CG · The Carlyle Group Inc.

Asset Management · mkt cap $16.0B · calls: Q1 FY2026 vs Q4 FY2025

46.0 conviction · conf-adj 46

conf –

enthusiasm:21.0 · trend:8 · quantifies:0 · impact:0 · under_radar:14 · credibility:0 · business_impact:4 · disruption:0 · commitment:-4 · confirmation:3

Enthusiasm latest 7 / prev 3 (rising)

Carlyle’s AI narrative sharpened from Q4 (market “AI angst” and CLO/software risk) to Q1 (portfolio adoption, firm-wide data science/AI, investment-process integration). Management is more enthusiastic and operationally specific on Q1, but offers no quantified revenue, cost, or margin impact and explicitly lacks a standout portfolio win. Credibility is moderate on process and adoption tone; weak on measurable value creation until they tie AI to fund performance, fees, or portfolio KPIs.

PAST (realized)

Q1 FY2026 — Harvey Schwartz: in high-scale automated functions like accounting, lots of processing, rule-based systems, you're starting to see the adoption rate.
Q4 FY2025 — Justin Plouffe: when we invest in software, we've been doing this for many, many years. Right? So we've had disruptive technologies before, and our teams are very, very well positioned to address these.

CURRENT (now)

Q1 FY2026 — Harvey Schwartz: the adoption is steady.
Q1 FY2026 — Harvey Schwartz: we're leaning in very, very heavily into the data science and AI.
Q1 FY2026 — Harvey Schwartz: what's becoming table stakes in terms of how to think about the point of investment, the 360-degree review of where the opportunity set relates to deploying AI, how to think about disruption, how to drive revenues.
Q1 FY2026 — Harvey Schwartz: the momentum is meaningful. The CEO buy-in at the portfolio level is quite high.
Q1 FY2026 — Harvey Schwartz: you're really starting to begin to see efficiencies and productivity gains.
Q4 FY2025 — Harvey Schwartz: they're really just trying to process what the implication is across markets and industries.

FORWARD (guidance)

Q1 FY2026 — Harvey Schwartz: it's going to overall take a little longer than people might expect.
Q1 FY2026 — Harvey Schwartz: it's still a step function change in the way things will operate.
Q4 FY2025 — Harvey Schwartz: What I would say on the AI of things, again, this is more of a broad market. Environmental atmospheric, I think.

TRACK RECORD — PROMISE vs DELIVERY

—/100 (no quantified promises) no-quantified-promises 6 calls reviewed

Across five Carlyle Group earnings calls (Q1 FY2025–Q1 FY2026), management never issued a quantified, time-bound AI, machine-learning, or intelligent-automation target—only brief observational references (e.g., portfolio companies investing in AI infrastructure). Financial and fundraising guidance was delivered or raised, but that is outside the AI scope of this audit.

PRICED-IN (REFINED)

LOW (room left)

Est. revisions falling · Fwd P/E 11.6 · EV/Sales 6.8x

AI claim maps to Fund Management Fee, Performance Allocations, Incentive Fee

Analyst sentiment has softened (holds up to 8 vs 6 in Jan–Apr; bullish ratings down from a March peak), and price targets stair-step lower (last month $51.5 vs quarter $56 vs year $63.9). Forward consensus shows only modest growth (FY25–26 EPS ~4.01→4.04) while fwd P/E ~11.6 is not stretched despite elevated EV/Sales ~6.8. AI-driven efficiency/alpha would most plausibly hit fund fees and carry lines, but revisions and multiples do not yet embed a big AI re-rating—verdict low priced-in.

COVERAGE — ENTHUSIASM TRAJECTORY + CATALYSTS

2Q4 FY20242Q1 FY20252Q2 FY20253Q3 FY20252Q4 FY20252Q1 FY2026

AI enthusiasm across 6 calls — trend → flat

No Carlyle-owned AI story; Q3 alone notes portfolio AI infrastructure spend in macro data.

RECENT AI CATALYSTS & NEWS

2026-04-24 · Acentra Health Chief AI Officer Sean Harrison Named to NVTC AI50
2026-04-05 · A Rare Buying Window Is Opening In Asset Managers
2026-03-16 · This is what investors should AVOID in private credit, Goldman Sachs exec says
2026-03-12 · Private equity firms in talks to form joint AI venture embedding Claude

BUSINESS IMPACT - QUALITATIVE MATERIALITY

5/10 qualitative impact moderate medium-term · soft evidence

Where AI matters: investment diligence & portfolio ops

Carlyle is a real adopter—firm-wide data science, 360° AI/disruption reviews at investment, and steady portfolio productivity in rule-based functions—but management cites no quantified fee, carry, or fundraising uplift and no standout portfolio win, so upside is credible workflow/alpha support, not yet a core P&L driver.

Caveats: No quantified AI impact on fees, carry, or margins despite rising narrative; Portfolio software/CLO and AI-disruption angst are investment risks, not operating wins; Industry fee compression if AI democratizes diligence and LP bargaining strengthens; Benefits may lag hype—management expects adoption slower than the market assumes

AI DISRUPTION / CANNIBALIZATION RISK tailwind · 3/10

Carlyle monetizes scaled capital, relationships, and illiquid private-markets access plus carry on outcomes—not billable analyst hours—so GenAI mainly augments diligence and port-co ops rather than automating away the product; fee-pressure and analytical-edge commoditization are real industry risks but not an existential threat to the alt-asset model near term.

OPTIONS / MARKET STRUCTURE

option liquidity: fair

ATM IV

—

TYPICAL BID-ASK

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OPEN INTEREST

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proxy inputs — dollar-ADV $143M · beta 1.887 · px $42.60

source: proxy (no options chain on FMP)
FMP /stable/ exposes no options-chain endpoint on this key, so ATM IV, bid-ask spread and open interest are unavailable. Liquidity below is a PROXY from dollar-ADV, beta and price level (a stand-in for option depth), not measured option-market data.

CONFIRMATION — INSIDERS · 13F · LANGUAGE

Mixed — insiders selling, institutions adding, management language 1/10 hedged.

INSIDERS selling 2 open-market sell(s) vs 0 buy(s) — net distribution

INSTITUTIONS (13F) adding as of 2026-03-31: 77 new / 102 closed positions; 309 increased / 195 reduced; institutional ownership -2.75pp; -22 net 13F holders

MGMT LANGUAGE 1/10 hedged Provided Q1 FY2026 transcript has zero AI/ML/automation statements about Carlyle's own operations; topic absent.

VERBATIM AI QUOTES

“I would say that I would say the adoption is steady. I think where obviously you've seen it is where sectors where we're not as exposed, obviously, in software and things like that, I think, obviously, in high-scale automated functions like accounting, lots of processing, rule-based systems, you're starting to see the adoption rate.”
— Harvey Schwartz, Q1 FY2026

“I would say across the firm taking a step back, we're leaning in very, very heavily into the data science and AI, and I would call sort of what's becoming table stakes in terms of how to think about the point of investment, the 360-degree review of where the opportunity set relates to deploying AI, how to think about disruption, how to drive revenues. And so all that's becoming table stakes.”
— Harvey Schwartz, Q1 FY2026

“I don't have any specific story to share with you that I would call sort of earth shattering, but I would say the momentum is meaningful. The CEO buy-in at the portfolio level is quite high.”
— Harvey Schwartz, Q1 FY2026

“And obviously, with the advances that the models are coming out with, literally almost feels weekly it gives you the opportunity to obviously engage a level where you're really starting to begin to see efficiencies and productivity gains. But I think it's going to overall take a little longer than people might expect, but it's still a step function change in the way things will operate.”
— Harvey Schwartz, Q1 FY2026

“What I would say on the AI of things, again, this is more of a broad market. Environmental atmospheric, I think. I mean, again, we've seen the fragility in the markets. I think they're really just trying to process what the implication is across markets and industries.”
— Harvey Schwartz, Q4 FY2025

“when we invest in software, we've been doing this for many, many years. Right? So we've had disruptive technologies before, and our teams are very, very well positioned to address these.”
— Justin Plouffe, Q4 FY2025

ANALYST QUESTIONS ON AI

Q (Q1 FY2026, Michael Cyprys (Morgan Stanley)): I wanted to ask about AI deployment across the portfolio of companies. Just curious where you're seeing any sort of AI-driven revenue uplift versus cost savings in the portfolio, how you might quantify any of the benefits you're seeing so far? And your expectations as you look out in terms of AI as a source of value creation. Maybe you could talk about how easy it is, what's hard and any sort of lessons learned from adoption so far?
A: Schwartz: adoption is steady; more visible in sectors Carlyle is less exposed to (e.g. software) and in high-scale automated/rule-based functions (e.g. accounting, processing); firm is leaning heavily into data science and AI; at investment, a 360-degree AI/disruption/revenue review is becoming table stakes; no earth-shattering portfolio story yet but momentum is meaningful and CEO buy-in is high; model advances (almost weekly) are starting to show efficiencies and productivity gains; benefits will take longer than many expect but still a step-function change in how things will operate.

Q (Q4 FY2025, Kenneth Worthington (JPMorgan)): How is 2026 looking for The Carlyle Group Inc. here? For CLOs sort of inside and outside the U.S.? And does the software and AI angst sort of impact the outlook here?
A: Schwartz: on AI, this is broad market / atmospheric; markets are fragile and trying to process implications across markets and industries. Plouffe (CLO/software context): CLO performance among the best; software exposure right on the index; when investing in software, teams have managed disruptive technologies before and are well positioned; does not expect recent volatility to affect CLOs.