The following discussion analyzes the financial condition and results of
operations of The Carlyle Group Inc. (the "Company"). Such analysis should be
read in conjunction with the consolidated financial statements and the related
notes included in this Quarterly Report on Form 10-Q and the Annual Report on
Form 10-K for the year ended December 31, 2021.


We operate through three reportable segments: Global Private Equity, Global Credit and Global Investment Solutions.

•Global Private Equity - Our Global Private Equity segment advises our buyout,
middle market and growth capital funds, our U.S. and internationally focused
real estate funds, our infrastructure and natural resources funds, and our
Legacy Energy funds (as defined below). The segment also includes the NGP
Predecessor Funds and NGP Carry Funds advised by NGP. As of March 31, 2022, our
Global Private Equity segment had $169 billion in AUM and $107 billion in
Fee-earning AUM.

•Global Credit - Our Global Credit segment advises funds and vehicles that
pursue investment strategies including loans and structured credit, direct
lending, opportunistic credit, distressed credit, aircraft financing and
servicing, infrastructure debt, insurance solutions and global capital markets.
As of March 31, 2022, our Global Credit segment had $91 billion in AUM and $67
billion in Fee-earning AUM.

•Global Investment Solutions - Our Global Investment Solutions segment advises
fund of funds programs and related co-investment and secondary activities. As of
March 31, 2022, our Global Investment Solutions segment had $65 billion in AUM
and $37 billion in Fee-earning AUM. Our Investment Solutions segment also
included Metropolitan Real Estate ("MRE") prior to its sale on April 1, 2021.

We earn management fees pursuant to contractual arrangements with the investment
funds that we manage and fees for transaction advisory and oversight services
provided to portfolio companies of these funds. We also typically receive a
performance fee from an investment fund, which may be either an incentive fee or
a special residual allocation of income, which we refer to as a performance
allocation, or carried interest, in the event that specified investment returns
are achieved by the fund. Under U.S. generally accepted accounting principles
("U.S. GAAP"), we are required to consolidate some of the investment funds that
we advise. However, for segment reporting purposes, we present revenues and
expenses on a basis that deconsolidates these investment funds. Accordingly, our
segment revenues primarily consist of fund management and related transaction
and portfolio advisory fees and other income, realized performance revenues
(consisting of incentive fees and performance allocations), realized principal
investment income, including realized gains on our investments in our funds and
other trading securities, as well as interest income. Our segment expenses
primarily consist of cash compensation and benefits expenses, including
salaries, bonuses, and realized performance payment arrangements, and general
and administrative expenses. While our segment expenses include depreciation and
interest expense, our segment expenses exclude acquisition and disposition
related charges and amortization of intangibles and impairment. Refer to Note 17
to the unaudited condensed consolidated financial statements included in this
Quarterly Report on Form 10-Q for more information on the differences between
our financial results reported pursuant to U.S. GAAP and our financial results
for segment reporting purposes.

Our family of funds

The following chart presents the name (acronym), total capital commitments (in
the case of our carry funds, structured credit funds, and the NGP Predecessor
Funds), assets under management (open-end products and non-carry Aviation
vehicles), gross assets (in the case of our BDCs) and vintage year of the active
funds in each of our segments, as of March 31, 2022. We present total capital
commitments (as opposed to assets under management) for our closed-end
investment funds because we believe this metric provides the most useful
information regarding the relative size and scale of such funds. In the case of
our products which are open-ended and accordingly do not have committed capital,
we generally believe the most useful metric regarding relative size and scale is
assets under management.

                                    Global Private Equity1                                                                 Global Credit
             Corporate Private Equity                         Real Estate Carry Funds                                      Liquid Credit
              Carlyle Partners (U.S.)                     Carlyle Realty
Partners (U.S.)                                     Cash CLOs
             CP VIII         $11.5 bn     2021              CRP IX        $8.0 bn     2021                                 U.S.         $37.6 bn   2012-2021
              CP VII         $18.5 bn     2018            CRP VIII        $5.5 bn     2017                               Europe         €10.1 bn   2013-2022
               CP VI         $13.0 bn     2014             CRP VII        $4.2 bn     2014                            Structured Credit Funds
                CP V         $13.7 bn     2007              CRP VI        $2.3 bn     2011                                 CREV          $0.5 bn     2020
        Global Financial Services Partners                   CRP V       
$3.0 bn     2006                                  CSC          $0.8 bn     2017
           CGFSP III          $1.0 bn     2018              CRP IV        $1.0 bn     2005                                Illiquid Credit
            CGFSP II          $1.0 bn     2013             Core Plus Real Estate (U.S.)                           Business Development Companies3
                                                                                                        Carlyle Secured Lending
              Carlyle Europe Partners                         CPI4        $7.9 bn     2016                                  III          $0.2 bn     2022
               CEP V          €6.4 bn     2018               International Real Estate                Carlyle Credit Solutions7          $2.1 bn     2017
              CEP IV          €3.8 bn     2014              CER II        €0.3 bn     2021             Carlyle Secured Lending8          $2.0 bn     2013
             CEP III          €5.3 bn     2007               CER I        €0.5 bn     2017                               Middle Market CLOs
              CEP II          €1.8 bn     2003           CEREP III        €2.2 bn     2007                                  U.S           $0.7bn   2017-2021
               Carlyle Asia Partners                 Infrastructure & Natural Resources Funds                     Opportunistic Credit Carry Funds
               CAP V          $6.6 bn     2018                NGP Energy Carry Funds                                    CCOF II          $4.4 bn     2020
             CBPF II       RMB 2.0 bn     2017             NGP XII        $4.3 bn     2017                               CCOF I          $2.4 bn     2017
              CAP IV          $3.9 bn     2014              NGP XI        $5.3 bn     2014                         Distressed Credit Carry Funds
             CAP III          $2.6 bn     2008               NGP X        $3.6 bn     2012                               CSP IV          $2.5 bn     2016
              Carlyle Japan Partners                           Other NGP Carry Funds                                    CSP III          $0.7 bn     2011
              CJP IV        ¥258.0 bn     2020          NGP ETP IV        $0.2 bn     2022                               CSP II          $1.4 bn     2007
             CJP III        ¥119.5 bn     2013        NGP Minerals        $0.3 bn     2020                               Real Assets Credit
              Carlyle Global Partners                      NGP GAP        $0.4 bn     2014                        Infrastructure Credit Carry Fund
              CGP II          $1.8 bn     2020                 NGP Predecessor Funds                                       CICF          $0.4 bn     2021
               CGP I          $3.6 bn     2015            Various2        $5.7 bn   2007-2008                      Real Estate Credit Carry Fund
               Carlyle MENA Partners                     International Energy Carry Funds                                 CNLI9          $0.5 bn   


              MENA I          $0.5 bn     2008             CIEP II        $2.3 bn     2019                           Energy Credit Carry Funds
        Carlyle South American Buyout Fund                  CIEP I        $2.5 bn     2013                             CEMOF II          $2.8 bn     2015
             CSABF I          $0.8 bn     2009                 Infrastructure Funds                                     CEMOF I          $1.4 bn     2011
          Carlyle Sub-Saharan Africa Fund                    CRSEF        $0.7 bn     2019                           Carlyle Aviation Partners
             CSSAF I          $0.7 bn     2012               CGIOF        $2.2 bn     2019                              SASOF V          $1.0 bn     2020
                 Carlyle Peru Fund                          CPP II        $1.5 bn     2014                             SASOF IV          $1.0 bn     2018
               CPF I          $0.3 bn     2012               CPOCP        $0.5 bn     2013                            SASOF III          $0.8 bn     2015
       Carlyle U.S. Venture/Growth Partners                                                                            SASOF II          $0.6 bn     2012
           CP Growth          $1.1 bn     2021                                                                             CALF          $0.6 bn     2020
             CEOF II          $2.4 bn     2015                                                         Securitization Vehicles4          $3.6 bn    Various
              CEOF I          $1.1 bn     2011                                                                8 Other Vehicles4          $4.3 bn    Various
              CVP II          $0.6 bn     2001                                                                              Other Credit
        Carlyle Europe Technology Partners                                                                                CTAC3          $1.5 bn     2018
              CETP V          €1.6 bn     2022                                                                       Fortitude5          $5.2 bn     2020
             CETP IV          €1.4 bn     2019
            CETP III          €0.7 bn     2014                                                                      Global Investment Solutions6
       Carlyle Asia Venture/Growth Partners                                                                                  AlpInvest
       CAP Growth II          $0.8 bn     2021                                                                      Fund of Private Equity Funds
        CAP Growth I          $0.3 bn     2017                                                                     123 vehicles         €48.2 bn   2000-2022
             CAGP IV          $1.0 bn     2008                                                                         Secondary Investments
             Carlyle Cardinal Ireland                                                                              104 vehicles         €26.2 bn   2002-2022
                 CCI          €0.3 bn     2014                                                                             Co-Investments
                                                                                                                    92 vehicles         €20.8 bn   2002-2022


Note: All amounts shown represent total capital commitments as of March 31, 2022
unless otherwise noted. Certain of our recent vintage funds are currently in
fundraising and total capital commitments are subject to change. In addition,
certain carry funds included herein may be disclosed which are not included in
fund performance if they have not made an initial capital call or commenced
investment activity. The NGP funds are advised by NGP Energy Capital Management,
LLC, a separately registered investment adviser, and we do not serve as an
investment adviser to those funds.
(1)Global Private Equity also includes funds which we jointly advise with
Riverstone Holdings L.L.C. (the "Legacy Energy funds"). The impact of these
funds is no longer significant to our results of operations.
(2)Includes NGP M&R, NGP ETP II, and NGP IX, on which we are not entitled to a
share of carried interest.
(3)Amounts represent gross assets plus any available capital as of March 31,
(4)Amounts represent Total AUM as of March 31, 2022.
(5)Includes capital raised from a strategic third-party investor which directly
invests in Fortitude alongside Carlyle FRL.
(6)On April 1, 2021, we completed the sale of our interest in Metropolitan Real
(7)Carlyle Credit Solutions, Inc., which was renamed from TCG BDC II, Inc. in
March 2022.
(8)Carlyle Secured Lending, Inc., which was renamed from TCG BDC, Inc. in April
(9)Excludes $0.3 billion in capital commitments to CNLI made by a
Carlyle-affiliated fund, as well as Carlyle's strategic investment of $0.2

Trends affecting our business

The first quarter of 2022 was characterized by volatile markets, steady U.S.
fundamentals, and slowing growth in Europe and Asia. Our proprietary portfolio
data imply the U.S. economy grew at a 2.5% annualized rate in the first quarter,
a solid pace given de facto fiscal contraction, monetary policy tightening, and
high inflation. In March, consumer prices rose 8.5% from a year earlier, and
outpaced wage growth by nearly 3 percentage points. Post the Covid-19 Omicron
wave, data indicate that consumers had begun to realign their spending away from
goods (and e-commerce in particular) and back towards services, a positive
development for the alleviation of price pressures; in March 2022, U.S. hotel
occupancy rates exceeded 2019 levels for the first time since the onset of the
pandemic, and retail and dining foot traffic rose above 2019 comparisons in much
of the country. However, Russia's invasion of Ukraine and related sanctions
exacerbated already rising energy costs (gasoline prices rose 26% during the
first quarter) and food input prices (U.S. fertilizer prices are up nearly 200%
year-over-year). Supply chains, which had also displayed tentative signs of
recovering earlier in the quarter, have been disrupted anew as both the invasion
and its associated sanctions impede the flow of critical exports from Russia and
Ukraine. Notably, Russia and Ukraine are the largest and fifth-largest wheat
exporters, and Russia is the largest supplier of key ingredients used in the
production of fertilizer. The fallout of war is not only disrupting critical
supply chains, but also supply itself, as harvest and planting seasons are
jeopardized in Ukraine and energy and fertilizer costs squeeze margins for
farmers globally. These impacts increase the risk of persistently elevated
inflation into the latter half of the year.

Europe's economy is most exposed to the Russian invasion of Ukraine, with a
heavy reliance on Russian energy and Ukrainian and Russian goods as inputs into
their production processes. Our proprietary portfolio data indicate that by the
end of the first quarter of 2022, real GDP growth had slowed to a sub-1%
annualized rate. In February 2022, producer prices rose 31% from a year earlier,
the highest rate on record. The sharp rise in fuel and input prices has dented
consumer demand and made some industrial production processes uneconomical.

China, while more insulated from the effects of the Russia/Ukraine conflict,
faces significant headwinds from its zero-COVID policy. Economic growth in China
in the beginning of the first quarter of 2022 was stronger than expected, as
robust exports and domestic consumption buoyed the economy despite persistent
turmoil in real estate development activity and sales. However, our proprietary
portfolio data point to a contraction in March with the reimposition of
significant lockdowns across the country, particularly in Shanghai. China's
zero-COVID policy also has negative implications for global supply chains more
broadly; factory shutdowns and transport backlogs reintroduce the risk of
inventory shortfalls for automobiles, chips, smartphones, and other products
with significant manufacturing operations in China. As of April 11, 2022, the
number of container ships outside the port of Shanghai was 15% higher than in

In 2021, corporate earnings exceeded expectations driven by large productivity
gains stemming from investments in digitization and technology, which more than
offset input price inflation and powered margin expansion. Current estimates
anticipate S&P 500 constituents' Q1 2022 earnings grew more than 5% from a year
ago, a steady reading given the unfavorable comparison to last year's robust
level (the S&P 500 notched 90% earnings growth in Q1 2021). There is significant
dispersion around this average across sectors. Financials and discretionary
consumer goods companies are expected to see earnings decline over the quarter,
while the energy, industrials, and materials sectors are projected to outperform
strongly. Despite stable underlying growth on average, equity market volatility
has risen with interest rate volatility. Year-to-date in 2022, 10-year Treasury
yields have risen 130 basis points (bps) as of April 15, 2022. The Federal
Reserve raised the federal funds rate by 25bps in March and indicated that more
aggressive hikes were possible going forward. Futures markets have now priced in
eight additional 25bp rate increases in 2022 and three hikes in 2023; however,
there is significant uncertainty around these expectations, which is
contributing to the broader volatility in markets. The Dow Jones, S&P 500, and
Nasdaq 100 fell 5.2%, 7.8%, and 14.9%, respectively, from December 31, 2021 to
April 15, 2022. Globally, the MSCI ACWI, EuroStoxx 600 and Shanghai Composite
fell 8.5%, 5.7%, and 11.4%, respectively, over the same period.


Losses are concentrated at both ends of the risk spectrum where valuations have
been richest. The prices of speculative equities most exposed to interest rate
risk - namely, those of companies with cash flows weighted far into the future -
are down over 25% year-to-date; at the same time, low risk investment grade
bonds are down more than 10% as well. In general, higher rates have negative
implications for (1) fixed rate bond markets and (2) tech and high growth sector
assets. In both cases, higher discount rates negatively impact the value of
future cash flow. Obtaining financing in the high yield bond market is currently
challenging. Year-to-date through April 13, 2022, global bond funds experienced
nearly $115 billion in outflows. In contrast, the strongest performers
year-to-date have been assets with more moderate valuations that fall in the
middle of the risk spectrum, such as equities of companies with large dividends
and/or low enterprise value/sales ratios. Leveraged loans, which are floating
rate and thus more appealing to investors when interest rates are rising, have
also held up relatively well and were down modestly as of late-April. Financing
and transaction volumes overall, however, saw a significant slowdown in the
first quarter of 2022. Global M&A totaled roughly $900 billion for the quarter,
the lowest amount since Q2 2020, at the heart of the COVID crisis.

Our carry fund portfolio appreciated 5% in the first quarter against this market
backdrop characterized by higher-than-usual volatility, reflecting the strength
of our diversified platform and our ability to mitigate risk in periods of
uncertainty. Within our Global Private Equity segment, our infrastructure and
natural resources funds appreciated 19%, boosted by strong commodity prices; our
real estate funds appreciated 10% in the first quarter, led by continued strong
performance in U.S. real estate; and our corporate private equity funds
appreciated 3% in the first quarter driven by our U.S. and Europe portfolios. In
our Global Credit segment, our carry funds (which represent approximately 15% of
the total Global Credit remaining fair value) were flat for the quarter as
appreciation in our energy credit carry funds was offset by depreciation in
Carlyle Aviation Partners. Depreciation of 18% in our Aviation carry funds
reflects the impact of the war in Ukraine, as approximately 5% of the aircraft
leases in the portfolio are in the impacted region. We believe this is the only
strategy across our portfolio where we have significant direct exposure to
Russia, Belarus or Ukraine. Our Global Investment Solutions funds appreciated 4%
in the first quarter, which generally reflects investment fair values on a
one-quarter lag in the valuations of our primary and secondary fund of funds.
Our publicly traded investments, which comprise 10% of the total fair value in
our carry fund portfolio, depreciated 8% during the first quarter. Our non-carry
fund Global Credit products also continue to perform well. Dividend yields on
our business development companies as of March 31, 2022 were approximately 9% to
10%, and approximately 7% for our interval fund. In our liquid credit strategy,
our global CLO portfolio continues to have a default rate less than half that of
the industry average.

We generated $6.4 billion in realized proceeds from our carry funds in the first
quarter of 2022, generally in line with a year ago, but down from the record
levels of realizations seen in the third and fourth quarters of 2021. However,
our net accrued performance revenues on our balance sheet reached a record high
level at $4.3 billion at March 31, 2022, a 10% increase from December 31, 2021
reflecting the positive impact from valuations across the portfolio. We expect
this balance will deliver a high level of realized performance revenues in the
coming years.

During the first quarter, our carry funds invested $10.9 billion in new or
follow-on transactions, and we have announced and/or signed more than $1.5
billion of new or follow-on transactions that are expected to close in the
coming quarters. While high levels of industry dry powder and widely available
financing are likely to foster an increasingly competitive market, we believe
our investment platform will enable us to pivot quickly to pursue opportunities
where we have identified dislocation, which we believe positions us to continue
to deploy capital throughout 2022.

We raised $9.2 billion in new capital in the first quarter, with $2.0 billion in
additional third-party capital raised for our strategic investment in Fortitude,
the first closing in our fifth Europe technology fund and capital raised related
to the March 2022 acquisition of a diversified portfolio of triple net leases
from iStar. The pace of capital deployment has resulted in fund products coming
back to market faster than ever before, and limited partners have an increasing
array of investment opportunities to consider. As a result, we anticipate the
fundraising landscape to become increasingly competitive as limited partners
balance allocation limits with more offerings. In addition to organic growth
through fundraising, we have announced several transactions to drive accretive
growth on an inorganic basis, including our acquisition of CLO management
contracts from CBAM Partners LLC in March 2022, our recently announced agreement
to acquire life sciences investment firm Abingworth, and our strategic advisory
services agreement with Fortitude which was executed on April 1, 2022.

The SEC has put forth several rule proposals in recent months, and we are
currently evaluating the potential impacts to our business and operations, and
those of our portfolio companies. These proposals include, but are not limited
to, (i) new reporting requirements of material cybersecurity incidents and
periodic reporting regarding a company's cybersecurity risk programs, (ii) new
rules and amendments under the Investment Advisors Act of 1940 which expand
compliance obligations and prohibit certain activities for private fund
advisors, and (iii) extensive climate change disclosure regulations. We are also
closely evaluating the financial, regulatory and other proposals put forth by
the current Administration and Congress and their potential impacts on our
business. While there may be changes to current tax and regulatory regimes,
recent fiscal stimulus and


proposed infrastructure packages could be followed by longer-term spending
increases. The potential for policy changes may create regulatory uncertainty
for our portfolio companies and our investment strategies and could adversely
affect our profitability and the profitability of our portfolio companies.

The Great Resignation continues to impact labor markets, making hiring more
challenging and compensation more expensive as companies compete for talent.
While our levels of attrition have been generally consistent with pre-pandemic
levels, we have experienced increased turnover in our technology and finance
functions. As we look to recruit qualified professionals to backfill existing
positions and fill new roles, we may experience upward pressure on our
compensation packages.

recent transactions

Acquisition of the iStar Triple Net Lease portfolio

In March 2022, Carlyle Net Leasing Income, L.P., a Carlyle-affiliated investment
fund, acquired a diversified portfolio of triple net leases from iStar, Inc. for
an enterprise value of $3 billion, which was funded using $2 billion in debt and
$1 billion in equity. The portfolio includes properties spanning industrial,
office and entertainment space across 18.3 million square feet located
throughout the United States. The investment fund is not consolidated by us, and
the debt is non-recourse to us. As general partner of the investment fund, we
contributed $200 million as a minority interest balance sheet investment, which
is included in the our Global Credit principal equity method investments (see
Note 6 to the unaudited condensed consolidated financial statements included in
this Quarterly Report on Form 10-Q).

Acquisition of CLO management contracts from CBAM Partners LLC

On March 21, 2022, we acquired the management contracts related to a portfolio
of assets primarily comprised of U.S. and European CLOs as well as other assets
across private credit from CBAM Partners LLC ("CBAM"). The purchase price of
$812.9 million consisted of a combination of $618.4 million in cash,
approximately 4.2 million newly issued, fully vested common shares ($194.5
million based on the value of the shares at closing), and approximately
$3.4 million of acquisition costs incurred by us in connection with the
transaction. The portfolio of $15 billion in assets under management was
integrated into our Global Credit platform. See Note 4 to the unaudited
condensed consolidated financial statements for additional information regarding
the acquisition.

Fortitude capital increase and strategic advisory services agreement

In March 2022, we raised $2.0 billion in third-party equity capital for
Fortitude, and committed up to $100 million in additional capital to Carlyle FRL
from our balance sheet. Fortitude is expected to call the capital in two
drawdowns during 2022. In connection with the capital raise and subsequent
funding, our indirect ownership of Fortitude will decrease from 19.9% to 10.5%.
As a result of this dilution, we expect to record a reduction in the carrying
value of our equity method investment and corresponding loss of approximately
$277 million in our U.S. GAAP results based on the carrying value as of March
31, 2022, subject to change based on the timing of the dilution and changes in
the carrying value of our investment.

On April 1, 2022, we entered into a new strategic advisory services agreement
with certain subsidiaries of Fortitude through a newly-formed investment
advisor, Carlyle Insurance Solutions Management L.L.C. ("CISM"). Under the
agreement, CISM will provide Fortitude with certain services, including M&A,
transaction origination and execution, and capital management services in
exchange for a recurring fee based on Fortitude's general account assets, which
will adjust within an agreed range based on Fortitude's overall profitability.
See Note 6 to the unaudited condensed consolidated financial statements for
additional information regarding the strategic investment in Fortitude.

Acquisition of Abingworth

In April 2022, we agreed to acquire Abingworth, a life sciences investment firm,
which will expand our healthcare investment platform with the addition of over
$2 billion in assets under management and a specialized team of over 20
investment professionals and advisors. Consideration for Abingworth includes a
base purchase price of $187.5 million, of which up to $47.5 million may be
settled with newly-issued shares of our common stock, as well as up to a further
$130 million in future incentive payments based on the achievement of certain
performance targets. The acquisition includes the rights to 15% of performance
revenues generated by Abingworth's two most recent active investment funds,
Abingworth Bioventures 8 LP and Abingworth Clinical Co-Development Fund 2 LP.
The transaction is expected to close in 2022.


In April 2022, the Company's Board of Directors declared a quarterly dividend of
$0.325 per share to common stockholders of record at the close of business on
May 10, 2022, payable on May 17, 2022.


Main financial measures

Our key financial measures are described on the following pages. Additional information regarding these key financial measures and our other significant accounting policies can be found in Note 3 to the unaudited condensed consolidated financial statements included with this Quarterly Report on Form 10-Q.


Revenues primarily consist of fund management fees, incentive fees, investment
income (including performance allocations, realized and unrealized gains of our
investments in our funds and other principal investments), as well as interest
and other income.

Fund Management Fees. Fund management fees include management fees and
transaction and portfolio advisory fees. We earn management fees for advisory
services we provide to funds in which we hold a general partner interest or with
which we have an investment advisory or investment management agreement.
Additionally, management fees include catch-up management fees, which are
episodic in nature and represent management fees charged to fund investors in
subsequent closings of a fund which apply to the time period between the fee
initiation date and the subsequent closing date. Approximately 90% of our fee
revenue is in the form of management fees from traditional closed-end,
long-dated funds, which are highly predictable and stable, and do not have
significant exposure to the underlying fund valuations. More than 95% of our
Fee-earning AUM is in fund structures with contractual lives of generally ten
years, and is not subject to redemption without cause.

Management fees attributable to Carlyle Partners VII, L.P. ("CP VII"), our
seventh U.S. buyout fund with $15.6 billion of Fee-earning AUM as of March 31,
2022 were approximately 10% and 16% of fund management fees recognized during
the three months ended March 31, 2022 and 2021, respectively. No other fund
generated over 10% of fund management fees in the periods presented.

Fund management fees exclude the reimbursement of any partnership expenses paid
by the Company on behalf of the Carlyle funds pursuant to the limited
partnership agreements, including amounts related to the pursuit of actual,
proposed, or unconsummated investments, professional fees, expenses associated
with the acquisition, holding and disposition of investments, and other fund
administrative expenses.

Transaction and Portfolio Advisory Fees. Transaction and portfolio advisory fees
generally include fees we receive for the transaction and portfolio advisory
services we provide to our portfolio companies. When covered by separate
contractual agreements, we recognize transaction and portfolio advisory fees for
these services when the performance obligation has been satisfied and collection
is reasonably assured. We are required to offset our fund management fees earned
by a percentage of the transaction and advisory fees earned, which we refer to
as the "rebate offsets." Historically, such rebate offset percentages generally
approximated 80% of the fund's portion of the transaction and advisory fees
earned. However, the percentage of transaction and portfolio advisory fees we
share with our investors on our recent vintage funds has generally increased,
and as such the rebate offset percentages generally range from 80% to 100% of
the fund's portion of the transaction and advisory fees earned, such that a
larger share of the transaction fee revenue we retain is driven by co-investment
activity. In addition, Carlyle Global Capital Markets ("GCM") generates capital
markets fees in connection with activities related to the underwriting, issuance
and placement of debt and equity securities, and loan syndication for our
portfolio companies and third-party clients, which are generally not subject to
rebate offsets with respect to our most recent vintages (but are subject to the
rebate offsets set forth above for older funds). Underwriting fees include
gains, losses and fees arising from securities offerings in which we participate
in the underwriter syndicate. The recognition of portfolio advisory fees,
transactions fees, and capital markets fees can be volatile as they are
primarily generated by investment activity within our funds, and therefore are
impacted by our investment pace.

Incentive Fees. Incentive fees consist of performance-based incentive
arrangements pursuant to management contracts, primarily from certain of our
Global Credit funds, when the return on assets under management exceeds certain
benchmark returns or other performance targets. In such arrangements, incentive
fees are recognized when the performance benchmark has been achieved.

Investment Income. Investment income consists of our performance allocations as
well as the realized and unrealized gains and losses resulting from our equity
method investments and other principal investments.

Performance allocations consist principally of the performance-based capital
allocation from fund limited partners to us, commonly referred to as carried
interest, from certain of our investment funds, which we refer to as the "carry
funds." Carried interest revenue is recognized by Carlyle upon appreciation of
the valuation of our funds' investments above certain return hurdles as set
forth in each respective partnership agreement and is based on the amount that
would be due to us pursuant to the fund partnership agreement at each period end
as if the funds were liquidated at such date. Accordingly, the amount of carried
interest recognized as performance allocations reflects our share of the fair
value gains and losses of the associated funds' underlying investments measured
at their then-current fair values relative to the fair values as of the end of
the prior period. As


a result, the performance allocations earned in an applicable reporting period
are not indicative of any future period, as fair values are based on conditions
prevalent as of the reporting date. Refer to "- Trends Affecting our Business"
for further discussion.

In addition to the performance allocations from our Global Private Equity funds
and closed-end carry funds in the Global Credit segment, we are also entitled to
receive performance allocations from our Global Investment Solutions, Carlyle
Aviation and NGP Carry Funds. We also retained our interest in the net accrued
performance allocations of existing funds at the time of the sale of MRE. The
timing of performance allocations realizations for these funds is typically
later than in our other carry funds based on the terms of such arrangements.

Our performance allocations are generated by a diverse set of funds with different vintages, geographic focus, investment strategies and sector specialties. For an explanation of the fund acronyms used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section, see “- Our family of funds”.

The table below presents funds which generated performance allocations in excess
of 10% of the total for the three months ended March 31, 2022 and 2021. No other
fund generated over 10% of performance allocations in the periods presented.

                                  Three Months Ended
                                      March 31,
                                            2022                    2021
                                                               (Dollars in millions)

                                                      CRP VIII  $ 135.2       CP VI   $ 535.6
                                                       CP VII      73.3       CEP IV    405.3
                                                       CIEP I      71.0
                                                       CEP IV      70.2

Under our arrangements with the historical owners and management team of
AlpInvest, we generally do not retain any carried interest in respect of the
historical investments and commitments to our fund vehicles that existed as of
July 1, 2011 (including any options to increase any such commitments exercised
after such date). We are entitled to 15% of the carried interest in respect of
commitments from the historical owners of AlpInvest for the period between 2011
and 2020, except in certain instances, and 40% of the carried interest in
respect of all other commitments (including all future commitments from third
parties). In certain instances, carried interest associated with the AlpInvest
fund vehicles is subject to entity level income taxes in the Netherlands.

We record our equity income allocation from NGP performance allocations in
principal investment income (loss) from equity method investments rather than
performance allocations in our unaudited condensed consolidated statements of
operations. We recognized $250.4 million of net investment earnings related to
these performance allocations for the three months ended March 31, 2022.

Realized carried interest may be clawed back or given back to the fund if the
fund's investment values decline below certain return hurdles, which vary from
fund to fund. When the fair value of a fund's investments remains constant or
falls below certain return hurdles, previously recognized performance
allocations are reversed. In all cases, each investment fund is considered
separately in evaluating carried interest and potential giveback obligations.
For any given period, performance allocations revenue on our statement of
operations may include reversals of previously recognized performance
allocations due to a decrease in the value of a particular fund that results in
a decrease of cumulative performance allocations earned to date. Since fund
return hurdles are cumulative, previously recognized performance allocations
also may be reversed in a period of appreciation that is lower than the
particular fund's hurdle rate. Additionally, unrealized performance allocations
reverse when performance allocations are realized, and unrealized performance
allocations can be negative if the amount of realized performance allocations
exceed total performance allocations generated in the period. For the three
months ended March 31, 2022 and 2021, the reversals of performance allocations
were $96.5 million and $20.1 million, respectively.

As of March 31, 2022, accrued performance allocations and accrued giveback
obligations were $8.5 billion and $40.4 million, respectively. Each balance
assumes a hypothetical liquidation of the funds' investments at March 31, 2022
at their then current fair values. These assets and liabilities will continue to
fluctuate in accordance with the fair values of the funds' investments until
they are realized. As of March 31, 2022, $18.7 million of the accrued giveback
obligation is the responsibility of various current and former senior Carlyle
professionals and other limited partners of the Carlyle Holdings partnerships,
and the net accrued giveback obligation attributable to the Company is $21.7
million. The Company uses "net accrued performance revenues" to refer to the
aggregation of the accrued performance allocations and incentive fees net of (i)
accrued giveback obligations, (ii) accrued performance allocations and incentive
fee-related compensation, (iii) performance allocations and incentive
fee-related tax obligations, and (iv) accrued performance allocations and
incentive fees attributable to non-controlling


interests. Net accrued performance revenues excludes any net accrued performance
allocations and incentive fees that have been realized but will be collected in
subsequent periods, as well as net accrued performance revenues which are
presented as fee related performance revenues when realized in our non-GAAP
financial measures. Net accrued performance revenues as of March 31, 2022 are
$4.3 billion.

In addition, realized performance allocations may be reversed in future periods
to the extent that such amounts become subject to a giveback obligation. If, at
March 31, 2022, all investments held by our carry funds were deemed worthless,
the amount of realized and previously distributed performance allocations
subject to potential giveback would be approximately $1.6 billion on an
after-tax basis where applicable, of which approximately $0.7 billion would be
the responsibility of current and former senior Carlyle professionals. See the
related discussion of "Contingent Obligations (Giveback)" within "- Liquidity
and Capital Resources."

The following table summarizes the total amount of aggregate giveback
obligations that we have realized since Carlyle's inception. Given various
current and former senior Carlyle professionals and other limited partners of
the Carlyle Holdings partnerships are responsible for paying the majority of the
realized giveback obligation, the table below also summarizes the amount that
was attributable to the Company:


by March 31, 2022

                                                                                  Giveback Attributable to
                                                         Total Giveback                   Carlyle
                                                                     (Dollars in millions)
Various Legacy Energy Funds                           $            158.0          $                55.0
All other Carlyle Funds                                             80.2                           12.7
Aggregate Giveback since Inception                    $            238.2          $                67.7

The funding for employee obligations and givebacks related to carry realized
pre-IPO is primarily through a collection of employee receivables related to
giveback obligations and from non-controlling interests for their portion of the
obligation. The realization of giveback obligations for the Company's portion of
such obligations reduces Distributable Earnings in the period realized and
negatively impacts earnings available for distributions to shareholders in the
period realized. Further, each individual recipient of realized carried interest
typically signs a guarantee agreement or partnership agreement that personally
obligates such person to return his/her pro rata share of any amounts of
realized carried interest previously distributed that are later clawed back.
Accordingly, carried interest as performance allocation compensation is subject
to return to the Company in the event a giveback obligation is funded.
Generally, the actual giveback liability, if any, does not become due until the
end of a fund's life.

Each investment fund is considered separately in evaluating carried interest and
potential giveback obligations. As a result, performance allocations within
funds will continue to fluctuate primarily due to certain investments within
each fund constituting a material portion of the carry in that fund.
Additionally, the fair value of investments in our funds may have substantial
fluctuations from period to period.

In addition, in our analysis of our non-GAAP results, we use the term “net realized performance income” to refer to realized performance allocations and incentive fees from our funds, net of the portion allocated to our performance professionals. investment, if any, and certain tax charges associated with deferred interest attributable to certain partners and employees, which are reflected as realized performance allowances and compensation expense related to incentive awards. See “- Non-GAAP Financial Measures” for the amount of net realized performance income recognized each period. See “- Segment Analysis” for net performance revenue realized by segment and related discussion for each period.

Investment income also represents the realized and unrealized gains and losses
on our principal investments, including our investments in Carlyle funds that
are not consolidated, as well as any interest and other income. As it relates to
our investments in NGP, investment income also includes our equity income
allocation in NGP performance allocations, the amortization of the basis
difference between the carrying value of our investment and our share of the
underlying net assets of the investee, as well as the compensation expense
associated with compensatory arrangements provided by us to employees of our
equity method investee. Realized principal investment income (loss) is recorded
when we redeem all or a portion of our investment or when we receive or are due
cash income, such as dividends or distributions. A realized principal investment
loss is also recorded when an investment is deemed to be worthless. Unrealized
principal investment income (loss) results from changes in the fair value of the
underlying investment, as well as the reversal of previously recognized
unrealized gains (losses) at the time an investment is realized.

Fair Value Measurement. U.S. GAAP establishes a hierarchical disclosure
framework which ranks the observability of market price inputs used in measuring
financial instruments at fair value. The observability of inputs is impacted by
a number


of factors, including the type of financial instrument, the characteristics
specific to the financial instrument and the state of the marketplace, including
the existence and transparency of transactions between market participants.
Financial instruments with readily available quoted prices, or for which fair
value can be measured from quoted prices in active markets, will generally have
a higher degree of market price observability and a lesser degree of judgment
applied in determining fair value.

The table below summarizes the valuation of investments and other financial
instruments included within our AUM, by segment and fair value hierarchy levels,
as of March 31, 2022:

                                                  As of March 31, 2022
                              Private              Global
                              Equity               Credit       Global Investment Solutions         Total
Consolidated Results                              (Dollars in millions)
Level I                     $   5,733            $    307      $                      1,646      $   7,686
Level II                        5,583               1,658                               176          7,417
Level III                     112,731              70,372                            42,224        225,327
Fair Value of Investments     124,047              72,337                            44,046        240,430
Available Capital              45,039              18,477                            21,220         84,736
Total AUM                   $ 169,086            $ 90,814      $                     65,266      $ 325,166

Interest and Other Income of Consolidated Funds. Interest and other income of
Consolidated Funds primarily represents the interest earned on CLO assets. The
Consolidated Funds are not the same entities in all periods presented. The
Consolidated Funds in future periods may change due to changes in fund terms,
formation of new funds, and terminations of funds.

Net Investment Gains (Losses) of Consolidated Funds. Net investment gains
(losses) of Consolidated Funds measures the change in the difference in fair
value between the assets and the liabilities of the Consolidated Funds. A gain
(loss) indicates that the fair value of the assets of the Consolidated Funds
appreciated more (less), or depreciated less (more), than the fair value of the
liabilities of the Consolidated Funds. A gain or loss is not necessarily
indicative of the investment performance of the Consolidated Funds and does not
impact the management or incentive fees received by Carlyle for its management
of the Consolidated Funds. The portion of the net investment gains (losses) of
Consolidated Funds attributable to the limited partner investors is allocated to
non-controlling interests. Therefore a gain or loss is not expected to have a
material impact on the revenues or profitability of the Company. Moreover,
although the assets of the Consolidated Funds are consolidated onto our balance
sheet pursuant to U.S. GAAP, ultimately we do not have recourse to such assets
and such liabilities are generally non-recourse to us. Therefore, a gain or loss
from the Consolidated Funds generally does not impact the assets available to
our common stockholders.


Compensation and Benefits. Compensation includes salaries, bonuses, equity-based
compensation, and performance payment arrangements. Bonuses are accrued over the
service period to which they relate.

We recognize as compensation expense the portion of performance allocations and
incentive fees that are due to our employees, senior Carlyle professionals,
advisors, and operating executives in a manner consistent with how we recognize
the performance allocations and incentive fee revenue. These amounts are
accounted for as compensation expense in conjunction with the related
performance allocations and incentive fee revenue and, until paid, are
recognized as a component of the accrued compensation and benefits liability.
Compensation in respect of performance allocations and incentive fees is paid
when the related performance allocations and incentive fees are realized, and
not when such performance allocations and incentive fees are accrued. The funds
do not have a uniform allocation of performance allocations and incentive fees
to our employees, senior Carlyle professionals, advisors, and operating
executives. Therefore, for any given period, the ratio of performance
allocations and incentive fee compensation to performance allocations and
incentive fee revenue may vary based on the funds generating the performance
allocations and incentive fee revenue for that period and their particular
allocation percentages.

In addition, we have implemented various equity-based compensation arrangements
that require senior Carlyle professionals and other employees to vest ownership
of a portion of their equity interests over a service period of generally one to
four years, which under U.S. GAAP will result in compensation charges over
current and future periods. During 2019 and 2020, we granted fewer equity awards
than we have previously. In 2021, we granted approximately 7.1 million in
long-term strategic restricted stock units to certain senior professionals, the
majority of which are subject to vesting based on the achievement of annual
performance targets over four years, with a larger proportion of the awards
vesting based on the 2024 performance year. As a result, combined with a higher
share price than in prior periods, equity-based compensation expense


will be higher in the coming years than it has been. Compensation expense associated with all stock-based compensation awards is excluded from fee-related revenue and distributable earnings.

We may hire additional individuals and overall compensation levels may
correspondingly increase, which could result in an increase in compensation and
benefits expense. As a result of prior acquisitions, we have charges associated
with contingent consideration taking the form of earn-outs and profit
participation, some of which are reflected as compensation expense.

General, Administrative and Other Expenses. General, administrative and other
expenses include occupancy and equipment expenses and other expenses, which
consist principally of professional fees, including those related to our global
regulatory compliance program, external costs of fundraising, travel and related
expenses, communications and information services, depreciation and amortization
(including intangible asset amortization and impairment) and foreign currency
transactions. We expect that general, administrative and other expenses will
vary due to infrequently occurring or unusual items, such as impairment of
intangible assets or lease right-of-use assets and expenses or insurance
recoveries associated with litigation and contingencies. Also, in periods of
significant fundraising, to the extent that we use third parties to assist in
our fundraising efforts, our general, administrative and other expenses may
increase accordingly. Similarly, our general, administrative and other expenses
may increase as a result of professional and other fees incurred as part of due
diligence related to strategic acquisitions and new product development.
Additionally, we anticipate that general, administrative and other expenses will
fluctuate from period to period due to the impact of foreign exchange

Interest and other expenses of consolidated funds. Interest and other expenses of the consolidated funds consist primarily of interest expense related primarily to our CLO loans, professional fees and other third party expenses.

Income Taxes. Income taxes are accounted for using the asset and liability
method of accounting. Under this method, deferred tax assets and liabilities are
recognized for the expected future tax consequences of differences between the
carrying amounts of assets and liabilities and their respective tax basis, using
currently enacted tax rates. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period in which the
change is enacted. Deferred tax assets are reduced by a valuation allowance when
it is more likely than not that some or all of the deferred tax assets will not
be realized.

The interim provision for income taxes is calculated using the discrete
effective tax rate method as allowed by ASC 740, Accounting for Income Taxes.
The discrete method is applied when the application of the estimated annual
effective tax rate is impractical because it is not possible to reliably
estimate the annual effective tax rate. The discrete method treats the
year-to-date period as if it was the annual period and determines the income tax
expense or benefit on that basis.

In the normal course of business, we are subject to examination by federal and
certain state, local and foreign tax regulators. With a few exceptions, as of
March 31, 2022, our U.S. federal income tax returns for the years 2018 through
2020 are open under the normal three-year statute of limitations and therefore
subject to examination. State and local tax returns are generally subject to
audit from 2016 to 2020. Foreign tax returns are generally subject to audit from
2011 to 2020. Certain of our affiliates are currently under audit by federal,
state and foreign tax authorities.

Non-controlling Interests in Consolidated Entities. Non-controlling interests in
consolidated entities represent the component of equity in consolidated entities
not held by us. These interests are adjusted for general partner allocations.

Earnings Per Common Share. We compute earnings per common share in accordance
with ASC 260, Earnings Per Share. Basic earnings per common share is calculated
by dividing net income (loss) attributable to the common shares of the Company
by the weighted average number of common shares outstanding for the period.
Diluted earnings per common share reflects the assumed conversion of all
dilutive securities. We apply the treasury stock method to determine the
dilutive weighted-average common shares represented by unvested restricted stock
units. For certain equity-based compensation awards that contain performance or
market conditions, the number of contingently issuable common shares is included
in diluted earnings per common share based on the number of common shares, if
any, that would be issuable under the terms of the awards if the end of the
reporting period were the end of the contingency period, if the result is

Non-GAAP Financial Measures

Distributable Earnings. Distributable Earnings, or "DE", is a key performance
benchmark used in our industry and is evaluated regularly by management in
making resource deployment and compensation decisions, and in assessing the
performance of our three segments. We also use DE in our budgeting, forecasting,
and the overall management of our segments. We believe that reporting DE is
helpful to understanding our business and that investors should review the same
supplemental financial measure that management uses to analyze our segment
performance. DE is intended to show the amount of net realized earnings without
the effects of consolidation of the Consolidated Funds. DE is derived from our
segment reported results and is an additional measure to assess performance.

Distributable profit differs from profit (loss) before provision for income taxes calculated in accordance with WE GAAP in that it includes certain tax charges associated with certain foreign performance income (composed of performance income


allocations and incentive fees), and does not include unrealized performance
allocations and related compensation expense, unrealized principal investment
income, equity-based compensation expense, net income (loss) attributable to
non-Carlyle interest in consolidated entities, or charges (credits) related to
Carlyle corporate actions and non-recurring items. Charges (credits) related to
Carlyle corporate actions and non-recurring items include: charges associated
with acquisitions, dispositions, or strategic investments, changes in the tax
receivable agreement liability, amortization and any impairment charges
associated with acquired intangible assets, transaction costs associated with
acquisitions and dispositions, charges associated with earnouts and contingent
consideration including gains and losses associated with the estimated fair
value of contingent consideration issued in conjunction with acquisitions or
strategic investments, impairment charges associated with lease right-of-use
assets, gains and losses from the retirement of debt, charges associated with
contract terminations and employee severance. We believe the inclusion or
exclusion of these items provides investors with a meaningful indication of our
core operating performance. This measure supplements and should be considered in
addition to and not in lieu of the results of operations discussed further under
"Consolidated Results of Operations" prepared in accordance with U.S. GAAP.

Fee Related Earnings. Fee Related Earnings, or "FRE", is a component of DE and
is used to assess the ability of the business to cover direct base compensation
and operating expenses from total fee revenues. FRE differs from income (loss)
before provision for income taxes computed in accordance with U.S. GAAP in that
it adjusts for the items included in the calculation of DE and also adjusts DE
to exclude net realized performance revenues, realized principal investment
income from investments in Carlyle funds, net interest (interest income less
interest expense), and certain general, administrative and other expenses when
the timing of any future payment is uncertain. Fee Related Earnings includes fee
related performance revenues and related compensation expense. Fee related
performance revenues represent the realized portion of performance revenues that
are measured and received on a recurring basis, are not dependent on realization
events, and which have no risk of giveback.

Operating Metrics

We monitor certain operating metrics common to the asset management industry.

  Fee-earning Assets under Management. Fee-earning assets under management or
Fee-earning AUM refers to the assets we manage or advise from which we derive
recurring fund management fees. Our Fee-earning AUM is generally based on one of
the following, once fees have been activated:

(a)the amount of limited partner capital commitments, generally for carry funds
where the original investment period has not expired, for AlpInvest carry funds
during the commitment fee period (see "Fee-earning AUM based on capital
commitments" in the table below for the amount of this component at each

(b)the remaining amount of limited partner invested capital at cost, generally
for carry funds and certain co-investment vehicles where the original investment
period has expired and one of our business development companies (see
"Fee-earning AUM based on invested capital" in the table below for the amount of
this component at each period);

(c) the amount of the total balance of the commission-generating guarantees at par of our CLOs and other special purpose vehicles, as defined in the trust indentures (generally excluding shares and positions in default) at the date of quarterly closing;

(d) the share of the external investor in the net asset value of certain carry funds (see “AUM under management remunerated on the basis of the net asset value” in the table below for the amount of this component in each period);

(e)the gross assets (including assets acquired with leverage), excluding cash
and cash equivalents, of one of our business development companies and certain
carry funds (see "Fee-earning AUM based on lower of cost or fair value and
other" in the table below for the amount of this component at each period); and

(f)the lower of cost or fair value of invested capital, generally for AlpInvest
carry funds where the commitment fee period has expired and certain carry funds
where the investment period has expired, (see "Fee-earning AUM based on lower of
cost or fair value and other" in the table below for the amount of this
component at each period).


The table below details Fee-earning AUM by its respective components at each

                                                                               As of March 31,
                                                                          2022                 2021
Consolidated Results                                                        (Dollars in millions)
Components of Fee-earning AUM
Fee-earning AUM based on capital commitments (1)                     $     72,933          $   78,362
Fee-earning AUM based on invested capital (2)                              63,311              39,622
Fee-earning AUM based on collateral balances, at par (3)                   43,406              27,617
Fee-earning AUM based on net asset value (4)                                9,942               8,084

Assets under management remunerated at the lower of cost or fair value and other (5) 21,468

Balance, End of Period (6) (7) (8)                                   $    

211,060 $173,132

(1)Reflects limited partner capital commitments where the original investment
period, weighted-average investment period, or commitment fee period has not

(2)Reflects the capital invested by the limited partner at cost and includes amounts committed or reserved for the investments of certain Global Private Equity funds and Global Investment Solutions.

(3) Represents the total amount of fee-bearing collateral balances and principal balances, at par, for our CLOs/structured products.

(4) Reflects the net asset value of certain other carry funds.

(5) Includes funds whose fees are based on gross asset value.

(6)Energy III, Energy IV, and Renew II (collectively, the "Legacy Energy
Funds"), are managed with Riverstone Holdings LLC and its affiliates. Affiliates
of both Carlyle and Riverstone act as investment advisors to each of the Legacy
Energy Funds. Carlyle has a minority representation on the management committees
of Energy IV and Renew II. Carlyle and Riverstone each hold half of the seats on
the management committee of Energy III, but the investment period for this fund
has expired and the remaining investments in such fund are being disposed of in
the ordinary course of business. As of March 31, 2022, the Legacy Energy Funds
had, in the aggregate, approximately $0.2 billion in AUM and $0.4 billion in
Fee-earning AUM. We are no longer raising capital for the Legacy Energy Funds
and expect these balances to continue to decrease over time as the funds wind

(7)Ending balances as of March 31, 2022 and 2021 exclude $14.3 billion and $12.7
billion, respectively, of pending Fee-earning AUM for which fees have not yet
been activated.

(8) The closing balance at March 31, 2021 understand $2.3 billion of assets under management remunerated in Metropolitan real estatewhich was sold on April 1, 2021.

The table below shows the period-to-period rollforward of remunerated assets under management.

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