the enterprise. The opportunity to return capital to shareholders is clearly quite compelling. Java Walkthrough are thinking about capital management and our approach in more detail. Now moving to page 10, I want to touch on several strategic initiatives. Global credit and insurance is positioned for strong growth. Global credit is now our largest segment with almost 190 billion of AUM. We have driven a nearly 300% increase in credit AUM over the past four years. In insurance, We added 29 billion AUM in 2023 from Fortitude, including the Lincoln Financial Transaction. We have strong momentum coming into 2024 and a deep pipeline of growth opportunities. In investment solutions, we also have great operating momentum. We've grown AUM 70% over the past four years to $77 billion. Our secondaries and co-investment strategies are producing attractive returns for their investors and are well positioned to capture opportunities in the current environment. Global investment solutions should see FRE shift sharply higher in 2024 as the effect of strong fundraising impacts our results. We've also made progress growing our wealth strategy. The Carlyle brand is a unique and powerful asset. Since inception, we've raised nearly $50 billion of wealth assets. We are incredibly appreciative of the trust that our wealth management partners have placed in us on behalf of their clients. We look forward to continue to work with them as we grow this business together. We are excited to have our credit interval fund, CTAC, and our PE secondaries fund, CAPM, in the market today. And we will have a PE product in the market in the next several quarters. Now switching to expense management, while we focus on growth, We are also keeping a careful eye on expenses. In 2023, we grew headcount as we continue to invest across our platform. At the same time, we delivered expense savings in other areas. Again, while growth remains our key area of focus, executing our strategy in a disciplined manner will allow us to expand margins at the same time. Before I pass it to John, turning to page 11, let me give you a quick preview on our 2024 financial targets. We are targeting FRE of $1.1 billion. We are targeting FRE margins to increase to a range of 40 to 50%. We are targeting inflows to exceed $40 billion in 2024. And again, we have significantly increased our ability to return capital to shareholders by expanding the share buyback capacity. Again, we intend to be active buyers of our stock as we see strong value in returning capital to you, our shareholders. We begin 2024 with clear momentum. And with that, let me now turn the call over to John. Thanks, Harvey.