XML 41 R18.htm IDEA: XBRL DOCUMENT v3.25.0.1
Related Party Transactions
 12 Months Ended
Dec. 31, 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 December 31, 2024 and 2023:
 
As of December 31,
 
2024
2023
 
(Dollars in millions)
Accrued incentive fees
$33.7
$22.9
Unbilled receivable for giveback obligations from current and former employees
11.5
11.5
Notes receivable and accrued interest from affiliates
46.2
44.2
Management fee receivable, net
296.4
277.8
Reimbursable expenses and other receivables from unconsolidated funds and affiliates, net
417.8
335.2
Total
$805.6
$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 December 31, 2024. The accrued and charged interest to the affiliates was not significant for
any period presented.
Notes receivable includes loans that the Company has provided to certain unconsolidated funds to meet short-term
obligations to purchase investments. Notes receivable as of December 31, 2024 and December 31, 2023 also include interest-
bearing loans of $22.8 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% (6.50% as of December 31,
2024) and are collateralized by each borrower’s interest in the Carlyle sponsored funds.
These receivables are assessed regularly for collectability. Management fee receivable amounts determined to be
uncollectible are recorded as a reduction in revenue in the consolidated statements of operations. For all other receivables,
amounts determined to be uncollectible are charged directly to general, administrative and other expenses in the 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 December 31, 2024 and 2023:
 
As of December 31,
 
2024
2023
 
(Dollars in millions)
Due to affiliates of Consolidated Funds
$5.3
$6.3
Due to non-consolidated affiliates
134.1
97.0
Amounts owed under the tax receivable agreement
77.2
79.3
Deferred consideration for Carlyle Holdings units
—
68.4
Other
25.3
24.9
Total
$241.9
$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 received 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
Entities controlled by our co-founders own aircraft that may be used for the Company’s business in the ordinary course
of its operations. The hourly rates that the Company pays for the use of these aircraft are based on current market rates for
chartering private aircraft of the same type. The Company incurred $1.3 million for the use of these aircraft for the year ended
December 31, 2024, all of which was paid directly to the manager of the aircraft and a significant portion of which ultimately
was paid to or for the benefit of certain co-founders.
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 annum 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. The
Company recorded dividend income of $3.5 million during each of the years ended December 31, 2024, 2023 and 2022.
Dividend income from the BDC Preferred Shares is included in interest and other income in the consolidated statements of
operations. The Company’s investment in the BDC Preferred Shares, which is recorded at fair value, was $53.4 million and
$81.7 million as of December 31, 2024 and 2023, respectively, and is included in investments, including accrued performance
allocations, in the 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 $8.87 per share as of December 31, 2024). 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, the Company
reversed $45.5 million of previously recorded unrealized investment income in the second half of 2024. The reversal of
unrealized investment income was based on the net asset value of $16.80 per common share of CSL as of December 31, 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.