The Carlyle Group Inc. (NASDAQ:CG) Q4 2022 Earnings Call Transcript

Curtis Buser: Adam, it’s Curt. I’ll start and then Bill can add in. Look, it’s always difficult to generalize these types of questions across all the different investor classes and everyone. So everyone just take that caveat very seriously as I attempt to address some of this. LP liquidity needs in general were really due to the fact that a number of funds invested and deployed capital very quickly across the industry and have come back for greater needs faster than expectations. And then with the slowing down of the equity capital markets in particular, just as we’re talking about buyout in general, that has put some liquidity needs on some investors, not necessarily all. I mean, there are parts of the world, Middle East, in particular, where I don’t think that those needs are as apparent as in other places.

On the denominator effect, look, there were some green shoots early in the year in terms of potential changes with that, some resetting. I think that, that will get better over the course of the year. But again, it comes back to each individual investor type and how they’re viewing it. And so I think that, that will play out. And also, again, all investors are going to be seeking yield. And I think alternative assets is a great place to seek yield. This industry has proven well and it’s just generally done better. And so it’s more about getting them all access to this. And then the new year, yes, that has an impact on, again, certain LPs in their allocations and how they work with their own investment committees. And yes, it is an impact for some.

But again, in terms of quantifying on a broader basis, really tough to kind of do. So I don’t know if Bill is going to add anything?

William Conway: Well, I would say, I can’t break it down by category in terms of what the impact is going to be. I think it’s going to be better than it was last year. I do think that the LP liquidity creates an opportunity for Carlyle. We have a big solutions business of about $70 billion. And both in secondaries, primaries, co-investment, I think there’s going to be a lot of opportunity there, perhaps in some ways, offsetting some of the primary opportunity as LPs either reposition their portfolio or need liquidity for some reason, as Curt pointed out, not so much in some parts of the world, but in others.

Operator: And I’m not showing any further questions at this time. I’d like to turn the call back over to Daniel Harris for ready for closing remarks.

Daniel Harris: Thank you all for your time and interest this morning. We look forward to talking with you again next quarter. Should you have any follow-up questions after the call, feel free to reach out to Investor Relations at any time. Thank you.

Operator: Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect, and have a wonderful day.