XML 30 R11.htm IDEA: XBRL DOCUMENT
v3.24.1.u1

Investments | 3 Months Ended
--- | ---
Mar. 31, 2024
Investments [Abstract] |
Investments | 4. Investments In vestments consist of the following:
| As of
| March 31, 2024 |  | December 31, 2023
| (Dollars in millions)
Accrued performance allocations | $5,567.6 |  | $6,169.9
Principal equity method investments, excluding performance allocations | 3,145.4 |  | 3,024.1
Principal investments in CLOs | 520.8 |  | 532.6
Other investments | 239.4 |  | 228.7
Total | $9,473.2 |  | $9,955.3
Accrued Performance Allocations The components of accrued performance allocations are as follows:
| As of
| March 31, 2024 |  | December 31, 2023
| (Dollars in millions)
Global Private Equity | $3,547.7 |  | $4,310.7
Global Credit | 381.6 |  | 323.4
Global Investment Solutions | 1,638.3 |  | 1,535.8
Total | $5,567.6 |  | $6,169.9
None of the Company’s accrued performance allocations from an individual fund exceeded 10% of total accrued performance allocations at March 31, 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
| March 31, 2024 |  | December 31, 2023
| (Dollars in millions)
Global Private Equity | $(18.4) |  | $(18.4)
Global Credit | (25.6) |  | (25.6)
Total | $(44.0) |  | $(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
| March 31, 2024 |  | December 31, 2023
| (Dollars in millions)
Global Private Equity(1) | $1,781.1 |  | $1,798.3
Global Credit(2) | 1,114.8 |  | 987.4
Global Investment Solutions | 249.5 |  | 238.4
Total | $3,145.4 |  | $3,024.1
(1)The balance includes $918.0 million and $916.2 million as of March 31, 2024 and December 31, 2023, respectively, related to the Company’s equity method investments in NGP. (2)As of March 31, 2024 and December 31, 2023, the balance includes $709.3 million and $595.4 million, 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 t h e 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 March 31, 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 $709.3 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 March 31, 2024, Fortitude, its affiliates and certain Fortitude reinsurance counterparties have committed approximately $17.9 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 Fortitu de’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 a 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 March 31, 2024 and December 31, 2023 are as follows:
| As of
| March 31, 2024 |  | December 31, 2023
| (Dollars in millions)
Investment in NGP Management | $369.3 |  | $370.5
Investments in NGP general partners - accrued performance allocations | 488.4 |  | 484.4
Principal investments in NGP funds | 60.3 |  | 61.3
Total investments in NGP | $918.0 |  | $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 XII and NGP XI during the three months ended March 31, 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 months ended March 31, 2024 and 2023 were as follows:
| Three Months Ended March 31,
| 2024 |  | 2023
(Dollars in millions) |
Management fee related revenues from NGP Management | $17.3 |  | $18.1
Expenses related to the investment in NGP Management | (3.2) |  | (3.4)
Net investment income from NGP Management | $14.1 |  | $14.7
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 $15.3 million and $1.7 million of net investment earnings (losses) related to these performance allocations for the three months ended March 31, 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 $2.0 million and $(0.1) million for the three months ended March 31, 2024 and 2023, respectively. Principal Investments in CLOs and Other Investments Principal investments in CLOs as of March 31, 2024 and December 31, 2023 were $520.8 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 March 31, 2024 and December 31, 2023, other investments include the Company’s investment in the BDC Preferred Shares at fair value of $90.1 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 March 31,
| 2024 |  | 2023
(Dollars in millions) |
Performance allocations |  |  |
Realized | $389.7 |  | $179.6
Unrealized | (546.7) |  | (18.8)
| (157.0) |  | 160.8
Principal investment income (loss) from equity method investments (excluding performance allocations) |  |  |
Realized | 53.7 |  | 38.5
Unrealized | (6.6) |  | (30.2)
| 47.1 |  | 8.3
Principal investment income (loss) from investments in CLOs and other investments |  |  |
Realized | 2.2 |  | (1.1)
Unrealized(1) | 23.8 |  | 4.5
| 26.0 |  | 3.4
Total | $(83.9) |  | $172.5
(1)The three months ended March 31, 2023 included investment loss of $13.3 million associated with the remeasurement of a corporate investment, 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 March 31,
| 2024 |  | 2023
(Dollars in millions) |
Global Private Equity | $(363.5) |  | $(3.8)
Global Credit | 65.1 |  | 33.4
Global Investment Solutions | 141.4 |  | 131.2
Total | $(157.0) |  | $160.8
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 March 31, 2024
(Dollars in millions)
Global Private Equity | Carlyle Europe Partners V, L.P. | $(171.5)
Global Private Equity | Carlyle Partners VI, L.P. | (86.7)
Global Private Equity | Carlyle Partners VII, L.P. | (73.1)
Three Months Ended March 31, 2023
(Dollars in millions)
Global Private Equity | Carlyle Partners VI, L.P. | $(74.4)
Carlyle’s income (loss) from its principal equity method investments consists of:
| Three Months Ended March 31,
| 2024 |  | 2023
(Dollars in millions) |
Global Private Equity | $28.8 |  | $17.8
Global Credit | 11.4 |  | (18.9)
Global Investment Solutions | 6.9 |  | 9.4
Total | $47.1 |  | $8.3
Principal investment income for Global Private Equity includes the Company’s equity income allocation from NGP performance allocations of $15.3 million and $1.7 million for three months ended March 31, 2024 and 2023, respectively. 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 three months ended March 31, 2024, the Company did not form any new CLOs for which the Company is the primary beneficiary. Investments in Consolidated Funds as of March 31, 2024 also include $332.1 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 March 31,
| 2024 |  | 2023
(Dollars in millions) |
Interest income from investments | $142.6 |  | $109.8
Other income | 22.3 |  | 12.1
Total | $164.9 |  | $121.9
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 March 31,
| 2024 |  | 2023
(Dollars in millions) |
Gains from investments of Consolidated Funds | $82.7 |  | $145.0
Losses from liabilities of CLOs | (89.7) |  | (141.4)
Total | $(7.0) |  | $3.6
The following table presents realized and unrealized gains (losses) earned from investments of the Consolidated Funds:
| Three Months Ended March 31,
| 2024 |  | 2023
(Dollars in millions) |
Realized losses | $(21.2) |  | $(17.4)
Net change in unrealized gains | 103.9 |  | 162.4
Total | $82.7 |  | $145.0

X
- Definition The entire disclosure for investment. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//320/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Name Accounting Standards Codification -Topic 321 -Publisher FASB -URI https://asc.fasb.org//321/tableOfContent Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef -Name Accounting Standards Codification -Topic 325 -Publisher FASB -URI https://asc.fasb.org//325/tableOfContent + Details
Name: | us-gaap_InvestmentTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration