Goldman Sachs 2024 US Financial Services Conference Transcript

Alex Blostein:

Great. Good morning, and thanks, everybody, for joining us. We're going to get started. It

is my pleasure to welcome Harvey Schwartz, CEO of Carlyle. With almost $450 billion

in assets under management, Carlyle is one of the largest global alternative asset

managers across private equity, real assets, and private credit. Over the course of 2024,

the firm has seen an accelerating level of activity, raising $27 billion of capital, deploying

$13 billion into investments, and returning $19 billion to LPs, so all generating strong

returns and the firm seems like it's picking up some momentum here. Thank you for

being here. Really looking forward to chatting with you about the environment, Carlyle,

what's in store for '25, and all that good stuff.

Harvey Schwartz:

Great. Good to see everybody again. Thanks for being here.

Alex Blostein:

Great. Why don't we get started, Harvey, with a little bit of an outlook at a very sort of

top of the house level? You're coming up on your 2 years as CEO of Carlyle. And over

this period, you've made a number of strategic changes including realigning the firm's

compensation structure, appointing new leadership, pivoting capital management to be

more focused on share repurchases, and a number of others. As you look out into 2025,

talk to us a little bit about what your priorities are. And what would make that a

successful year for Carlyle?

Harvey Schwartz:

Sure. Thanks, Alex. I think the way I would summarize the first 2 years is really

systematically repositioning the firm for growth. And so that was a process, a little bit

textbook. Come in, make an assessment, establish strategic priorities, targets, do a full

assessment of literally every aspect of the firm, From costs, expenses, capital

deployment, resources, performance, where the real levers of growth were. Obviously,

understand the dynamics of the industry, which are pretty extraordinary as we all know in

terms of what's happening in private capital, and then setting up a leadership team in a

way that empowered them and allowed the firm for them to really mobilize against those

targets.

And as you said, at just about $450 billion of assets, at the 2-year point, I'm super proud

and appreciative of all the hard work that the team has done. Because we've now

achieved record FRE, targeted $1.1 billion, which we'll hit this year. That's up 33% year

over year. We have record AUM at $450 billion. Margins have gone up 1,100 basis

points. We targeted 40% to 50%, we came in at 47%. We'll hit that target ultimately at

50%, but we're not in a rush to do that. I think you see it in the numbers.

And obviously, we've also had record fundraising. We had a target we put out of $40

billion to give all of you some clarity on the fundraising, and we'll be on either side of

that. The momentum across the platform is quite significant at this point, and so I think

we're really well positioned to continue to grow the platform. And you see it again in the

environment in terms of monetization of capital deployed, and you even saw it in the

third quarter with the growth in accrued carry, which was very significant.

Alex Blostein:

Yeah, that was a big step up. Let's spend a couple of minutes on the environment.

Following the U.S. election, there's been clearly a lot of enthusiasm about the outlook for

capital market activity, and you alluded to some of that on your last call. You were I

think the only vol to speak after the election, so you kind of provided some perspective

on that. I guess are you seeing some of this excitement around the markets translate into

actually better yield pipeline? I guess said another way, have you noticed any change in

your own activity levels post the November election? And what does that ultimately

mean for 2025 deployment and monetization activity?

Harvey Schwartz:

Coming into the election, we -- so we get a lot of pretty extraordinary information from

the portfolio. We have across the portfolio of companies in excess of 1 million

employees. And we systematically rolled up that proprietary data, and we could see

across 2024, 7%, 8%, 9%, 10% EBITDA growth in those portfolio of companies. And

you could also see some sectors starting to sell a little extreme, but certainly not anything

that was inconsistent with the public numbers you would ultimately see in terms of GDP

growth.

I think what the Fed was doing was quite smart. The environment was already quite

good. In 2024, you saw us have a record year in terms of our CLO business, which is the

largest in the world. Spreads were tight. I think the big element that was missing as you

came into the end of 2024 was the uncertainty around the election. A lot of us were, and I

don't think it was just that the expectation around the election was that it was a coin toss

coming into the end, but it was more this notion that you might not even have a

government. And the second you saw that uncertainty removed, obviously the markets

moved quite significantly. And that only adds momentum to what we were already

seeing.

But I think the foundation was extraordinarily good. We already, in the third quarter,

we've already had a record capital markets year. It's not a record activity year. And so,

you're already seeing the operating leverage and everything coming through. I think that

with President Trump coming in, the first thing we did is we took the uncertainty off the

table around what does the election outcome mean. Now we know, because the

administration has been very specific in terms of how they're going to approach business

drivers. Tax, corporate tax, regulatory environment. And all these things create a

dialogue, and we're seeing it with our CEOs in their boardrooms, around a sense of

certainty. Now, we'll have to see how a lot of the geopolitical stuff plays out. There's an

element of uncertainty in the world there which I'm not trying to dismiss, but if you just

narrowly define it in terms of the business environment, I think this is one of the best

business environments we've seen in a long time for any of us who have been doing this

for many decades. It's super favorable.

Alex Blostein:

Great. Well, it's good to hear. Let's focus on fundraising for a couple of minutes. You

mentioned that in the earlier point. You guys are going to be in and around kind of $40

billion for this year. As you look out into 2025, maybe spend a couple of minutes on what

your expectations are for '25 fundraising and what are some of the key building blocks

you expect to contribute to that growth?

Harvey Schwartz:

I think all of you know the firm, but just again to break it down across the $450 billion,

we have a segment we call private equity, which is corporate private equity and it's really

-- I think when everybody thinks about Carlyle, they think about that as sort of the soul

of the firm with its 40-year history. But it's much more than. It's a real estate business

which is growing. I think we will be one of the few real estate businesses in the world

that will actually grow this year. The performance is, I've been quite careful here because

they're still actively fundraising. That includes our infrastructure platform, our energy

business, so that's all in the bundle when we think about the private equity segment.

And then we have our credit business, which has been growing plus 30% CAGR for 5

years, that's $200 billion. And then there's our solutions business which you should think

of as our secondaries business. And what you're seeing is dramatic growth in the

secondaries business which is really the counterbalance to what was happening, and I

think is now shifting, in the private equity segment where corporate private equity is a

little bit slower in terms of fundraising. That's really an industry dynamic as we've all

seen in terms of monetization, but that's all picking up as you pointed out. But we've seen

growth in credit, we've seen growth in the solutions business, and we've seen growth in

significant parts of the private equity platform.

We put out the number of $40 billion for everyone because the firm historically hasn't put

out these targets. And I really felt coming into my second year that we had to give all of

you some sense of perspective on what we were driving at. A year ago February, we

announced the compensation changes which really were all about alignment. And giving

the investors more carry, giving our shareholders a greater portion of the FRE and the fee

pool, and I've got to give John and the whole team an incredible amount of credit for

implementing that in a very short period of time. Not an easy thing to do. John became

CFO and 3 months later we got that in place. It created basically the base upon which we

felt comfortable giving all of you those numbers. I think one of the things is, in

retrospect, when we said $40 billion, we shouldn't have said divided by 4. That's just not

how the business works. It just doesn't come in in $10 billion segments.

Alex Blostein:

It makes the model easy though.

Harvey Schwartz:

What was that?

Alex Blostein:

I said it makes the model easier.

Harvey Schwartz:

Yeah, we could have helped you with that. But yeah, it does make modeling easier. But

no, I think that was a mistake in terms of what we communicated. But I think the

momentum is good. We'll be likely in the market at the end of next year with our large

U.S. buyout fund. My expectation is that will be larger than its predecessor fund. We'll

start that fundraising coming into 2026. And we haven't talked about wealth, which has

been up dramatically and has huge momentum.

Alex Blostein:

Let's unpack a couple of these things, starting with private equity you mentioned earlier,

and the corporate private equity piece. We've seen a really nice acceleration in

performance recently. You mentioned accrued carry was up obviously nicely last quarter.

Carlyle generally has a history of marking their investments fairly conservatively, and as

you kind of get closer to monetization activity, those returns tend to kind of pick up. I

guess given the more constructive monetization backdrop, how do you think this is likely

to impact IRRs and just the exit activity in both CPVII and VIII? And obviously, you

mentioned that you guys sound pretty optimistic about the timing and size for CPIX, but

how are the 2 predecessor funds likely to shake out given the industry environment that

we're in?

Harvey Schwartz:

Yeah, a couple of things. Back to the environment just for a second, you all would have

seen we had two significant IPOs in the last couple of months. Standard Arrow, which

was I think at the time the third largest IPO of the year globally. Rigaku, which is we

have an extraordinary Japanese franchise, been there for over 25 years, that's the largest

ever sponsor IPO in the history of Japan. They went public. You talked about the capital

we deployed. And you saw the big pickup in fund performance, adding almost 1/3 to the

carry in the quarter.

This is all reflective of 2 things. One, market environment. But two, years of really

working this portfolio and making leadership changes. We eliminated a segment we

didn't feel was our power zone. We have returned to the power alleys of the things that

make the firm really extraordinary in its performance. And we made some other

leadership changes and where we had people that weren't performing up to standard,

they're no longer with the firm. You're now seeing all of that translate through. Again, if

you take the business environment I described, you should see this momentum carry into

'25. You should see monetization continue to pick up and performance continue to pick

up.

As I said, you saw growth. The 2 U.S. Bio Funds last quarter, I think they were up 7%,

8%. The 2 Asia Bio Funds were up 8%, 9%, the 2 largest funds, and so there's a lot of

momentum in corporate private equity. And then at the end of next year, you'll see us

launch our wealth product in private equity and I think there will be a huge demand for

that.

Alex Blostein:

Great. All right. We'll touch on that in a minute as well, but I wanted to touch on private

credit before we get into wealth. It's been the faster growth area within alternative asset

managers over the last couple of years. Asset-backed finance in private investment grade

has really kind of emerged as the next leg of growth for this market, aside from just direct

lending, which I think is what most people are used to thinking about when they hear

private credit. Now Carlyle has some unique capabilities within here, really with respect

to originating partnerships with other financial institutions. You have your aircraft

financing business. Talk to us a little bit about the vision for private credit over the next

couple of years. How much investment do you still need to make to help you achieve

these goals?

Harvey Schwartz:

Again, the largest portion of the platform is what we call credit insurance. We have an

affiliate relationship with Fortitude, a reinsurer which was formed in 2018. That's grown

to over $100 million of assets since then. And I think when we start thinking about

private credit, and I think you said it perfectly, Alex, direct lending has gotten a

disproportionate amount of headline attention because of the fact that private credit has

grown. And I think the story sometimes doesn't get told accurately because there's this

almost a sense of, well, private credit just arrived on the scene.

That's really not the case. If you go back 15, 20 years, you can see the emergence of

private credit, and all that's happened is natural forces for people seeking capital and best

providers of that capital have been private credit providers. And so now we're seeing this

next evolution in credit which I really think we just need to start thinking about in terms

of private investment grade. And I do think these lines are blurring now, where instead of

thinking private credit or private investment grade, we should really just be talking about

provision of capital.

And whereas institutions like Carlyle with great liability structures, how we can provide

that capital. And that now has -- and these sort of natural evolutions in how capital

formation works in the ecosystem of finance, you're just seeing this extension now where

you have people that need capital. In this case it's asset-based finance, one of the largest

markets, and cap -- traditional capital providers not able to provide that capital. And so,

you saw that we did one of the largest transactions of the year, the Discover Card

transaction. And why is that Carlyle, where historically maybe 8-10 years ago, that

wouldn't be the case? It's because we have the right resources. The right people, the right

understanding of that risk. We have a relationship with Monogram which provides

services to student loan companies. And that gives us all the pieces in the toolkit to

deliver this transaction. And it's a $10 billion transaction. Of course, it does all the other

things. It creates this flywheel effect around capital market fees, but most importantly,

our investors wanted access to that return. This is the key.

If the key is, on one side you have people in need of capital, and on the other side you

have clients -- by the way, this ranges from wealth all the way through to institutions

globally around the world, who want to be providers of that capital. And of course, this

also ties in with insurance, and so you have this convergence of events, which is naturally

creating this flywheel effect for the whole industry. And I don't -- I think, look, the world

can change. We could be sitting here a year or 2 from now and things could look

dramatically different, but these seem quite fundamental in terms of the evolution of how

capital can be provided to these sectors. And we're super well positioned. We've been

adding resources during the course of the year, but I feel really good about the resource

commitment.

If you actually look back, I think you would say to us in direct lending we're smaller than

some of the peer groups. There's a lot of reasons for that, but the performance is quite

good, and so that business will continue to grow. It's a bit more commoditized now, that

segment of the marketplace, but it's a very important part of the whole solution set that

one needs to be if you're going to be a scale provider in credit.

Alex Blostein:

And in terms of I guess incremental investments that you still need to make in that

business, especially when it comes to things origination and getting proprietary deal flow,

how are you positioned on that? Are you fully built out or do you still need to continue to

add resources there?

Harvey Schwartz:

No. You know, we announced a number of partnerships in the past 6 months. We will be

selective. What we want to make sure we're doing is that we're not -- you don't want to be

too isolated to one sector of the market. What do I mean by that? You don't want -- you

have to have expertise obviously in your underwriting capability, but you don't want to be

overly dependent on a particular sector. You have to have enough diversification to

ensure that you have the proper portfolio construction for your investors. And you have

to be really relevant as a capital provider. But no, I think we can continue to grow that.

We will grow that selectively. There are no shortages of people that want to partner with

us, so the Carlyle brand carries a lot of weight there. And the team is excellent. I don't

feel like this is a question of investment.

Where we think about this on the go-forward is, how do we strategically partner with

people to accelerate capital formation that these transactions get larger and larger? It's a

really unique opportunity for us because we're a balance sheet lite firm. Some of the peer

group are much balance sheet heavier in terms of big general accounts. And so how we

strategically partner with people to deploy capital gives us an opportunity to build those

relationships also. That's sort of, again, that's on the capital providing side versus the

sourcing side.

Alex Blostein:

You mentioned retail and wealth. Let's spend a couple of minutes on that. Clearly, a very

important topic for the space. It's a really important topic for Carlyle as well. You're

seeing pretty nice momentum there with your secondaries products, CAPM. You

mentioned earlier you're on track to launch private equity wealth product in 2025. Can

you help us frame I guess the opportunity you see for both of these products? And more

importantly, how are you differentiating Carlyle in the space given the fact it's become a

little more crowded? The TAM is large, but we've clearly seen a lot of players come into

the space over the last few years.

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December 10, 2024

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Harvey Schwartz:

If we take a step back and you just think about strategically first principles and just an

opportunity set. And the way I think about it is, on the one hand you have what is your

solution set that you can provide, whether it's private credit, private equity, secondaries.

What is the suite of solutions that your investors want? And on the other spectrum, you

would think about who are the providers of those capital and how can you best solve their

solution set? And I personally think, again, the world could change, but over the next 10

years, the wealth channel doesn't feel crowded to me. I think this is a trajectory for the

industry which could go on for well over a decade plus.

We have partnerships around the world. We were the first to announce a partnership in

Korea for distributing credit to wealthy individuals in Korea. And the opportunities I

think to some degree are endless. It's not so much about the size of the TAM, it's really

about ensuring that you create durable solutions that are high performing. And to the

extent to which you can, you really want this to be, in my opinion, a zero defect space.

You know, you're dealing with a completely different client constituency, and you really

have to make sure that you build systematically, you design your solutions in a way that

makes the most sense for the individual clients. Because sovereign wealth funds are

sovereign wealth funds, and institutions, to some degree, all bring a certain level of

sophistication.

And in this particular case, when you start dealing with wealth and lower entry retail, I

think the level of care one has to apply is not different, but it's understanding your

constituency and their needs, which are uniquely different. And so, this is an area where

we will continue to invest aggressively and where we need to keep investing. But we'll do

it in pace with our derivative, as you said, with our product development. As you said, I

think our Evergreen funds are up 70% year over year. We had close to $2 billion in the

third quarter alone and so there's great momentum. But the most important thing here is

harnessing the brand.

Alex Blostein:

Right.

Harvey Schwartz:

And you haven't done your own study as far as I checked on brand aware, but UBS and

BofA did, and I think Carlyle is --

Alex Blostein:

Be prepared to have a slightly larger retail platform.

Harvey Schwartz:

For Carlyle. No, that wasn't a knock. As of this second, you are my favorite analyst.

Alex Blostein:

For a few minutes on the clock, everybody.

Harvey Schwartz:

Yeah. With a buy rating a little low on the price target. But anyway, that's just my

personal opinion. You can take that for what you want. I think that it's always Blackstone

and Carlyle, one and two. And the firm, strategically a number of years ago, this wasn't a

priority. But this is a very, very significant priority. At one point during the past year, I

would estimate I spent 25%, 30% of my own personal time in the space. I went out and

met with, and maybe this is not interesting to all of you, but just as an anecdote, I've gone

out and met with any number of regional advisory offices, hosted dinners. David

Rubenstein and I, when we launched CAPM, that's our secondaries general fund, he and I

did a whole tour up and down the West Coast at Morgan Stanley and BofA offices. And

so, this is something that is top of the mindshare at the firm for everyone. But excellence

first.

Alex Blostein:

Correct. If you think about the point you made, sort of the suitability and the market

need, you guys obviously have a lot of capabilities outside of private equity, right?

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Should we think about the next steps in this kind of wealth evolution just launching other

products within other sleeves of Carlyle? Or you really need to see these 2 sort of succeed

and get scale before you get out with something else?

Harvey Schwartz:

No, I think it's -- there's a lot in that question. But first of all, there's a flywheel effect. I

think you can approach this a number of different ways. You can try and be all things to

all people. That is not our current approach. Our approach right now is to be targeted with

partners that we work very, very closely with in solution design. And then -- so if I go to

a Morgan Stanley office or a BofA office and I'm meeting with the advisor, I want them

to be in a position, because they've told me this, that when their people are on the phone

with their clients, that they're having Carlyle offering which resonates and can resonate

again. If we come out with CAPM, they can say, oh yeah, I just talked to you about

CTAC a few months ago, now I want to talk to you about CAPM, which in its first year

had a 17% return. And so we want to have and leverage the name familiarity of Carlyle.

Now Carlyle is so global, in theory we could be in all places. That's a very expensive

proposition. This is about how do you scale over an extended period of time in a very

targeted way? Now the building blocks for this, that's why I said there's lot in this

question, the building blocks in this are first of all, what is the solution set that the clients

want? Most importantly, I do think there's a tendency in our industry to say, we do this

well, we'll give this to the institutional client or we'll give this to the wealth client. That's

not really I don't think the right way to approach this. The right way to approach this I

think in all cases is to put the client in the center.

For example, we don't have an annuity platform, you know that obviously. We're not a

balance sheet heavy firm. But you could see us easily partner with one or more partners

because the annuity is a wrapper. That's a delivery vehicle. But we have all the building

blocks, and so I think over some period of time, which I'm not going to specify, you'll see

us do all these things. Because it's important to the end client. And then you get the

flywheel effect of the name recognition and the performance. And I think over several

years, this will prove to be -- as a client constituency, I think given the Carlyle brand, one

of our most important initiatives for certain.

Alex Blostein:

Great. Well, you mentioned annuity, so I did want to talk about insurance for a couple of

minutes. Again, another important lane of growth for Carlyle and the rest of the space.

Can you speak to both growth opportunities you see with Fortitude where it sounds like

they're seeing a pretty robust pipeline per kind of your last couple of comments. And

also, when you think about other partnerships that you might seek outside of the Fortitude

partnerships, a caveat to that I guess, those can come in many forms. Curious how you're

thinking about the capital intensity of those partnerships as well. Capital lite has been

kind of the motto and it sounds like you still like the capital lite approach, but is there

something that at the right price at the right time could change that?

Harvey Schwartz:

Okay, this is a big question. Let's just start with insurance. Insurance is really at the

center of Venn diagram of a lot of what's happening in the industry. And I don't mean the

portion about the balance sheet or the annuity business. What I mean is the development

of the regulatory framework globally for insurance clients, the competition that's

occurring in insurance, the growth in the annuity platforms globally with the rise of

interest rates. And all of this has resulted in virtually all insurance companies, certainly

everyone that I speak with, and all the CEOs of insurance companies, evaluating how

they think about their asset management process.

Because if you can provide incremental retuof 25 basis points on an 8x to 10x levered

balance sheet at very minimal risk, it really begins to question the foundation of the 60/40

portfolio construction and how much of the fixed income component should be in

something let's just call it private credit. But I mean private investment grade

predominantly. That's a very fundamental driver.

There are also capital needs, which Fortitude is a solution provider for, in terms of how to

help people optimize their capital. That's the regulatory and growth dynamic in insurance.

For us at Carlyle, it really is at the cross section of everything we do with credit. Because

the insurance clients are growing in significance and importance their desire for asset

management capability. And we have all the resources because of our multiyear

relationship with Fortitude to do the analytics. We can partner, we can do all those things.

Now, in terms of the second half of your question, we can be a capital provider to

insurance companies. They can be wrappers for us. We can simply provide the asset

management relationship. So again, I think this is a fascinatingly interesting space. And

again, I think it'll be quite dynamic over the next couple of years.

The capital lite versus capital heavy, you know obviously I ran trading at Goldman Sachs,

I was the CFO of Goldman Sachs, I know what it's like to have a $1 trillion plus balance

sheet. There's huge advantages and then periodically some challenges with that. I think

that you should look for us to think about the question not, Alex, as capital lite or capital

heavy. But when I think about this question, I think about what's the diversified nature of

funding sources? All of this is about creating a platform where we can deliver excellence

to our clients in a diversified, systematic way. Insurance clients are important. Wealth

clients are important. Institutional clients are important. I have no favorite kids when it

comes to my clients. I just like to understand which of my kids have various issues.

And so when I think about partnerships with insurance entities versus partnerships with

sovereign wealth funds or pension funds, in terms of that, I think what's the nature of

building out a diversified liability structure and what is the most efficient way to do that?

There's lots of ways to solve for balance sheet and stay predominantly balance sheet lite,

and I think you should expect us to pursue that degree of travel for a while.

Alex Blostein:

Great. All right, let's talk about a couple of other aspects of the business. I want to zoom

in on management fees. One of the key debates for the stock today is probably just the

magnitude of Carlyle's management fee growth over time. And understanding that every

given quarter there could be some volatility and things will kind of bounce around, but

how would you frame the forms of management fee growth algo over the next couple of

years?

Harvey Schwartz:

I feel quite good about it for all the things we discussed. I think that the question mark,

let's just cut to the chase, I think the question mark around the fees management growth is

you see really strong management fee growth in the solutions business. You see really

strong management fee growth in the credit business. Where you saw a pause in

management fee growth was really in the private equity business. A lot of that really was

one portion of the business in Europe where we have changed the leadership and I feel

really good about the trajectory going forward there.

I think, again, we'll come into the market in the end of '25, '26 with our large U.S. buyout

fund. My expectation is that will be larger than its predecessor fund, And so I think,

again, you're going to continue to see this growth in management fees because as I said,

the firm is really well positioned for growth now in terms of the leadership team and

everything we're building. Again, in a quiet year, there's 2 forms of capital market fees,

right? There's the capital market fees that are created transactionally through the

operating activities of the firm, and then there's where you commit your own capital. We

don't commit capital, so we're not looking to compete with Goldman Sachs or JP Morgan

in that business. I know how excellent you are at that. There's a lot of growth just in those

fees alone. And as I said, on a pretty quiet year, we've, with the new systems we put in

place and the focus of the team, in the third quarter we've already passed our best year

ever. I think there's a lot of fee generation capability assuming the environment stays as

is.

Alex Blostein:

Let's talk about the margins a little bit. You guys made a couple of really important

changes as we talked about in the beginning of this conversation with respect to

compensation structure and what that's done to the to the FRE margins and the profile of

the company. FRE margins I think are tracking somewhere in the 47% year to date, so

above the midpoint of the range that you talked about. And that's without monetization

environment kind of firing on all cylinders. Presumably, there's upside to that as you get

further into the monetization cycle. But how do you think about FRE margins, again,

over time as you think about this range that you've provided and what the ultimate

destination could be?

Harvey Schwartz:

We're not going to modify that. We're ahead of the plan, as you pointed out. I think that

something that maybe has been a little bit lost in the discussion around this, which I just

want to point out because I think an extraordinary work has gone on by John and his team

and Lindsey, our COO, collectively across the firm. It's not just a change to the

compensation structure story. It was a complete review of all expense line items, making

adjustments to that, making adjustments to headcount. And they did that in an incredibly

thoughtful and efficient way. That is a big component also of the performance that you're

seeing.

But obviously a big driver is the FRE margin, which is up 1,100 basis points in a year,

which is pretty remarkable. I think there's still upside there. This is not -- at this stage,

this is not an efficiency story. It's a growth story. That's where we're really putting all of

our energy. But we also announced, again, this is all part of the disciplined rethinking of

the financial footings of the firm. We also announced the share repurchase a year ago,

which we still have $900 million left on, and in the firm's history prior to my arrival, the

share count had only gone up and now it's gone down for 2 years, and we see a lot of

value in the stock at these levels. And so you should expect us to keep buying.

Alex Blostein:

Yeah. I guess on that point, just to wrap up the conversation, that is, again, a new leg of

the stool so to speak for Carlyle. To your point, the share count has just gone up for years

and years and now it's on track to be stable to down slightly. How are you thinking about

making this a more meaningful dent in the share count over the next couple of years? Is

the goal to I guess more meaningfully reduce this or largely to kind of offset dilution as

you progress over the next few years?

Harvey Schwartz:

I think it is more modestly shrink the share count, certainly offset dilution. As I said, in

the firm's history, there was only dilution, so we reversed that immediately, particularly

at this value. Again, the currency just looks way too cheap to me. This is your story to tell

really, but at this multiple, there's a lot of value in repurchasing the stock, and so that'll be

our focus for the foreseeable future.

Alex Blostein:

Great. Well, we're right about time, Harvey. Thank you very much, appreciate you

joining us.

Harvey Schwartz:

It's good to be here. Everyone, great to see you. Thank you very much. Happy Holidays

to everybody.

Alex Blostein:

Thank you.