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Related Party Transactions
 6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
Related Party Transactions 9. Related Party Transactions
Due from Affiliates and Other Receivables, Net
The Company had the following due from affiliates and other receivables at June 30, 2024 and December 31, 2023: 
 
As of
 
June 30,
2024
December 31,
2023
 
(Dollars in millions)
Accrued incentive fees
$25.9
$22.9
Unbilled receivable for giveback obligations from current and former employees
11.5
11.5
Notes receivable and accrued interest from affiliates
37.5
44.2
Management fee receivable, net
303.1
277.8
Reimbursable expenses and other receivables from unconsolidated funds and affiliates, net
337.4
335.2
Total
$715.4
$691.6
Reimbursable expenses and other receivables from certain of the unconsolidated funds and portfolio companies relate to
advisory fees receivable and expenses paid on behalf of these entities. These costs generally represent costs related to the
pursuit of actual or proposed investments, professional fees and expenses associated with the acquisition, holding and
disposition of the investments. The affiliates are obligated at the discretion of the Company to reimburse the expenses. Based
on management’s determination, the Company accrues and charges interest on amounts due from affiliate accounts at interest
rates ranging up to 7.02% as of June 30, 2024. The accrued and charged interest to the affiliates was not significant for any
period presented.
Notes receivable include loans that the Company has provided to certain unconsolidated funds to meet short-term
obligations to purchase investments. Notes receivable as of June 30, 2024 and December 31, 2023 also include interest-bearing
loans of $22.2 million and $25.0 million, respectively, to certain eligible Carlyle employees, which excludes Section 16 officers
and other members of senior management, to finance their investments in certain Carlyle sponsored funds. These advances
accrue interest at the WSJ Prime Rate minus 1.00% floating with a floor rate of 3.50% (7.50% as of June 30, 2024) and are
collateralized by each borrower’s interest in the Carlyle sponsored funds.
These receivables are assessed regularly for collectability. For management fee receivable, amounts determined to be
uncollectible are recorded as a reduction in revenue in the condensed consolidated statements of operations. For all other
receivables, amounts determined to be uncollectible are charged directly to general, administrative and other expenses in the
condensed consolidated statements of operations. A corresponding allowance for doubtful accounts is recorded and such
amounts were not significant for any period presented.
Due to Affiliates
The Company had the following due to affiliates balances at June 30, 2024 and December 31, 2023: 
 
As of
 
June 30,
2024
December 31,
2023
 
(Dollars in millions)
Due to affiliates of Consolidated Funds
$5.4
$6.3
Due to non-consolidated affiliates
102.4
97.0
Amounts owed under the tax receivable agreement
76.2
79.3
Deferred consideration for Carlyle Holdings units
—
68.4
Other
29.5
24.9
Total
$213.5
$275.9
The Company has recorded obligations for amounts due to certain of its affiliates. The Company periodically offsets
expenses it has paid on behalf of its affiliates against these obligations.
Deferred consideration for Carlyle Holdings units relates to the remaining obligation to the holders of Carlyle Holdings
partnership units who will receive cash payments aggregating to $1.50 per Carlyle Holdings partnership unit exchanged in
connection with the Conversion, payable in five annual installments of $0.30. The fifth and final annual installment payment
occurred in January 2024. The obligation was initially recorded at fair value, net of a discount of $11.3 million and measured
using Level III inputs in the fair value hierarchy.
In connection with the Company’s initial public offering, the Company entered into a tax receivable agreement with the
limited partners of the Carlyle Holdings partnerships whereby certain subsidiaries of the Partnership agreed to pay to the limited
partners of the Carlyle Holdings partnerships involved in any exchange transaction 85% of the amount of cash tax savings, if
any, in U.S. federal, state and local income tax realized as a result of increases in tax basis resulting from exchanges of Carlyle
Holdings Partnership units for common units of The Carlyle Group L.P.
Other Related Party Transactions
On May 5, 2020, the Company purchased 2,000,000 of the BDC Preferred Shares from CSL in a private placement at a
price of $25 per share. Dividends are payable on a quarterly basis in an initial amount equal to 7.0% per annum payable in cash,
or, at CSL’s option, 9.0% per annual payable in additional BDC Preferred Shares. The BDC Preferred Shares are convertible at
the Company’s option, in whole or in part, into the number of shares of common stock equal to $25 per share plus any
accumulated but unpaid dividends divided by an initial conversion price of $9.50 per share, subject to certain adjustments. With
the approval of its board of directors, CSL has the option to redeem the BDC Preferred Shares, in whole or in part. In such case,
the Company has the right to convert its shares, in whole or in part, prior to the date of redemption. For both the three months
ended June 30, 2024 and 2023, the Company recorded dividend income of $0.9 million. For both the six months ended June 30,
2024 and 2023, the Company recorded dividend income of $1.8 million. Dividend income from the BDC Preferred Shares is
included in interest and other income in the condensed consolidated statements of operations. The Company’s investment in the
BDC Preferred Shares, which is recorded at fair value, was $98.8 million and $81.7 million as of June 30, 2024 and
December 31, 2023, respectively, and is included in investments, including accrued performance allocations, in the condensed
consolidated balance sheets. In August 2024, to facilitate a proposed merger between CSL and another Carlyle-advised BDC,
the Company agreed to exchange its 2,000,000 preferred shares into newly issued common shares of CSL at a price equal to the
net asset value per common share on the date of completion of a proposed merger (compared to a current conversion price of
$8.98 per share). The merger is subject to CSL stockholder approvals, customary regulatory approvals and other closing
conditions. Assuming satisfaction of those conditions, the merger of the BDCs and the exchange of the preferred shares are
expected to close in 2025. As a result of the agreement, during the three months ended September 30, 2024, the Company
expects to reverse approximately $45 million of previously recorded unrealized investment income based on the net asset value
of CSL as of June 30, 2024. The ultimate amount of unrealized investment income to be reversed will be determined based on
the net asset value per common share of CSL as of the closing date of the merger.
Senior Carlyle professionals and employees are permitted to participate in co-investment entities that invest in Carlyle
funds or alongside Carlyle funds. In many cases, participation is limited by law to individuals who qualify under applicable
legal requirements. These co-investment entities generally do not require senior Carlyle professionals and employees to pay
management or performance allocations, however, Carlyle professionals and employees are required to pay their portion of
partnership expenses.
Carried interest income from certain funds can be distributed to senior Carlyle professionals and employees on a current
basis, but is subject to repayment by the subsidiary of the Company that acts as general partner of the fund in the event that
certain specified return thresholds are not ultimately achieved. The senior Carlyle professionals and certain other investment
professionals have personally guaranteed, subject to certain limitations, the obligation of these subsidiaries in respect of this
general partner obligation. Such guarantees are several and not joint and are limited to a particular individual’s distributions
received.
The Company does business with some of its portfolio companies; all such arrangements are on a negotiated basis.
Substantially all revenue is earned from affiliates of Carlyle.