The Carlyle Group Inc.

Good day and thank you for standing by. Welcome to the Carlyle Group second quarter 2025 earnings 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 a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today. Daniel Harris, head of investor relations. Please go ahead.

Thank you, Kevin. Good morning and welcome to Carlyle's second quarter 2025 earnings call. With me on the call this morning is our chief executive officer, Harvey Schwartz, and chief financial officer and head of corporate strategy, John Redet. Earlier this morning, we issued a press release and a detailed earnings presentation, which is available on our investor relations website. This call is being webcast and a replay will be available. We will refer to certain non-GAAP financial 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 have 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. Carl assumes no obligation to update any forward-looking statements at any time. In order to ensure participation by all those on the call today, please limit yourself to one question and return to the queue for any additional follow-ups. 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. We delivered an exceptionally strong second quarter. Our performance marks significant progress against our strategic plan and underscores once again, the momentum we have globally. We set a number of new record highs. FRE was a record 323 million, up 18% year over year. FRE margin for the first half was also a record 48%. And we hit record AUM of 465 billion. It's also worth noting at 886 million, This is the highest level of first half DE the firm has ever had. We also brought in $51 billion of organic inflows over the past 12 months. This is a clear sign of continued confidence from our investors and is reflective of the diversified nature of our global investment platform. Before I dive into more specifics of the quarter, I'd like to address the macro environment. As we progress through the second quarter and into the summer, sentiment has continued to pick up meaningfully. Markets are functioning quite well and activity has accelerated. Equities are near record highs and credit spreads are also near record high levels. Markets have responded quite well to progress by the administration on tariff negotiations and tax policy. This has reduced uncertainty and an accelerating M&A and deal activity. As we all know, confidence is the greatest market elixir. And with this increase in confidence, we're seeing continued demand for private capital. We're investing where we have strong convention and see relative value while maintaining our disciplined approach to how we price risk. Across the firm, we deployed $26 billion in the first half of 2025. This is up almost 50% year over year. I would also like to highlight how much capital we're returning to investors. Firm-wide realized proceeds are up nearly 40% year over year. While the corporate private equity market broadly has faced criticism for low levels of capital return to investors, we've defied that trend. We returned almost $15 billion to investors over the last 12 months. This represented 17% of our portfolio and is three times the industry average. And again, this is just through the second quarter, which doesn't include significant post-quarter activity already announced. This is a really impressive achievement for our teams and fantastic for our investors. It highlights the strength of the portfolio and differentiates us in the marketplace compared to other firms. And trends and performance also continue to be quite positive. Our two most recent U.S. buyout funds appreciated approximately 20% over the past 12 months. In Asia, funds one through four each rank in the top 5% for performance in their respective categories, and our fifth fund appreciated 8% this quarter alone. We've also had distinctive performance versus the market in other parts of our business. Amid one of the most difficult fundraising environments for real estate in recent memory, this week we announced the final close of our 10th U.S. fund at $9 billion. That's nearly 15% larger than the predecessor fund. This achievement is worth underscoring given the team's standout performance versus the industry in a difficult real estate investment background. This marks the largest U.S. real estate fund raised across the industry in the past 18 months, a real reflection of the performance excellence of our team and the power of our global brand. Over in global credit, we hit key milestones across multiple parts of the platform. An asset-backed finance, a key area of growth for Carlyle, we see lots of momentum. This quarter, we announced the first of its kind collaboration with Citigroup in a FinTech specialty lending space. We also entered into a new strategic origination partnership, bringing us to six platform partnerships that collectively enhance our differentiated origination capabilities. Asset-based finance AUM is up 40% year-over-year and continues to scale rapidly. And in our opportunistic credit business, we provided a landmark hybrid capital solution to Tracordia, the leading insurance broker. More broadly, global insurers continue to represent an important and growing client base for Carlyle. We continue to see strong demand for capital and liquidity solutions for insurers through Fortitude RE, which closed on $8 billion of reinsurance contracts in July. We also continue to be a compelling partner to third-party insurance clients globally, providing access to a diverse range of investment opportunities, particularly as interest in private investment-grade solutions accelerates. This enables us to work with the full spectrum of insurance clients while benefiting from the growth of our partner, Fortitude Ready. Moving on to Carlisle Alpha Invest, the business had a record quarter with fee revenues up more than 50% and FRE nearly doubling over the past year. Secondaries continue to be a major growth engine and our latest fund currently in market is already significantly larger than the prior vintage. The secondaries co-invest in portfolio finance business provides us with unique content and a competitive advantage as market dynamics shift and liquidity needs evolve. Our expertise, combined with the scale of our global platform, puts us in a strong position as secondaries and portfolio finance markets continue to grow. Turning to global wealth, we've seen the assets in CAPM increase nearly six-fold over the last year. CAPM provides diversified exposure across our Apollo Alpha Invest investment strategies. There are a number of reasons advisors and investors have interest in this solution, including the speed of deployment, liquidity, diversification benefits, and of course, a long history of outstanding investment performance. This is an extraordinary solution for our wealth clients. Last month, we launched a partnership with UBS where we are the only private equity secondary solution for their international wealth clients. We're thrilled to partner with them, and the early response has been fantastic. UBS is one of the leading global wealth management platforms, and we expect this partnership to be a strong driver of growth. In aggregate, we now have almost 30 billion AUM of perpetual evergreen strategies, up nearly 40% year over year. Lastly, we continue to gain momentum in our capital markets business, another important strategic initiative for the firm. Over the last 12 months, we generated over $230 million in capital markets fees, and we see further upside to this level as M&A and IPO market activity increases. To wrap things up, obviously we've seen tremendous growth and momentum over the last year. As we look ahead to our next phase of growth, we announced a series of leadership appointments last week, including naming John Rudette, Mark Jenkins, and Jeff Nettleman as co-presidents, and appointing Justin Bluff as our new CFO. These appointments are a natural evolution of our business, and solidify our ability to operate at scale with the focus, alignment, and agility required to lead in today's environment. I look forward to partnering closely with these leaders as we execute our strategy and deliver significant value to our investors and stakeholders around the world. With that, let me turn things over to John.