Carlyle Group Inc

Risks Related to Our Company

Adverse economic and market conditions and other events or conditions throughout the world could negatively impact our

business in many ways, including by reducing the value or performance of the investments made by our investment funds

and reducing the ability of our investment funds to raise capital, any of which could materially reduce our revenue,

earnings, and cash flow and adversely affect our financial prospects and condition.

Our business and the businesses of the companies in which we invest are materially affected by conditions in the

global financial markets, and economic conditions or other events throughout the world that are outside of our control,

including, but not limited to, changes in interest rates, availability and cost of credit, inflation rates, availability and cost of

energy, economic uncertainty, slowdown in global growth, changes in laws (including laws relating to taxation and regulations

on the financial industry), disease, pandemics or other severe public health events, trade barriers, commodity prices, currency

exchange rates and controls, national and international political circumstances (including government shutdowns, wars, terrorist

acts or security operations), geopolitical tensions and instability, social unrest, supply chain pressures, and the effects of climate

change. Over the last several years, markets have been affected by the COVID-19 pandemic, significant increases in U.S.

interest rates, inflationary pressures, heightened geopolitical tensions (including those between the U.S. and China, China and

Taiwan, Israel and Hamas, and between Russia and Ukraine), the imposition of export controls and trade barriers, the

imposition of economic and political sanctions (upon specific individuals or companies and country, industry and sector wide

restrictions), ongoing trade negotiations with major U.S. trading partners, and changes in U.S. tax regulations.

In this respect, our investment funds focused on Asia, and portfolio companies within non-Asia investment funds with

significant operations or connectivity and reliance on Asia companies, and listed securities or debt instruments of companies or

industries, could be impacted by any disruptions to the global supply chain that may result from escalating tensions, disputes, or

potential conflicts in the region surrounding the Taiwan Strait. The resulting actions taken, the response of the international

community, and other factors affecting trade with China or political or economic conditions in Taiwan could disrupt the

manufacture of multiple business critical products or hardware components, including specifically semiconductors and these

events may impact entire sectors and industries regardless of their business proximity to the Taiwan Strait. For example, in the

event that such conditions impact suppliers, contract manufacturers, logistics providers, and/or distributors, this could lead to

adverse business and trading conditions, including material and long-term increases in the cost of materials, higher shipping and

transportation rates, and material impacts or delays on the delivery of products to and from impacted regions, which could

adversely affect the business and operations of portfolio companies within and outside Asia, including their revenues and

financial results. These conditions, events, and factors are outside our control and may affect the level and volatility of

securities prices and the liquidity and the value of investments, and we may not be able to or may choose not to manage our

exposure to them. In the event of a market downturn, each of our businesses could be affected in different ways.

Over the twelve months ending on December 31, 2023, the S&P 500 rose by 24.2%, while the MSCI All Country

World Index (MSCI) increased by 20.1%. Global markets strengthened despite persistent inflation, hawkish monetary policy,

andgeopolitical concerns, such as Russia’s ongoing war with Ukraine. However, aggressive and synchronized tightening by

central banks has posed an elevated risk to further global expansion, as positive impulses are likely to fade due to the time lags

in which monetary policy affects economic activity and inflation. While policy rates have likely reached their terminal level,

market participants remain uncertain about how long interest rates will stay near current levels. Central banks have reiterated

that, although underlying macroeconomic conditions have moderated, inflation remains elevated above targets. Factors that

impact global markets, including inflation, interest rates, regulatory, and political environments, can be unpredictable and

investor sentiment could change quickly in the future while market volatility could accelerate in the face of negative macro or

geopolitical developments. If global markets become unstable, it is possible sellers of assets may readjust their valuations and

attractive investment opportunities may become available. On the other hand, the valuations of certain assets we planned to sell

in the near future could be negatively impacted, as well as the valuations of our portfolio companies and, as a result, our

accrued performance revenues.

Market volatility could adversely affect our fundraising efforts in several ways. Investors often allocate to alternative

asset classes (including private equity) based on a target percentage of their overall portfolio. If the value of an investor’s

portfolio decreases as a whole, the amount available to allocate to alternative assets (including private equity) could decline. In

addition, investors often evaluate the amount of distributions they have received from existing funds when considering

commitments to new funds. Investors may also weigh the likely impact of geopolitical tensions, cross-border regulations, and

other factors such as general market volatility and/or a reduction in distributions to investors when considering their allocations

to new investment funds. A decrease in the amount an investor commits to our funds could have an impact on the ultimate size

of our funds and amount of management fees we generate.

The availability and cost of financing for significant acquisition and disposition transactions could be impacted if

equity and credit markets experience heightened volatility. For example, in the United States, market volatility persisted

throughout 2023, as persistently high inflation motivated the U.S. Federal Reserve to continue raising short-term interest rates.

Over the twelve months ending December 31, 2023, 10-year Treasury yields were volatile, peaking at 110 basis points (bps)

higher than year-end 2022, but ultimately ending the year at the same level, and high yield credit spreads remained wide at 339

bps. Obtaining financing in both the high yield bond market and the leveraged loan market is currently challenging. If credit

markets weaken further in the future, it is possible that we and our investment funds may not be able to consummate significant

acquisition and disposition transactions on acceptable terms or at all if we or our funds are unable to finance these types of

transactions on attractive terms or if the counterparty to the transaction is unable to secure suitable financing.

Global merger and acquisition volume totaled $2.9 trillion in 2023, a 21% decline from 2022. If there is a continued

slowdown in global merger and acquisition activity due to the lack of availability of suitable financing or an increase in risk

aversion and uncertainty, this could cause a slowdown in our investment pace, which in turn could have an adverse impact on

our ability to generate future performance revenues and to fully invest the available capital in our funds and reduce

opportunities to exit and realize value from our fund investments. A slowdown in the deployment of our available capital could

impact the management fees we earn on those carry funds and managed accounts that generate fees based on invested (and not

committed) capital. A slowdown in the deployment of our available capital could also adversely affect our ability to raise and

the timing of raising successor investment funds. In 2023, we invested nearly$20 billion through our carry funds.

The current U.S. political environment and the resulting uncertainties regarding actual and potential shifts in U.S.

foreign investment, trade, taxation, economic, environmental, and other policies under the current administration, as well as the

impact of geopolitical tension, such as a deterioration in the bilateral relationship between the United States and China or a

further escalation in conflict between Russia and Ukraine or Israel and Hamas, could lead to disruption, instability, and

volatility in the global markets, which may also have an impact on our exit opportunities across negatively impacted sectors or

geographies. The consequences of previously enacted legislation could also impact our business operations in the future. For

example, bipartisan legislation enacted in August 2018 has significantly increased and may continue to significantly increase

the number and types of investment transactions that are subject to the jurisdiction of the Committee on Foreign Investment in

the United States (“CFIUS”). Under the final regulations implementing the reform legislation, which became effective in

October 2020, CFIUS has the authority to review, and potentially recommend that the President unwind, block, or impose

conditions on certain non-controlling foreign investments in U.S. businesses that deal in certain ways with “critical

technology,” “critical infrastructure,” and/or “sensitive personal data” of U.S. citizens (as those terms are defined in the

regulations). CFIUS’ expanded jurisdiction may reduce the number of potential buyers of and investors in U.S. companies and,

accordingly, may limit the ability of our funds to realize value and/or exit from certain existing and future investments. Our

flexibility in structuring or financing certain transactions may likewise be constrained and we are unable to predict whether and

to what extent uncertainty surrounding economic and market conditions or adverse conditions or events in particular sectors

may cause our performance to suffer. The current administration may also pursue tax policies seeking to increase the corporate

tax rate and further limit the deductibility of interest and compensation, or materially alter the taxation of capital gains, among

other things. Such changes could materially increase the taxes imposed on us or our funds’ portfolio companies. See “Risks

Related to Taxation—Changes in relevant tax laws, regulations, or treaties or an adverse interpretation of these items by tax

authorities could negatively impact our effective tax rate, tax liability, and/or the performance of certain funds should

unexpected taxes be assessed to portfolio investments (companies) or fund income.” In addition, negative public sentiment

could lead to heightened scrutiny and criticisms of our business and investments.

During periods of difficult market conditions or slowdowns (which may occur across one or more industries or

geographies), our funds’ portfolio companies may experience adverse operating performance, decreased revenues, financial

losses, credit rating downgrades, difficulty in obtaining access to financing, and increased funding costs. Negative financial

results in our funds’ portfolio companies may result in less appreciation across the portfolio and lower returns in our funds.

Because our investment funds will generally make a limited number of investments, and such investments generally involve a

high degree of risk, negative financial results in a few of an investment fund’s portfolio companies could severely impact the

fund’s total returns. This could materially and adversely affect our ability to raise new funds as well as our operating results and

cash flow. During such periods of weakness, our funds’ portfolio companies may also have difficulty expanding their

businesses and operations or meeting their debt service obligations or other expenses as they become due, including expenses

payable to us. In addition, such negative market conditions could potentially result in a portfolio company entering bankruptcy

proceedings, or in the case of certain real estate funds, the abandonment or foreclosure of investments, thereby potentially

resulting in a complete loss of the fund’s investment in such portfolio company or real assets and a significant negative impact

to the fund’s performance and consequently our operating results and cash flow, as well as to our reputation. Negative market

conditions could also increase the risk of default with respect to investments held by our funds that have significant debt

investments, such as our Global Credit funds. Moreover, as capital markets activity slows, we may experience a corresponding

reduction in the capital markets fees we earn through Carlyle Global Capital Markets (“GCM”) in connection with activities

related to the underwriting, issuance, and placement of debt and equity securities.

In addition, during periods of difficult market conditions or slowdowns, the valuations of the investments in our carry

funds could suffer. If we were to realize investments at these lower values, we may not achieve investment returns in excess of

return hurdles required to realize performance revenues or we may become obligated to repay performance revenues previously

received by us. The payment of less or no performance revenues could cause our cash flow from operations to significantly

decrease, which could materially and adversely affect our liquidity position and the amount of cash we have on hand to conduct

our operations and to dividend to our stockholders. The generation of less performance revenues could also impact our leverage

ratios and compliance with our term loan covenants. Having less cash on hand could in turn require us to rely on other sources

of cash (such as the capital markets, which may not be available to us on acceptable terms or at all) to conduct our operations,

which include, for example, funding significant general partner and co-investment commitments to our carry funds. In addition,

during adverse economic and market conditions, we may not be able to renew or refinance all or part of our credit facility or

find alternate financing on commercially reasonable terms. As a result, our uses of cash may exceed our sources of cash,

thereby potentially affecting our liquidity position.

Another pandemic or global health crisis like the COVID-19 pandemic may adversely impact our performance and results of

From 2020 to 2022, in response to the COVID-19 pandemic, many countries took measures to limit the spread of the

virus, including instituting quarantines or lockdowns, imposing travel restrictions, and vaccination mandates for certain workers

or activities and limiting operations of certain non-essential businesses. Such restrictions caused labor shortages and disrupted

global supply chains, which contributed to prolonged disruption of the global economy. A widespread reoccurrence of

COVID-19, or the occurrence of another pandemic or global health crisis, could increase the possibility of periods of increased

restrictions on business operations, which may adversely impact our business, financial condition, results of operations,

liquidity, and prospects materially, and exacerbate many of the other risks discussed in this “Risk Factors” section.

In the event of another pandemic or global health crisis like the COVID-19 pandemic, our funds’ portfolio companies

may experience decreased revenues and earnings, which may adversely impact our ability to realize value from such

investments and in turn reduce our performance revenues. Investments in certain sectors, including hospitality, location-based

entertainment, retail, travel, leisure, and events and, in certain geographies, office and residential, could be particularly

negatively impacted, as was the case during the COVID-19 pandemic. Our funds’ portfolio companies may also face increased

credit and liquidity risk due to volatility in financial markets, reduced revenue streams and limited access or higher cost of

financing, which may result in potential impairment of our or our funds’ investments. In addition, borrowers ofloans, notes,

and other credit instruments in our credit funds’ portfolios may be unable to meet their principal or interest payment obligations

or satisfy financial covenants, and tenants leasing real estate properties owned by our funds may not be able to pay rents in a

timely manner or at all, resulting in a decrease in value of our funds’ credit and real estate investments. In the event of

significant credit market contraction as a result of a pandemic or similar global health crisis, certain of our funds may be limited

in their ability to sell assets at attractive prices or in a timely manner in order to avoid losses and margin calls from credit

providers. In our liquid investment vehicles, such a contraction could cause investors to seek liquidity in the form of

redemptions from our funds, adversely impacting management fees. Our management fees may also be negatively impacted if

we experience a decline in the pace of capital deployment or fundraising.

In addition, a pandemic or global health crisis may pose enhanced operational risks. For example, our employees may

become sick or otherwise unable to perform their duties for an extended period, and extended public health restrictions and

remote working arrangements may impact employee morale, integration of new employees, and preservation of our “One

Carlyle” culture. Remote working environments may also be less secure and more susceptible to hacking attacks. Moreover, our

third-party service providers could be impacted by an inability to perform due to pandemic-related restrictions or by failures of,

or attacks on, their technology platforms.

Our use of leverage may expose us to substantial risks.

We periodically use indebtedness as a means to finance our business operations, which exposes us to risks associated

with using leverage. We are dependent on financial institutions extending credit to us on reasonable terms to finance our

business. There is no guarantee that financial institutions will continue to extend credit to us or will renew the existing credit

agreements we have with them on as favorable terms or at all, or that we will be able to refinance our outstanding notes or other

obligations when they mature. In addition, the incurrence of additional debt in the future could result in downgrades of our

existing corporate credit ratings, which could limit the availability of future financing and/or increase our cost of borrowing. As

borrowings under our credit facility or any other indebtedness mature, we may be required to refinance them by entering into a

new facility or issuing additional debt, which could result in higher borrowing costs, or to issue additional equity, which would

dilute existing stockholders. In addition, we could repay them by using cash on hand, cash provided by our continuing

operations, or cash from the sale of our assets, which could reduce dividends to our stockholders. We could also have difficulty

entering into new facilities or issuing debt or equity securities in the future on attractive terms, or at all.

From time to time, we may access the capital markets by issuing debt securities. In 2021, we issued $500 million

aggregate principal amount of 4.625% subordinated notes due May 2061. We also have senior notes with an aggregate principal

amount of$1,375.0 million as of December 31, 2023, as well as a credit agreement that provides a $1.0 billion revolving

facility with a final maturity date of April 29, 2027 (see Note 7 to the consolidated financial statements in Part II, Item 8 of this

Annual Report on Form 10-K for more information regarding our senior and subordinated notes and credit agreements). The

credit agreement contains financial and non-financial covenants with which we need to comply to maintain access to this source

of liquidity. Noncompliance with any of the financial or non-financial covenants without cure or waiver would constitute an

event of default, and an event of default resulting from a breach of certain financial or non-financial covenants could result, at

the option of the lenders, in an acceleration of the principal and interest outstanding, and a termination of the credit agreement.

In addition, to the extent we incur additional debt relative to our current level of earnings or experience a decrease in our level

of earnings, our credit rating could be adversely impacted, which would increase our interest expense under our credit facility.

Standard & Poor’s and Fitch both affirmed our “A-” credit rating with a stable rating outlook in November 2023 and October

2023, respectively.

A significant contraction in the market for debt financing or other adverse change relating to the terms of debt

financing, including rapidly increasing interest rates from U.S. Federal Reserve actions and equity requirements and more

restrictive covenants, could have a material adverse impact on our business and that of our investment funds and their portfolio

companies.

Since January 1, 2022, U.S. banks have not been allowed to issue any new debt tied to the London Interbank Offered

Rate (“LIBOR”). The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering

committee comprised of large U.S. financial institutions, formally recommended the Secured Overnight Financing Rate

(“SOFR”) as its preferred alternative rate for LIBOR. We have amended our credit agreements and related loan documentation,

as well as our CLOs, to reference SOFR. At this time, it is not possible to predict the full effect that the discontinuance of

LIBOR, or the establishment of alternative reference rates such as SOFR, will have on us or our borrowing costs. SOFR is a

relatively new reference rate and its composition and characteristics are not the same as LIBOR. Given the limited history of

SOFR and potential volatility as compared to other benchmark or market rates, the future performance of SOFR cannot be

predicted based on historical performance. The consequences of the transition from LIBOR to SOFR could include an increase

in the cost of our variable rate indebtedness.

Our revenue, earnings, net income, and cash flow can all vary materially, which may make it difficult for us to achieve

steady earnings growth on a quarterly basis.

Our revenue, earnings, net income, and cash flow are variable. For example, our cash flow fluctuates because we

receive carried interest from our carry funds only when investments are realized and achieve a certain preferred return. We may

also experience fluctuations in our quarterly and annual results, including our revenue and net income, due to a number of other

factors, including changes in the carrying values and performance of our funds’ investments that can result in significant

volatility in the carried interest that we have accrued (or as to which we have reversed prior accruals) from period to period, as

well as changes in the amount of distributions, gains, dividends, or interest paid in respect of investments in our funds and

strategic investments (e.g., our investment in Fortitude), changes in our operating expenses, the degree to which we encounter

competition, and general economic and market conditions. The valuations of investments made by our funds could also be

impacted by geopolitical conflict as well as changes, or anticipated changes, in government policy, including policies related to

tax reform, financial services regulation, international trade, immigration, environmental, healthcare, labor, infrastructure, and

energy. The carrying value of fund investments, particularly the public portion of ourcarry fund portfolios, may be more

variable during times of market volatility. As of December 31, 2023,5% of our Global Private Equity carry fund portfolio was

in public securities. Rising interest rates and continued margin contraction, coupled with restrictions on the deductibility of

interest expense, may negatively impact the performance and valuation of our portfolio investments and companies going

forward.

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, to a lesser extent, third-party clients. Capital

markets fees generated are typically dependent on transaction frequency and volume, and a slowdown in market activity could

adversely affect the amount of fees generated by capital markets business. We are seeking to bolster and grow our capital

markets business, and associated fee stream, related to the underwriting, issuance, and placement of debt and equity securities

and loan syndication for our portfolio companies and, to a lesser extent, third-party clients, which we expect, if successful, will

positively impact capital markets fees over time. We also earn transaction fees in respect of our carry funds that are generally

shared with our fund investors. The recognition of these fees can be volatile as they are primarily generated by investment

activity within our funds, and therefore are impacted by both the pace and size of our carry fund investments.

Higher fundraising activity may generate incremental expenses and, as new capital commitments may not immediately

generate fees until they activate management fees, we could incur fundraising related costs ahead of generating revenues. In

addition, a downturn in the equity markets may make it more difficult to exit investments by selling equity securities at a

reasonable value. If we were to have a realization event in a particular quarter, that event may have a significant impact on our

quarterly results and cash flow for that particular quarter and may not be replicated in subsequent quarters. We cannot predict

precisely when, or if, realizations of investments will occur, where a fund will be in its lifecycle when the realizations occur, or

whether a fund will realize carried interest.

We recognize revenue on investments in our investment funds based on our allocable share of realized and unrealized

gains (or losses) reported by such investment funds, and a decline in realized or unrealized gains, or an increase in realized or

unrealized losses, would adversely affect our revenue, which could further increase the volatility of our quarterly results and

cash flow. Because our carry funds have preferred investor return thresholds that need to be met prior to us receiving any

carried interest, declines in, or failures to increase sufficiently the carrying value of, the investment portfolios of a carry fund

may delay or eliminate any carried interest distributions paid to us with respect to that fund. This is because the value of the

assets in the fund would need to recover to their aggregate cost basis plus the preferred return over time before we would be

entitled to receive any carried interest from that fund or vehicle.

The timing and receipt of realized carried interest also varies with the life cycle of our carry funds and there is often a

difference between the time we start accruing carried interest for financial reporting purposes and the realization and

distribution of such carried interest. However, performance revenues are ultimately realized when an investment is profitably

disposed of, certain costs borne by the limited partner investors have been reimbursed, the investment fund’s cumulative net

returns are in excess of the preferred return, and we have decided to collect carried interest rather than return additional capital

to limited partner investors. In deciding to realize carried interest we consider such factors as the level of embedded valuation

gains, the portion of the fund invested, the portion of the fund returned to limited partner investors, the length of time the fund

has been in carry, and other qualitative measures. In most funds, we will initially defer realizing carried interest even when

contractually entitled to take it, allowing carried interest to accrue until it is determined that giveback risk is substantially

reduced. As a result of this deferral, we are generally entitled to a disproportionate “catch-up” level of profit allocation at some

point during the harvesting period. In certain circumstances, we may also need to reduce the rate at which we realize carried

interest, or temporarily stop realizing carried interest, in order to maintain a sufficient level of reserves and reduce the risk of

potential future giveback obligations. In addition to the timing uncertainty of realized carried interest in a single fund, there may

also be a generational trough or gap in the realized carried interest of a fund family, as a predecessor fund transitions to its

successor fund. In such cases, even when both the predecessor and successor fund have strong performance and earn carried

interest, the predecessor fund may substantially exit its investment portfolio before the successor fund is in a sufficient position

to begin realizing carried interest. See “Risks Related to Our Business Operations—Risks Related to the Assets We Manage—

Our investors may negotiate to pay us lower management fees and the economic terms of our future funds may be less

favorable to us than those of our existing funds, which could adversely affect our revenues.”

Our fee revenue may also depend on the pace of investment activity in our funds. In many of our carry funds, the base

management fee may be reduced when the fund has invested substantially all of its capital commitments, or the aggregate fair

market value of a fund’s investments is below its cost. We may receive a lower management fee from such funds if there has

been a decline in value or after the investing period and during the period the fund is harvesting its investments. As a result, the

variable pace at which many of our carry funds invest capital and dispose of investments may cause our management fee

revenue to vary from one quarter to the next. In addition, certain funds derive management fees only on the basis of invested

capital whereby the pace at which we make investments, the length of time we hold such investment, and the timing of

dispositions will directly impact our revenues.

The investment period of a fund may expire prior to the raising of a successor fund. Where appropriate, we may work

with our fund investors to extend the investment period, which gives us the opportunity to invest any capital that remains in the

fund. In general, the end of the original investment period (regardless of whether it is extended) will trigger a change in the

capital base on which management fees are calculated from committed capital to invested capital. In some cases, a step-down in

the applicable rate used to calculate management fees may also occur. In addition, we may raise an investment fund and delay

the initiation of fees once a fund is raised to better align our management fee inception date to when we are ready to begin

investing the fund. While the total amount of management fees collected over the life of a fund would not be impacted, this

could result in a delay in receipt of management fees.

Given our focus on achieving superior investment performance and maintaining and strengthening investor relations, we

may reduce our AUM, restrain its growth, reduce our fees, or otherwise alter the terms under which we do business when we

deem it in the best interest of our investors—even in circumstances where such actions might be contrary to the near-term

interests of our stockholders.

From time to time if we decide it is in the best interests of stakeholders, we may take actions that could reduce the

profits we could otherwise realize in the short term. While we believe that our commitment to treating our investors fairly is in

the long-term interest of us and our stockholders, our stockholders should understand we may take actions that could adversely

impact our short-term profitability, and there is no guarantee that such actions will benefit us in the long term. The means by

which we seek to achieve superior investment performance in each of our strategies could include limiting the AUM in our

strategies to an amount that we believe can be invested appropriately in accordance with our investment philosophy and current

or anticipated economic and market conditions. In addition, we may seek to exit or end unprofitable or subscale investments,

which may reduce our AUM and/or management fees while generally improving our FRE margins. We also may voluntarily

reduce management fee rates and terms for certain of our funds or strategies when we deem it appropriate, even when doing so

may reduce our short-term revenue. For instance, in order to enhance our relationship with certain fund investors, we have

reduced management fees or ceased charging management fees on certain funds in specific instances. In certain investment

funds, we have agreed to charge management fees based on invested capital or net asset value as opposed to charging

management fees based on committed capital. In certain cases, we have provided “fee holidays” to certain investors during

which we do not charge management fees for a fixed period of time. We also may receive requests to reduce management fees

on other funds in the future. See “Risks Related to Our Business Operations—Risks Related to the Assets We Manage—Our

investors may negotiate to pay us lower management fees and the economic terms of our future funds may be less favorable to

us than those of our existing funds, which could adversely affect our revenues.”

Many of our investment funds utilize subscription lines of credit to fund investments prior to the receipt of capital

contributions from the fund’s investors. As capital calls made to a fund’s investors are delayed when using a subscription line

of credit, the investment period of such investor capital is shortened, which may increase the net internal rate of return of an

investment fund. However, because interest expense and other costs of borrowings under subscription lines of credit are an

expense of the investment fund, the investment fund’s net multiple of invested capital will be reduced, as will the amount of

carried interest generated by the fund. Any material reduction in the amount of carried interest generated by a fund will

adversely affect our revenues. See “Risks Related to our Company— Adverse economic and market conditions and other events

or conditions throughout the world could negatively impact our business in many ways, including by reducing the value or

performance of the investments made by our investment funds and reducing the ability of our investment funds to raise capital,

any of which could materially reduce our revenue, earnings, and cash flow and adversely affect our financial prospects and

condition.”

We may also take other actions, including waiving management fees for a particular investment or fund, that could

adversely impact our short-term results of operations when we deem such action appropriate. Furthermore, we typically delay

the realization of carried interest to which we are otherwise entitled if we determine (based on a variety of factors, including the

stage of the fund’s life cycle and the extent of fund profits accrued to date) that there would be an unacceptably high risk of

potential future giveback obligations. Any such delay could result in a deferral of realized carried interest to a subsequent

period. See “Risks Related to Our Company— Our revenue, earnings, net income, and cash flow can all vary materially, which

may make it difficult for us to achieve steady earnings growth on a quarterly basis.”

We depend on our senior Carlyle professionals, including our Chief Executive Officer, and the loss of their services or

investor confidence in such personnel could have a material adverse effect on our business, results of operations, and

financial condition.

We depend on the efforts, skill, reputations, and business contacts of our senior Carlyle professionals, including our

Chief Executive Officer, Harvey M. Schwartz, and our other executive officers, the members of the investment committees of

our investment funds and senior members of our investment teams, the information and deal flow they and others generate

during the normal course of their activities, and the synergies among the diverse fields of expertise and knowledge held by our

professionals.

In February 2023, we appointed Mr. Schwartz as our Chief Executive Officer and a member of our Board. As Mr.

Schwartz continues to develop and implement his leadership vision, he may seek additional changes in our business operations

that create uncertainty for our business and investors, including our employees, shareholders, and other stakeholders. In

addition, our executive officers and senior Carlyle professionals are not obligated to remain employed with us in their current

capacities or at all. To continue to enhance our talent base, we have and will continue to hire and internally develop senior

professionals to assume key leadership positions throughout the firm into the future. The availability and efficacy of such future

leadership may constitute an adverse risk to our business.

Our senior Carlyle professionals, including our founders, possess substantial experience and expertise and have strong

business relationships with investors in our funds and other members of the business community. As a result, the loss of these

personnel, including any potential departures or retirements, could jeopardize our relationships with investors in our funds and

members of the business community and result in reduction of AUM or fewer investment opportunities. For example, if any of

our senior Carlyle professionals were to join or form a competing firm, that action could have a material adverse effect on our

business, results of operations, and financial condition. Personnel have left the firm in the past and others may do so in the

future, and we cannot predict the impact that the departure of any key personnel will have on our ability to achieve our

objectives. The loss of the services of any of our key personnel could have a material adverse effect on our revenues, net

income, and cash flow and could harm our ability to maintain or grow AUM in existing funds or raise additional funds in the

future. The governing agreements of many of our investment funds generally require investors in those funds to vote to

continue the investment period in the event that certain “key persons” in our investment funds do not provide the specified time

commitment to the fund or our firm ceases to control the general partner.

Recruiting and retaining our professionals has become more difficult and may continue to be difficult in the future, which

could adversely affect our business, results of operations, and financial condition.

Our most important asset is our people, and our continued success is highly dependent upon the efforts of our senior

Carlyle professionals and other employees. Our future success and growth depends to a substantial degree on our ability to

retain and motivate our senior Carlyle professionals and other employees to strategically recruit, retain, and motivate talented

personnel, including senior Carlyle professionals. The market for qualified professionals is extremely competitive across levels

and areas of expertise, and we may not be successful in our efforts to recruit, retain, and motivate these professionals. There has

also been a shift to a hybrid work model and, in our recruiting efforts, we have seen increased focus by prospective candidates

on remote and hybrid work arrangements and arrangements providing more flexibility, including around location. Although we

have generally moved to a hybrid work model in which many of our employees are permitted to work remotely for a designated

portion of their working time and are expected to come to a Carlyle office for a designated portion of their working time, we

continue to see focus on remote work arrangements. We have also experienced upward pressure on compensation packages

given the increased competition to hire and retain talented personnel, and we may be required to adjust the amount of cash

compensation and types, terms, and amounts of equity incentives we provide to our employees, which could have positive or

negative effects on the financial metrics commonly used to measure our performance. Even when we offer top-of-market

compensation packages, we may not be able to attract and retain all of our desired personnel due to shifting employee priorities.

In addition, the minimum retained ownership requirements and transfer restrictions to which equity incentives are subject in

certain instances lapse over time, may not be enforceable in all cases, and can be waived. There is no guarantee that the

noncompetition and nonsolicitation agreements to which certain of our senior Carlyle professionals are subject, together with

our other arrangements with them, will prevent them from leaving, joining our competitors, or otherwise competing with us. In

addition, there is no assurance that such agreements will be enforceable in all cases. These noncompetition and nonsolicitation

agreements also expire after a certain period of time, at which point such senior Carlyle professionals would be free to compete

against us and solicit our clients and employees. In this respect, in January 2023, the U.S. Federal Trade Commission (“FTC”)

published a proposed rule that, if finally issued, would generally prohibit post-employment noncompete clauses (or other

clauses with comparable effect) in agreements between employers and their employees. We are monitoring the proposed rule

and the impact it may have on our ability to recruit and retain our professionals.

For our investment professionals, we have historically relied in part on their interests in our investment funds’ carried

interest and incentive fees to discourage them from leaving the firm. Effective December 31, 2023, we expect to pay

approximately 60% to 70% of performance allocations and incentive fees to our personnel, which will further tie the financial

interests ofa broader group of our personnel to the success of our investment funds. To the extent our investment funds perform

poorly, thereby reducing the potential for distributions in respect of carried interest and incentive fees, those interests become

less valuable and may become a less effective retention tool. There are also factors beyond our control that may affect our

efforts to recruit, retain, and motivate investment professionals, in particular as they relate to tax considerations regarding

carried interest. The tax treatment of carried interest has been an area of focus for policymakers and government officials in

recent years. For example, the Tax Cuts and Jobs Act (the “TCJA”) enacted in 2017 generally requires that carried interest

satisfy a more-than-three-year holding period (as opposed to a more-than-one-year holding period under prior law) to qualify as

a long-term capital gain that is taxed at preferential rates for individuals. Congress and the current administration may consider

proposals to treat carried interest as ordinary income rather than as capital gain for tax purposes, to impose a surcharge on

carried interest, to further extend the holding period for carried interest to qualify for long-term capital gain treatment, or to

increase the capital gains tax rate, each of which could result in a material increase in the amount of taxes that our carry

participants would be required to pay. While most proposals regarding the taxation of carried interest require realization of

gains before applying ordinary income rates, U.S. federal legislation has previously been introduced that would require holders

of carried interest to recognize a specified amount of deemed compensation income each year regardless of whether the

investment partnership recognizes income or gain and regardless of whether and when the holders receive distributions in

respect of their carried interests. If the tax treatment of carried interest continues to be an area of focus for policymakers and

government officials, it could result in further regulatory action by federal, state, or non-U.S. governments. For example, certain

states, including New York and California, have previously proposed legislation to levy additional state tax on carried interest.

We have seen similar policy discussions in respect of the appropriate treatment of carried interest in many of the international

jurisdictions in which we have investment professionals. The additional pressures of fiscal deficits have heightened these risks

as international authorities consider ways to increase tax revenues. Such legislative and regulatory changes that modify the tax

treatment of carried interest could make it more difficult for us to incentivize, recruit, and retain investment professionals,

which may have an adverse effect on our ability to achieve our investment objectives and thereby reduce the after-tax income

and gain related to our business, our distributions to stockholders, and the market price of our shares.

We have granted and expect to grant equity awardsin respect of our shares of common stock. This includes awards

from our Equity Incentive Plan, with respect to which our shareholders approved an additional 23.8 million shares for the

issuance of awards at our 2023 Annual Meeting of Shareholders, and an award of restricted stock units to our Chief Executive

Officer in connection with his hiring, which were granted outside of the Equity Incentive Plan and with respect to which, as of

December 31, 2023, we have granted a total of approximately 7.1 million restricted stock units (including dividend equivalent

units that are credited on such award). The prior and future grants of equity awards in respect of our shares of common stock

have caused and will cause dilution. While we evaluate the grant of equity awards from our Equity Incentive Plan to employees

on an annual basis, the size of the grants, if any, is made at our discretion and may vary significantly from year-to-year,

including as the result of special programs or significant senior personnel hirings. If we increase the use of equity awards from

our Equity Incentive Plan in the future, expenses associated with equity-based compensation may increase materially. In 2023,

we incurred equity compensation expenses of$249.1 million in connection with grants of restricted stock units. In February

2024, we granted a total of 18.1 million restricted stock units to our personnel, which will increase our equity-based

compensation expense in the coming years. Of these 18.1 million restricted stock units,13.2 million restricted stock units were

granted to senior Carlyle professionals and are eligible to vest in installments over a period of three years based on the

achievement of absolute stock price targets of 120%, 140% and 160% of the applicable starting share price. Following the

foregoing grants, taken together with other restricted stock unit grants since the initial approval of the Equity Incentive Plan in

June 2021, there were 10.1 million remaining shares of common stock available for grant under the Equity Incentive Plan.

As of December 31,2023, our employees held an aggregate of 22.2 million unvested restricted stock units, which vest

over various time periods (generally from one year to four years from the date of grant) and/or subject to the achievement of

various performance targets. All of the shares of common stock held by our founders are fully vested. In order to recruit and

retain existing and future senior Carlyle professionals and other key personnel, we may need to increase the level of

compensation that we pay to them, which could include grants of significant amounts of restricted stock unit awards or other

equity incentive awards under our Equity Incentive Plan. Accordingly, as we promote or hire new senior Carlyle professionals

and other key personnel over time or attempt to retain the services of certain of our key personnel, we may increase the level of

compensation we pay to these individuals, which could cause our total employee compensation and benefits expense as a

percentage of our total revenue to increase and adversely affect our profitability.

We may not be successful in expanding into new investment strategies, geographic markets, and businesses and new types of

investors, which could adversely affect our business, results of operations, and financial condition.

Ourorganizational documents do not limit our ability to enter into new lines of businesses, and we may expand into

new investment strategies, geographic markets, and business and new types of investors we have traditionally not pursued, such

as retail fund investors. In this respect, ourgrowth strategy focuses on providing resources to foster the development of new

product offerings and business strategies by our investment professionals. Given our diverse platform, these initiatives could

create conflicts of interests with existing products, increase our costs, and expose us to new market risks and legal and

regulatory requirements. These products may have different economic structures than our traditional investment funds and may

require a different marketing approach. These activities also may impose additional compliance burdens on us, subject us to

enhanced regulatory scrutiny, and expose us to greater reputation and litigation risk.

The success of our growth strategy will depend on, among other things:

•our ability to correctly identify and create products that appeal to our investors;

•the diversion of management’s time and attention from our existing businesses;

•management’s ability to spend time developing and integrating the new business and the success of the

integration effort;

•our ability to properly manage conflicts of interests;

•our ability to identify and manage risks in new lines of businesses and new types of investors;

•our ability to implement and maintain adequate investment processes, controls, and procedures around our

platforms;

•our ability to obtain requisite approvals and licenses from the relevant governmental authorities and to

comply with applicable laws and regulations without incurring undue costs and delays; and

•our ability to successfully negotiate and enter into beneficial arrangements with our counterparties.

In some instances, we may determine that growth in a specific area is best achieved through the acquisition of an

existing business, or a smaller scale lift out of an investment team to enhance our platform. Our ability to consummate an

acquisition will depend on our ability to identify and value potential acquisition opportunities accurately and successfully

compete for these businesses against companies that may have greater financial resources. Even if we are able to identify and

successfully negotiate and complete an acquisition, these transactions can be complex, and we may encounter unexpected

difficulties or delays or incur unexpected costs.

In addition to the concerns noted above, each individual acquisition transaction presents unique challenges to

ultimately be successful and the success of a firm acquisition will be affected by, among other things:

•difficulties and costs associated with the integration of operations and systems;

•difficulties integrating the acquired business’s internal controls and procedures into our existing control

structure;

•difficulties and costs associated with the assimilation of employees; and

•the risk that a change in ownership will negatively impact the relationship between an acquiree and the

investors in its investment vehicles.

Entry into certain lines of business may subject us to new laws and regulations with which we are not familiar or from

which we are currently exempt, and may lead to increased liability, litigation, regulatory risk, and expense. If a new business

generates insufficient revenue or if we are unable to efficiently manage our expanded operations, our results of operations may

be adversely affected. Moreover, if a new product, business, or venture developed internally or by acquisition is unsuccessful,

we may decide to wind down, liquidate, and/or discontinue it. Such actions could negatively impact our relationships with

investors in those businesses, could subject us to litigation or regulatory inquiries and can expose us to additional expenses,

including impairment charges and potential liability from investor or other complaints.

In August 2022, we acquired Abingworth, a life sciences investment firm, to expand our healthcare investment

platform with the addition of nearly $2 billion in assets under management and a specialized team of over 20 investment

professionals and advisors. The integration of Abingworth with us, and Carlyle’s corresponding entry into the life sciences

industry, may pose some or all of the risks noted above.

Operational risks (including those associated with our business model), system security risks, breaches of data protection,

cyberattacks, or actions or failure to act by our employees or others with authorized access to our networks, including our

ability to insure against such risks, may disrupt our businesses, result in losses, or limit our growth.

We rely heavily on our financial, accounting, information, and other data processing systems. We face various security

threats on a regular basis, including ongoing cybersecurity threats to and attacks on our information technology infrastructure

that are intended to gain access to our proprietary information, destroy data, or disable, degrade, or sabotage our systems. These

security threats originate from a wide variety of sources, including known or unknown external third parties and current or

former employees and contractors who have or had access to our facilities, systems, and information.

There has been an increase in the frequency and sophistication of the security threats we face, with thwarted attacks

ranging from those common to businesses generally to those that are more advanced and persistent, which may target us

because, as a global investment management firm, we hold a significant amount of confidential and sensitive information about

our investors, our portfolio companies, potential investments, and our employees. As a result, we may face a heightened risk of

a security breach, online extortion attempt, or business disruption with respect to this information resulting from an attack by a

variety of bad actors, including hacktivists, cyber criminals, foreign governments, cyber extortionists, or cyber terrorists. If

successful, these types of attacks on our network or other systems could have a material adverse effect on our business and

results of operations due to, among other things, the loss or exposure of investor or proprietary data, the loss or exposure of

personal information that we retain, interruptions or delays in our business, and damage to our reputation. Our suppliers,

contractors, investors, and other third parties with whom we do business also experience cyber threats and attacks that are

similar in frequency and sophistication. Supply chain attacks are increasing in frequency and impact on the businesses they

affect. We do not have continuous visibility into the security of our supply chain entities or the suppliers that service our supply

chain entities and must rely on contractual assurances and the controls and safeguards put in place by our suppliers, contractors,

investors, and other third parties to defend against, respond to, and report such attacks. In certain instances, there are limited

suppliers that can provide a particular service, such as fund administration, and the inability to work with these suppliers or

unavailability of these suppliers could have a material adverse impact on our ability to provide such service.

Those who have or had authorized access to our networks, including current and former employees and contractors,

may introduce vulnerabilities in our systems by user error or if they are the target of “phishing,” social engineering, bribery,

coercion, or harbor malintent toward us. We have therefore implemented a security awareness training program. The objective

of this program is to inform Carlyle personnel and contractors of their responsibility for information security and includes

online training, live awareness events, and phishing simulations. This training is in addition to our existing required onboarding

and annual cybersecurity trainings.

We cannot know the potential impact of future cyber incidents, which vary widely in severity and scale. There can be

no assurance that the various procedures and controls we utilize to mitigate these threats will be sufficient to prevent disruptions

to our systems, especially because the cyber-attack techniques used change frequently or are not recognized until launched, and

because cyber-attacks can originate from a wide variety of sources. If any of the controls we put in place do not operate

properly or are disabled for any reason or if there is any unauthorized disclosure of data, whether as a result of tampering, a

breach of our network security systems, a cyber-incident or attack, or otherwise, we could suffer substantial financial loss,

increased costs, a disruption of our businesses, liability to our funds and investors, regulatory investigations, intervention and

fines, and reputational damage. The costs related to cyber or other security threats or disruptions may not be fully insured or

otherwise indemnified. Significant security incidents at competitor global investment firms in which we are not directly

impacted could indirectly lead to increased costs from investor due diligence, revisions to insurance premiums, and more

extensive and/or frequent regulatory inspections.

Our information systems and technology may not continue to be able to accommodate our growth, and the cost of

maintaining such systems may increase from its current level. For example, our existing systems may not be adequate to

identify or control the relevant risks in investment strategies employed by new investment funds we may introduce. Any failure

to accommodate growth or an increase in costs related to such information systems, could have a material adverse effect on us.

In addition, we rely on third-party service providers for certain aspects of our business, including for certain information

systems and technology and administration of our business development companies, registered investment companies,

structured credit funds, and Global Investment Solutions segment. For example, Carlyle contracts information system backup

and recovery services to certain companies. These third-party service providers have faced and continue to face ongoing

cybersecurity threats and, as a result, unauthorized individuals could improperly gain access to our confidential data. Any attack

on or interruption or deterioration in the performance of these third parties or failures of their information systems and

technology could also impair the quality of the funds’ operations, affect our reputation, and adversely affect our businesses.

Our technology, data, and intellectual property and the technology, data, and intellectual property of our portfolio

companies are also subject to a heightened risk of theft, disruption, or compromise to the extent we and our portfolio companies

engage in operations outside the United States, particularly in those jurisdictions that do not have comparable levels of

protection of proprietary information and intangible assets, such as intellectual property and customer information and records.

In addition, we and our portfolio companies may be required to compromise protections or forgo rights to technology, data, and

intellectual property in order to operate in or access markets in a foreign jurisdiction. Any such direct or indirect compromise of

these assets could have a material adverse consequence on us or our investments.

A disaster or a disruption in the infrastructure that supports our businesses, including a disruption involving electronic

communications or other services used by us or third parties with whom we conduct business, or directly affecting our offices,

could have a material adverse impact on our ability to continue to operate our business without interruption. Our disaster

recovery programs may not be sufficient to mitigate the harm that may result from such a disaster or disruption. For example,

systemic risks such as a massive and prolonged global failure of Amazon or Microsoft’s cloud services could result in

cascading catastrophic systems failures. We may also need to commit additional management, operational, and financial

resources to identify new professionals to join our firm and to maintain appropriate operational and financial systems to

adequately support expansion. The market for hiring talented professionals, including IT and cybersecurity professionals, is

competitive and we may not be able to grow at the pace we desire.

In addition, we and our portfolio companies may not be able to obtain or maintain sufficient insurance (including cyber

insurance) on commercially reasonable terms or with adequate coverage levels against potential liabilities we may face in

connection with potential claims, which could have a material adverse effect on our business. We may face a risk of loss from a

variety of claims, including related to securities, antitrust, contracts, cyber incidents, fraud, business interruption, and various

other potential claims, whether or not such claims are valid. Insurance and other safeguards may only partially reimburse us for

our losses, if at all, and if a claim is successful and exceeds or is not covered by our insurance policies, we may be required to

pay a substantial amount in respect of such successful claim. Because of market conditions, premiums, and deductibles for

certain insurance policies, particularly directors and officers, cyber, and property insurance, have increased substantially and

may increase further and, in some instances, certain insurance may become unavailable or available only for reduced amounts

of coverage. Moreover, the dollar amount of claims and/or the number of claims we experience may also increase at any time,

which may have the result of further increasing our costs.

Certain losses of a catastrophic nature, such as wars, systemic risk associated with cyber-kinetic warfare, earthquakes,

floods, typhoons, pandemics, terrorist attacks, or other similar events may be uninsurable or may only be insurable at rates that

are so high that maintaining coverage would cause an adverse impact on our business, our investment funds, and their portfolio

companies. Losses related to the COVID-19 pandemic have generally been excluded under most business property insurance

policies and business interruption policies and, going forward, will not be covered under new policies. In general, losses related

to terrorism and catastrophic nation-state hacks are becoming harder and more expensive to insure against. In this respect, some

insurers are excluding coverage of terrorist acts and catastrophic nation-state hacks from their all-risk policies. In some cases,

insurers are offering significantly limited coverage against terrorist acts for additional premiums, which can greatly increase the

total cost of casualty insurance for a property. As a result, we, our investment funds, and their portfolio companies may not be

insured or fully insured against terrorism or certain other catastrophic losses.

Our portfolio companies also rely on data and processing systems and the secure processing, storage, and transmission

of information including highly sensitive financial, medical, and critical infrastructure data. A disruption or compromise of

these systems, including from a cyber-attack or cyber-incident, could have a material adverse effect on the value of these

businesses. Our investment funds may invest in strategic assets having a national or regional profile or in infrastructure assets,

the nature of which could expose them to a greater risk of being subject to a terrorist attack or security breach than other assets

or businesses. Such an event may have adverse consequences on our investment or assets of the same type or may require

portfolio companies to increase preventative security measures or expand insurance coverage.

Failure to maintain the security of our information and technology networks, including personally identifiable information,

intellectual property, and proprietary business information, could have a material adverse effect on us.

In the ordinary course of our business, we collect and store sensitive data, including our proprietary business

information and intellectual property, and personally identifiable information of our employees, investors, and potential

investors, in our data centers, on our networks, on our cloud environments, and with our third-party service providers. Such data

may be subject to U.S. and foreign data protection and privacy laws and other contractual obligations. The secure processing,

maintenance, and transmission of this information are critical to our operations. Although we take various measures and have

made, and will continue to make, significant investments to ensure the integrity of our systems and to safeguard against such

failures or security breaches, including mechanisms for governance, strategy, and risk management, there can be no assurance

that these measures and investments will provide adequate protection. In this respect, the COVID-19 pandemic exacerbated

these risks due to heavier and continued reliance on online communication and a hybrid work environment, which may be less

secure, and there has been a significant increase in malicious cyber activity involving ransomware, extortion, and business

email compromise. In 2023, Carlyle experienced no material cyber incidents and responded promptly and effectively to routine

events, such as user errors, phishing campaigns, and vendor breach notifications, resulting in no substantial harm to Carlyle. In

addition, we and our employees have been and expect to continue to be the target of fraudulent calls and emails, the subject of

impersonations, and fraudulent requests for money, including attempts to redirect material payment amounts to fraudulent bank

accounts, and other forms of spam attacks, phishing or other social engineering, supply chain attacks, ransomware, or other

events. We also have been, and could in the future be, the target of a type of wire transfer fraud known as business email

compromise where a third party seeks to benefit from misrepresenting an employee or fund investor by improperly authorizing

a wire transfer or change in wire instructions. While our policies and procedures have been largely effective against this fraud to

date, a significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of investor, employee, or other

personally identifiable or proprietary business data, whether by third parties or as a result of employee malfeasance or

otherwise, noncompliance with our contractual or other legal obligations regarding such data or intellectual property, or a

violation of our privacy and security policies with respect to such data could result in significant remediation and other costs,

fines, litigation, or regulatory actions against us by the U.S. federal and state governments, the European Union, or other

jurisdictions, or by various regulatory organizations or exchanges. Such an event could also disrupt our operations and the

services we provide to investors, damage our reputation, result in a loss of a competitive advantage, impact our ability to

provide timely and accurate financial data, and cause a loss of confidence in our services and financial reporting, which could

adversely affect our business, revenues, competitive position, and investor confidence.

Use of artificial intelligence technology by us could lead to the exposure of our data or other adverse effects and such

technology also may lead to more effective threat actors.

Recent technological advances in artificial intelligence and machine learning technologies (collectively, “AI

Technologies”), including, for example, the OpenAI ChatGPT application, create opportunities for us, our funds, investment

vehicles and accounts, and portfolio companies, as well as risks. We use and plan to expand our use of AI Technologies in

connection with our business and investment activities and our portfolio companies and investments also use such technologies.

We and our portfolio companies continue to evaluate the rapidly evolving landscape of AI Technologies. Actual use of AI

Technologies varies across our business, funds and portfolio companies, and investments. While we expect, from time to time,

to adopt and adjust usage policies and procedures governing the use of AI Technologies by our personnel, there is a risk of

misuse of such AI Technologies.

In addition, AI Technologies are reliant on the collection and analysis of large amounts of data and complex

algorithms. In this respect, it is not possible or practicable to incorporate all relevant data into models that AI Technologies

utilize to operate, nor do we expect to be involved in the collection of such data or development of algorithms in the ordinary

course of our business. Therefore, it is expected that the data in such models will contain a degree of inaccuracy and error,

potentially to a material degree, and that such data and algorithms could otherwise be inadequate or flawed, which would likely

degrade the effectiveness of AI Technologies and could adversely impact us and our portfolio companies and investments to the

extent we or they rely on the work product of such AI Technologies.

The volume and reliance on data and algorithms also make AI Technologies, and in turn us and our portfolio

companies and investments, more susceptible to cybersecurity threats, including data poisoning and the compromise of

underlying models, training data, or other intellectual property. We and our portfolio companies and investments could be

exposed to risks to the extent third-party service providers, or any counterparties use AI Technologies in their business

activities. In this respect, we are not able to control the way third-party products are developed or maintained or the way third-

party services utilizing AI Technologies are provided to us. In addition, AI Technologies may be competitive with the business

of our portfolio companies or increase the potential for obsolescence of a portfolio company’s products or services (particularly

as the capabilities of AI Technologies improve) and, accordingly, the increased adoption and use of AI Technologies may have

an adverse effect on our portfolio companies or their respective businesses. See “Risks Related to Our Company—Operational

risks (including those associated with our business model), system security risks, breaches of data protection, cyberattacks, or

actions or failure to act by our employees or others with authorized access to our networks, including our ability to insure

against such risks, may disrupt our businesses, result in losses, or limit our growth.”

Moreover, use of AI Technologies could include the input of our confidential information (including material non-

public information) by third parties in contravention of non-disclosure agreements or by our personnel or other related parties in

contravention of our policies and procedures (or by any such parties in accordance with our policies, procedures, and/or non-

disclosure agreements) and could result in such confidential information becoming part of a dataset that is generally accessible

by AI Technologies applications and users.

AI Technologies and their current and potential future applications, including in the private investment and financial

sectors, as well as the legal and regulatory frameworks within which they operate, continue to rapidly evolve. It is impossible to

predict the full extent of current or future risks related thereto.

Risks Related to Regulation and Litigation

Laws and regulations relating to privacy, data protection, data transfers, data localization, and data security worldwide may

limit the use and adoption of our services and adversely affect our business.

Legislators and regulators around the world identify data security and privacy as top priorities. As a result, we are

subject to an increasing variety of federal, state, local, and international laws, directives, and regulations, as well as contractual

obligations, relating to the collection, use, retention, security, disclosure, transfer, and other processing of personal information

and other confidential data. The global legal frameworks for privacy, data protection, and data transfers are rapidly evolving

and are likely to remain uncertain for the foreseeable future. Certain of our activities may be subject to the General Data

Protection Regulation (“GDPR”), U.S. state privacy laws, the Cayman Islands Data Protection Act (“DPA”), the UK Data

Protection Act (“UK GDPR”), the Personal Information Protection Law (the “PIPL”), and other existing and developing laws

and regulations.

In February 2022, the SEC proposed rules regarding cybersecurity that would require registered investment advisers

and registered funds to implement written policies and procedures designed to address cybersecurity risks, report significant

cybersecurity incidents to the SEC using a proposed form and within a prescribed time period, and keep enumerated

cybersecurity-related books and records. In addition, in March 2022, the SEC issued a proposed rule, which was finalized in

July 2023, to require public companies to report material cybersecurity incidents on Form 8-K and mandate disclosure of

cybersecurity risk management, strategy, and governance. In light of these proposed and final rules and the focus of federal

regulators on cybersecurity generally in recent years, we expect increasing SEC enforcement activity related to cybersecurity

matters, including by the SEC’s Office of Compliance Inspections and Examinations in its examination programs, where

cybersecurity has been prioritized with an emphasis on, among other things, proper configuration of network storage devices,

information security governance, and policies and procedures related to retail trading information security.

Although we maintain cybersecurity controls designed to prevent cyber incidents from occurring, no security is

impenetrable to cyberattacks. It is possible that current and future cyber enforcement activity will target practices that we

believe are compliant, but the SEC deems otherwise. In addition, many jurisdictions in which we operate have other laws and

regulations relating to data privacy, cybersecurity, data transfers, data localization, and protection of personal information. Our

use of AI technologies could also subject us to additional cybersecurity risks as well as regulatory scrutiny. See “Risk Related

to Our Company— Use of artificial intelligence technology by us could lead to the exposure of our data or other adverse effects

and such technology also may lead to more effective threat actors.”Any regulatory investigation into compliance with these

laws and regulations would be costly and could lead to significant fines, service interruption, loss of licensure, and other harms

to the Company.

In the European Economic Area (“EEA”), the General Data Protection Regulation (“GDPR”) establishes requirements

applicable to the processing of personal data, affords data protection rights to individuals, and imposes penalties for violations

of each EEA states’ law implementing the GDPR, including those that result in serious data breaches. In addition, Brexit took

effect in January 2020, which has led to the UK GDPR and further legislative changes that increase the burden of processing

and transferring personal data of EEA and UK residents. To satisfy these requirements, we may also need to make use of

alternative data transfer mechanisms such as standard contractual clauses approved by the European Commission, or the SCCs.

Any future updates to data transfer rules may require us to expend significant resources to update our contractual arrangements

and to otherwise comply with such obligations. Moreover, data protection authorities may require measures to be put in place in

addition to SCCs for transfers to countries outside of the EEA. Our third-party service providers may also be affected by these

changes. In addition to other impacts, we may experience additional costs to comply with these changes, and we and our

customers face the potential for regulators in the EEA to apply different standards to the transfer of personal data from the EEA

to the United States and other non-EEA countries. The UK and EEA are considering or have enacted a variety of other laws and

regulations such as the Digital Operational Resilience Act (EEA), Online Safety Act (UK), and the Artificial Intelligence Act

(EEA), all of which could have a material impact on Carlyle and its portfolio companies’ ability to conduct our businesses. We

cannot predict how these data protection laws or regulations may develop.

China continues to strengthen its protections of personal information and tighten control over cross-border data

transfers with the implementation of the Cybersecurity Law (“CSL”), Data Security Law (the “DSL”), and the Personal

Information Protection Law (the “PIPL”). These laws may affect the business of Carlyle and our portfolio companies in the

following ways. First, Carlyle and our portfolio companies may be subject to these laws when conducting business and

processing personal information or other data in China. Second, these laws may apply extra-territorially to the processing of

personal information and other data originating in China when conducted by Carlyle or our portfolio companies outside of

China. Third, these laws may impose new regulations on cross-border data transfers and transfers to third-party vendors

conducted by Carlyle and our portfolio companies. The PIPL imposes several conditions that limit certain cross-border transfer

of personal information of Chinese residents, while the DSL restricts transfer of “important data” outside of China. The scope

of “important data” remains unclear but may include certain data collected and/or generated by Carlyle and our portfolio

companies in China, in which case these restrictions could harm Carlyle and its portfolio companies that rely on the ability to

freely transfer data outside China. Finally, Carlyle and our portfolio companies may be contractually bound by certain

compliance obligations when dealing with counterparties in China as a result of these laws.

In addition, the National Intelligence Law (“NIL”), coupled with the recently enacted Espionage Act, allows

authorities to request organizations like Carlyle and its portfolio companies to provide necessary support, assistance, and

cooperation to the Chinese government. The NIL codifies broad police power, including the ability for intelligence officials to

enter relevant restricted areas and venues, learn from and question relevant organizations, and collect relevant files, materials,

or items, including electronic information.

The costs of compliance with, and other burdens imposed by the PIPL, CSL, DSL, and NIL, along with any other

cybersecurity and related laws in China, could have an adverse impact on our business and increase our compliance burden. A

determination by the Chinese government that Carlyle or its portfolio companies have violated one of these laws could result in

a variety of penalties, including fines of up to 5% of global revenues, warnings, disgorgement, suspension of business activities

or licenses, shutting down websites or applications that collect sensitive information, and revocation of business licenses or

relevant permits. Certain penalties can also apply to individual staff members responsible for a violation. The lack of clarity and

regulatory guidance on some issues adds to the compliance risks. Any inability, or perceived inability, to adequately address

privacy and data protection concerns, or comply with Chinese laws, regulations, policies, industry standards, contractual

obligations, or other legal obligations could result in additional cost and liability and could damage our reputation and adversely

affect our business and the business of our portfolio companies.

Many other foreign countries and governmental bodies in jurisdictions where Carlyle and our portfolio companies

conduct business have privacy and data protection laws and regulations that are more restrictive than those in the United States.

For example, the Hong Kong Personal Data (Privacy) Ordinance, the Australian Privacy Act, and the Brazilian Bank Secrecy

Law. Global laws in this area are rapidly increasing in the scope and depth of their requirements, which are often extra-

territorial in nature, and global regulators are seeking to enforce their countries’ laws outside of their borders. In addition, we

frequently have added privacy compliance requirements as a result of our contractual obligations with counterparties. These

legal and contractual obligations heighten our privacy obligations in the ordinary course of conducting our business in the

United States and internationally.

In the United States, federal privacy legislation is being considered by Congress and may lead to significant new

obligations for us and our portfolio companies. In the interim, a number ofstate laws are being passed, such as the California

Consumer Privacy Act (“CCPA”), which took effect in January 2020. The CCPA provides for enhanced consumer protections

for California residents, a private right of action for certain data breaches that is expected to increase related litigation, and

statutory fines for CCPA violations. In addition, the CCPA requires covered companies to provide new disclosures to California

residents and provides such residents new ways to opt-out of certain sales of personal information.

California voters also approved the California Privacy Rights Act (“CPRA”) in November 2020. Effective starting on

January 1, 2023, the CPRA made significant modifications to the CCPA, including by expanding rights with respect to certain

sensitive personal information and creating a new state agency for enforcing the CCPA. Unless and until a federal privacy law

that preempts state laws is enacted, states will continue to shape the data privacy environment nationally. For example, Virginia

enacted the Virginia Consumer Data Protection Act (the “VCDPA”), effective January 1, 2023, Colorado passed the Colorado

Privacy Rights Act (the “CPA”), effective July 1, 2023, Connecticut passed the Connecticut Data Privacy Act (the “CDPA”),

effective July 1, 2023, and Utah passed the Utah Consumer Privacy Act (the “UCPA”), effective December 31, 2023. Several

other U.S. states enacted privacy laws in 2023 that will take effect in the years to come and many other proposals exist in states

across the United States that could increase our potential liability, increase our compliance costs, and affect our ability to

process personal information integral to our business. Aspects of these state privacy statutes remain unclear, resulting in further

legal uncertainty and potentially requiring us to modify our data practices and policies and to incur substantial additional

Complying with various existing, proposed, or yet to be proposed laws, regulations, amendments to or re-

interpretations of existing laws and regulations, and contractual or other obligations relating to privacy, data protection, data

transfers, data localization, or information security may require us to make changes to our services to enable us or our

customers to meet new legal requirements, incur substantial operational costs, modify our data practices and policies, and

restrict our business operations. Any actual or perceived failure by us to comply with these laws, regulations, or other

obligations may lead to significant fines, penalties, regulatory investigations, lawsuits, costs for remediation, and other

liabilities.

For instance, regulatory investigations or penalties related to data protection failures could lead to negative publicity

and may cause our investors to lose confidence in the effectiveness of our security measures. Any inability, or perceived

inability, to adequately address privacy and data protection concerns, or comply with applicable laws, regulations, policies,

industry standards, contractual obligations, or other legal obligations also could result in additional cost and liability and could

damage our reputation and adversely affect our business.

Extensive regulation in the United States and abroad affects our activities, increases the cost of doing business, and creates

the potential for significant liabilities and penalties.

Our business is subject to extensive regulation, including periodic examinations, inquiries, and investigations, by

governmental agencies and self-regulatory organizations in the jurisdictions in which we operate around the world. These

authorities have regulatory powers dealing with many aspects of financial services, including the authority to grant, and in

specific circumstances to cancel, permissions to carry on particular activities. Many of these regulators, including U.S. and

foreign government agencies and self-regulatory organizations, as well as state securities commissions in the United States, are

empowered to conduct examinations, inquiries, investigations, and administrative proceedings that can result in fines,

suspensions of personnel, changes in policies, procedures or disclosure or other actions, including censure, the issuance of

cease-and-desist orders, the suspension or expulsion of a broker-dealer or investment adviser from registration or memberships

or the commencement of a civil or criminal lawsuit against us or our personnel.

Even if an investigation or proceeding does not result in a sanction or the sanction imposed against us or our personnel

by a regulator were small in monetary amount, the costs incurred in responding to such matters could be material and the

adverse publicity relating to the investigation, proceeding, or imposition of those sanctions could harm our reputation and cause

us to lose existing investors or fail to gain new investors or discourage others from doing business with us. Some of our

investment funds invest in businesses that operate in highly regulated industries, including in businesses that are regulated by

the U.S. Federal Communications Commission and U.S. federal and state banking authorities. The regulatory regimes to which

such businesses are subject may, among other things, condition our funds’ ability to invest in those businesses upon the

satisfaction of applicable ownership restrictions or qualification requirements. Our failure to obtain or maintain any regulatory

approvals necessary for our funds to invest in such industries may disqualify our funds from participating in certain investments

or require our funds to divest themselves of certain assets.

In recent years, the SEC and its staff have focused on issues relevant to global investment firms and have formed

specialized units devoted to examining such firms and, in certain cases, brought enforcement actions against the firms, their

principals, and their employees. We have seen and expect to continue to see a greater level of SEC enforcement activity under

the current administration, and while we believe that we have a robust compliance program in place, it is possible this

enforcement activity will target practices that we believe are compliant. Recent SEC focus areas have also included the use and

compensation of, and disclosure regarding, operating partners or consultants, outside business activities of firm principals and

employees and group purchasing arrangements, books and records retention, and general conflicts of interest disclosures. The

SEC is also focused on adherence to practices disclosed in fund offering documents, management of conflicted transactions,

management fee calculation, performance advertising, and investment due diligence practices.

It is generally expected that the SEC’s oversight of global investment firms will continue to focus on concerns related

to transparency, investor disclosure practices, investment risks and conflicts of interest, fees and expenses, liquidity, valuation

of assets, and controls around material non-public information, which could impact Carlyle in various ways. For example, our

private equity funds frequently engage operating executives and senior advisors who often work with our investment teams

during due diligence, provide board-level governance, and support and advise portfolio company management. Operating

executives and senior advisors generally are third parties, are not considered Carlyle employees, and typically are engaged by

us pursuant to consulting agreements, and the investors in our private equity funds may bear the cost of the operating executive

or senior advisor compensation, as permitted under the relevant fund legal documents. In some cases, an operating executive or

senior advisor may be retained by a portfolio company directly and, in such instances, the portfolio company may compensate

the operating executive or senior advisor directly (meaning that investors in our private equity funds may indirectly bear the

cost of the operating executive’s or senior advisor’s compensation). While we believe we have made appropriate and timely

disclosures regarding the engagement and compensation of our operating executives and senior advisors, the SEC staff may

disagree.

The SEC has also signaled that it will continue to focus on issues specific to private investment funds, including

performance advertising, the inclusion of preferred liquidity and disclosure terms in side letters, transparency of fund fees and

expenses, and reporting of information to the SEC on Form ADV and Form PF, including proposed amendments to Form ADV

that would require enhanced disclosure regarding cybersecurity incidents and ESG practices and final amendments to Form PF

that will introduce “current reporting” requirements for certain events and require enhanced disclosure regarding fund

investments and structures. In addition, in February 2024, the SEC and CFTC jointly adopted amendments that expand the

information that private fund advisers must report on their Form PF filings. The compliance date for these joint amendments to

Form PF is expected to be in the first half of 2025. Any new rulemaking by the SEC in these areas could have an impact on our

business practices and result in additional operational, administrative, and compliance burden and costs and could potentially

result in reductions to our revenue, earnings, and cash flow. See “Risks Related to Regulation and Litigation—Financial

regulations and changes thereto in the United States could adversely affect our business and the possibility of increased

regulatory focus could result in additional burdens and expenses on our business.”We also regularly are subject to requests for

information, inquiries, and informal or formal investigations by the SEC and other regulatory authorities, with which we

routinely cooperate. In the current regulatory environment, even historical practices that have been previously examined are

being revisited. For example, as part of a sweep investigation of financial services and investment advisory firms, in October

2022, we received a request for information from the SEC related to the preservation of certain types of electronic business

communications (e.g., text messages and messages on WhatsApp, WeChat, and similar applications). We intend to cooperate

fully with the SEC’s inquiry. These additional regulatory requirements will increase our compliance costs and may expose us to

liabilities and penalties if we fail to comply with the applicable laws, rules, and regulations.

We regularly rely on exemptions from various requirements of the Securities Act of 1933, as amended (the “Securities

Act”), the Exchange Act, the Investment Company Act, the Commodity Exchange Act, and the U.S. Employee Retirement

Income Security Act of 1974, as amended (“ERISA”), in conducting our asset management activities in the United States. If for

any reason these exemptions were to become unavailable to us, we could become subject to regulatory action or third-party

claims and our business could be materially and adversely affected.

Similarly, in conducting our asset management activities outside the United States, we rely on available exemptions

from regulatory regimes of various foreign jurisdictions. These exemptions from regulation within the United States and abroad

are sometimes highly complex and may, in certain circumstances, depend on compliance by third parties whom we do not

control. If for any reason these exemptions were to become unavailable to us, we could become subject to regulatory action or

third-party claims and our business could be materially and adversely affected. Moreover, the requirements imposed by our

regulators are designed primarily to ensure the integrity of the financial markets and to protect investors in our funds and are

not designed to protect our stockholders. Consequently, these regulations often serve to limit our activities and impose

burdensome compliance requirements. See Item 1 “Business—Regulatory and Compliance Matters.”

We may become subject to additional regulatory and compliance burdens as we expand our product offerings and

investment platform, including registered product offerings for retail investors. For example, we have several closed-end

investment companies in our Global Credit and Global Investment Solutions segments that are subject to the Investment

Company Act and the rules thereunder, which, among other things, impose regulatory restrictions on principal transactions

between, and joint transactions among, the investment company and certain of its affiliates, including its investment adviser.

Certain of these investment companies are subject to additional securities law requirements due to their status as a publicly

traded issuer, as well as the listing standards of the applicable national securities exchange. Other jurisdictions, particularly in

Europe and the United Kingdom, impose similar (if not greater) regulatory burdens on registered product offerings. We expect

to offer more of these registered investment products in the future to U.S. and non-U.S. investors. These additional regulatory

requirements will increase our compliance costs and may expose us to liabilities and penalties if we fail to comply with the

applicable laws, rules, and regulations.

We are subject to U.S. and foreign anti-corruption, anti-bribery, and anti-money laundering laws, including the U.S.

Foreign Corrupt Practices Act, as amended (“FCPA”), the U.S. domestic bribery statute, and the U.S. Travel Act, and other

anti-corruption, anti-bribery, and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption

laws are interpreted broadly and prohibit us from authorizing, offering, or providing, directly or indirectly, improper payments

or things of value to recipients in the public or private sector. In February 2024, the U.S. Department of the Treasury’s

Financial Crimes Enforcement Network (“FinCEN”) proposed a rule that would require registered investment advisers and

exempt reporting advisers (“ERAs”) to, among other measures, adopt an anti-money laundering and countering the financing of

terrorism (“AML/CFT”) program and file certain reports with FinCEN. The proposed rule would also delegate authority to the

SEC to examine registered investment advisers’ and ERAs’ compliance with these requirements. If this proposal is adopted, it

could impose additional regulatory obligations related to AML/CFT on our investment advisory business. In addition, we are

subject to the accounting and internal controls provisions of the FCPA, which require us to maintain accurate books and records

and a system of internal controls sufficient to detect and prevent corrupt conduct. We are also subject to U.S. export controls

and economic sanctions administered by the U.S. Commerce Department, the Office of Foreign Assets Control (“OFAC”) of

the U.S. Department of the Treasury, and the U.S. Department of State. Such export control laws and regulations and economic

sanctions are based on U.S. foreign policy and national security goals, and are enforced against targeted countries, jurisdictions,

territories, regimes, entities, organizations, and individuals.

Laws in non-U.S. jurisdictions, including those addressing anti-bribery, anti-corruption, anti-money laundering,

economic sanctions, or export control, may impose stricter or more onerous requirements than such laws of the United States,

and complying with these foreign laws may disrupt our business or cause us to incur significantly more costs to comply with

those laws. For example, in the United Kingdom, we are subject to the UK Proceeds of Crime Act 2002 regarding the

prevention of money laundering and the financing of terrorism, as well as the UK Bribery Act 2010 prohibiting private and

public sector bribery. Different laws may also contain conflicting provisions, making compliance with all laws more difficult.

We cannot predict the nature, scope, or effect of future regulatory requirements to which we may be subject or the manner in

which existing laws might be administered, interpreted, or enforced. Our funds’ portfolio companies’ compliance policies and

procedures may not prevent all instances of money laundering or bribery, or other prohibited transactions, including those

arising from actions by employees, representatives, or other agents, for which we or they might be held responsible.

These various anti-corruption, anti-money laundering, export control, and sanctions laws and regulations relate to

several aspects of our businesses, including servicing existing fund investors, finding new fund investors, and sourcing new

investments, as well as the activities of our funds’ portfolio companies, and require ongoing monitoring of both investors and

portfolio assets. U.S. government regulators, including the U.S. Department of Justice, the SEC, and OFAC, have devoted more

resources to enforcement of the FCPA and export control and sanctions laws as enforcement has become more of a priority in

recent years. Several other countries, including countries where we and our funds’ portfolio companies maintain operations or

conduct business, have also significantly expanded their enforcement activities, particularly regarding anti-corruption. Recently,

the U.S. government has also used sanctions and export controls to address broader foreign and international economic policy

goals. While we have developed and implemented policies and procedures designed to ensure compliance by us and our

personnel with the FCPA and other anti-corruption laws, as well as export control and economic sanctions laws, we cannot

ensure that none of our employees, representatives, contractors, partners, and agents will take actions in violations of our

policies and applicable law, for which we may be ultimately held responsible. Any determination that we have violated these

laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on

future conduct, securities litigation, disbarment, and a general loss of investor confidence, any one of which could have a

material adverse effect on our results of operations, financial condition, and cash flow, as well as our reputation.

In addition, the Iran Threat Reduction and Syria Human Rights Act of 2012 (the “ITRA”) expanded the scope of U.S.

sanctions against Iran and Section 219 of the ITRA amended the Exchange Act to require companies subject to SEC reporting

obligations under Section 13 of the Exchange Act to disclose in their periodic reports specified dealings or transactions

involving Iran, or other individuals and entities targeted by certain sanctions promulgated by OFAC, by the reporting company

or any of its affiliates, including in our case some of our portfolio companies, during the period covered by the relevant periodic

report. In some cases, the ITRA requires companies to disclose transactions even if they were permissible under U.S. law. In

addition, the ITRA imposes an obligation to separately file with the SEC a notice that specified activities have been disclosed in

our quarterly and annual reports, and the SEC is required to post this notice of disclosure on its website and send the report to

the U.S. President and certain U.S. Congressional committees. Disclosure of ITRA-specified activity, even if such activity is

legally permissible and not subject to sanctions under applicable law, and any fines or penalties actually imposed on us or our

affiliates as a result of any impermissible activities, could harm our reputation and have a negative impact on our business. In

the past, we have disclosed pursuant to Section 13 of the Exchange Act, certain permissible dealings and transactions and, to

date, we have not received notice of any investigation into such activities.

In January 2022, the U.S. Department of Justice Antitrust Division and the FTC launched a joint public inquiry aimed

at strengthening enforcement against illegal mergers, citing evidence that many industries across the economy are becoming

more concentrated and less competitive and, in July 2023, the Justice Department and the FTC released a draft update to the

merger guidelines, which were finalized in December 2023, that describe and guide the agencies’ review of mergers and

acquisitions to determine compliance with federal antitrust laws. In this respect, antitrust regulators in several foreign

jurisdictions have announced similar antitrust enforcement initiatives. These initiatives are expected to increase scrutiny of

mergers and acquisitions and to result in the adoption of more stringent guidelines for pre-approval of mergers. As a result, the

process of obtaining pre-approval from the FTC and other non-U.S. antitrust authorities for mergers and acquisitions

undertaken by the investment funds we manage is expected to become more challenging, more time consuming, and more

expensive. If certain proposed acquisitions or dispositions of portfolio companies by our managed investment funds are delayed

or rejected by antitrust regulators, it could have an adverse impact on our ability to generate future performance revenues and to

fully invest the available capital in our funds, as well as reduce opportunities to exit and realize value from our fund

If we fail to comply with this multitude of laws and regulations, even where conflicts of law arise, we could be

exposed to claims for damages, civil or criminal penalties, incarceration of our employees, restrictions on our operations

(including disbarment), and other liabilities, especially as non-U.S. regulators increase their enforcement activities, which could

materially and adversely affect our business, results of operations, financial condition, cash flow, and our reputation. In

addition, we may be subject to successor liability for FCPA violations or other acts of bribery, or violations of applicable anti-

corruption, sanctions, or export control laws committed by companies in which we or our funds invest or which we or our funds

acquire.

Financial regulations and changes thereto in the United States could adversely affect our business and the possibility of

increased regulatory focus could result in additional burdens and expenses on our business.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), enacted in 2010, has

imposed significant changes on almost every aspect of the U.S. financial services industry, including aspects of our business.

On May 24, 2018, the Economic Growth, Regulatory Relief and Consumer Protection Act (the “Reform Act”) was signed into

law. The Reform Act amends various sections of the Dodd-Frank Act, including by modifying the Volcker Rule to exempt

certain insured depository institutions.

The Volcker Rule, as amended by the Reform Act, generally prohibits any “banking entity” (broadly defined as any

insured depository institution, subject to certain exceptions including for depository institutions that do not have, and are not

controlled by a company that has, more than $10 billion in total consolidated assets or significant trading assets and liabilities,

any company that controls such an institution, a non-U.S. bank that is treated as a bank holding company for purposes of U.S.

banking law and any affiliate or subsidiary of the foregoing entities) from sponsoring, acquiring, or retaining an ownership

interest in a fund that is not subject to the provisions of the 1940 Act in reliance upon either Section 3(c)(1) or Section 3(c)(7)

of the 1940 Act. The Volcker Rule also authorizes the imposition of additional capital requirements and certain other

quantitative limits on such activities engaged in by certain nonbank financial companies that have been determined to be

systemically important by the Financial Stability Oversight Council (“FSOC”) and subject to supervision by the Federal

Reserve, although such entities are not expressly prohibited from sponsoring or investing in such funds. In July 2019, U.S.

federal regulatory agencies adopted amendments to the Volcker Rule regulations to implement the Volcker Rule amendments

included in the Reform Act and, also in 2019, such U.S. federal regulatory agencies adopted certain targeted amendments to the

Volcker Rule regulations to simplify and tailor certain compliance requirements relating to the Volcker Rule. In June 2020,

U.S. federal regulatory agencies adopted additional revisions to the Volcker Rule’s restrictions on banking entities sponsoring

and investing in certain covered hedge funds and private equity funds, including by adopting new exemptions allowing banking

entities to sponsor and invest without limit in credit funds, venture capital funds, customer facilitation funds, and family wealth

management vehicles (the “Covered Fund Amendments”). The Covered Fund Amendments also loosen certain other

restrictions on extraterritorial fund activities and direct parallel or co-investments made alongside covered funds. The Covered

Fund Amendments should therefore expand the ability of banking entities to invest in and sponsor private funds. The Covered

Fund Amendments, the Reform Act, and such regulatory developments and various other proposals focused on deregulation of

the U.S. financial services industry may have the effect of increasing competition for our businesses or otherwise reducing

investment opportunities, which could adversely affect us.

In June 2010, the SEC approved Rule 206(4)-5 under the Advisers Act regarding “pay to play” practices by investment

advisers involving campaign contributions and other payments to government clients and elected officials able to exert

influence on such clients. The rule prohibits investment advisers from providing advisory services for compensation to a

government client for two years, subject to very limited exceptions, after the investment adviser, its senior executives, or its

personnel involved in soliciting investments from government entities make contributions to certain candidates and officials in

a position to influence the hiring of an investment adviser by such government client. Any failure on our part to comply with

the rule could expose us to significant penalties, loss of fees, and reputational damage. In August 2017, FINRA’s “pay to play”

regulations went into effect. These FINRA rules effectively prohibit the receipt of compensation from state or local government

agencies for solicitation and distribution activities within two years of a prohibited contribution by a broker-dealer or one of its

covered associates. There have also been similar laws, rules, and regulations and/or policies adopted by a number of states and

municipal pension plans, which prohibit, restrict, or require disclosure of payments to (and/or certain contracts with) state

officials by individuals and entities seeking to do business with state entities, including investment by public retirement funds.

The Dodd-Frank Act also imposes a regulatory structure on the “swaps” market, including requirements for clearing,

exchange trading, capital, margin, reporting, and recordkeeping. The CFTC has finalized many rules applicable to swap market

participants, including business conduct standards for swap dealers, reporting and recordkeeping, mandatory clearing for certain

swaps, exchange trading rules applicable to swaps, initial and variation margin requirements for uncleared swap transactions,

and regulatory requirements for cross-border swap activities. These requirements could reduce market liquidity and adversely

affect our business, including by reducing our ability to enter swaps.

The Dodd-Frank Act authorizes federal regulatory agencies to review and, in certain cases, prohibit compensation

arrangements at financial institutions that give employees incentives to engage in conduct deemed to encourage inappropriate

risk taking by covered financial institutions. On May 16, 2016, the SEC and other federal regulatory agencies proposed a rule

that would apply requirements on incentive-based compensation arrangements of “covered financial institutions,” including

certain registered investment advisers and broker-dealers above a specific asset threshold. This rule, if adopted, could limit our

ability to recruit and retain investment professionals and senior management executives. However, the proposed rule remains

pending and may be subject to significant modifications. In addition, as directed under the Dodd-Frank Act, on October 26,

2022, the SEC adopted final rules under which companies listed on the NYSE and Nasdaq are required to adopt “clawback”

policies that mandate recovery by companies of certain incentive-based compensation awarded to current and former executives

in the event of an accounting restatement.

In May 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act became law, which modified

automatic additional regulatory compliance issues for financial entities that were deemed “Systemically Important Financial

Institutions” (SIFI) from $50 billion AUM to $250 billion AUM. There is risk that future legislation could revert such

designation back to $50 billion and expand its application to include private equity asset management firms.

Following the 2020 presidential and congressional elections in the United States, there has been an increased risk of

legislative and regulatory action that could adversely limit and affect our and our funds’ portfolio companies’ business. For

example, proposed legislation that was introduced into the U.S. Congress in July 2019 was reintroduced in October 2021,

containing a number of provisions that would adversely impact alternative asset management firms. Among other things, the

bill proposed to: (1) subject private funds and certain holders of economic interests therein to joint and several liability for all

liabilities of portfolio companies; (2) require private funds to offer identical terms and benefits to all limited partners; (3)

require disclosure of names of each limited partner invested in a private fund, as well as sensitive fund and portfolio company-

level information; (4) impose a limitation on the deductibility of interest expense only applicable to companies owned by

private funds; (5) modify settled bankruptcy law to target transactions by private equity funds; (6) increase tax rates on carried

interest; and (7) prohibit portfolio companies from paying dividends or repurchasing their shares or outsourcing jobs at

portfolio companies during the first two years following the acquisition of the portfolio company. In addition, in August 2021,

legislation was introduced in the Senate that would require holders of carried interest to recognize a specified amount of

deemed compensation income each year regardless of whether the investment partnership recognizes income or gain and

regardless of whether and when the holders receive distributions in respect of their carried interests. If similar legislation were

to become law, it could negatively impact us, our funds’ portfolio companies, and our investors.

The SEC’s amended rule for investment adviser marketing became effective in November 2022. The rule increases

regulatory obligations and potential scrutiny and imposes more prescriptive requirements on investment advisers’ marketing

activities, including but not limited to prohibitions on advertisements that are misleading or contain material statements that an

investment adviser cannot substantiate as well as requirements for performance advertising and the use of testimonials,

endorsements, and placement agent arrangements. The rule impacts the marketing of certain of our funds and other investment

advisory functions. Compliance with the new rule entails compliance and operational costs. The SEC has also already instituted

and settled multiple actions against investment advisers for violating the marketing rule, and publications by the SEC staff have

indicated that it will remain focused on investment advisers’ ongoing compliance with the marketing rule.

Future legislation, regulation or guidance may have an adverse effect on the fund industry generally and/or us

specifically. Financial services regulation, including regulations applicable to our business, has increased significantly in recent

years, and may in the future be subject to further enhanced governmental scrutiny and/or increased regulation, including

resulting from changes in U.S. executive administration or Congressional leadership. The SEC has adopted certain rules and

proposed multiple other rules that will impact the business operations and compliance obligations of Carlyle’s investment

advisers and funds:

•In August 2023, the SEC adopted new rules and amendments to existing rules under the Advisers Act (collectively, the

“Private Fund Adviser Rules”) specifically related to investment advisers and their activities with respect to private

funds they advise. In particular, the Private Fund Adviser Rules require registered investment advisers to: prepare and

distribute to private fund investors quarterly statements containing detailed information about compensation, fees and

expenses, portfolio investments, capital inflows and outflows, and performance, among other things; obtain an annual

audit for the private funds that they manage; and require registered advisers to obtain a fairness or valuation opinion

and make certain disclosures in connection with adviser-led secondary transactions. In addition, the Private Fund

Adviser Rules restrict all investment advisers from engaging in the following practices unless they satisfy certain

disclosure, and in some cases consent, requirements: charging private fund clients for fees and expenses associated

with regulatory and investigation-related expenses, charging non-pro rata fee and expense allocations, reducing the

amount of any clawback of advisory fees by actual, potential or hypothetical taxes, and borrowing money from a

private fund client. The Private Fund Adviser Rules also prohibit investment advisers from providing preferential

treatment to investors with regard to liquidity and information rights unless they meet specified conditions, and require

advisers to make certain disclosures to private fund investors with regard to preferential treatment provided to

investors in that fund. The compliance dates for the Private Fund Adviser Rules are in September 2024 or March 2025.

Although there is a pending legal challenge to the Private Fund Adviser Rules, it is uncertain whether such legal

challenge will succeed. While the full extent of the Private Funds Adviser Rules’ impact cannot yet be determined, it is

generally anticipated that they will have a significant effect on private fund advisers and their operations, including by

increasing regulatory and compliance costs and burdens and heightening the risk of regulatory action. It is expected

that the private funds advised by Carlyle will bear (either directly or indirectly) certain regulatory and compliance

costs relating to the Private Fund Adviser Rules. The Private Fund Adviser Rules could also divert time, attention, and

resources of Carlyle’s investment advisers and its personnel away from managing the Fund’s investment activities and

overseeing its portfolio companies. For these reasons, the Private Fund Adviser Rules could have a material negative

impact on the operations and financial performance of Carlyle’s investment adviser entities and the private funds that

they manage.

In addition, the SEC amended the books and records and compliance rules under the Advisers Act to require,

respectively, registered investment advisers to private funds to retain certain records evidencing their compliance with

the Private Fund Adviser Rules and all registered investment advisers to document their annual compliance review.

•In May 2023, the SEC adopted changes to Form PF, a confidential form relating to reporting by private funds and

intended to be used by the Financial Stability Oversight Counsel (“FSOC”) for systemic risk oversight purposes. This

amendment expands existing reporting obligationsby requiring large hedge fund advisers to make a filing within 72

hours of certain current reporting events including extraordinary investment losses and certain events related to margin

and redemptions, private equity fund advisers to make quarterly filings of adviser-led secondaries and removal of the

fund’s general partner, and large private equity fund advisers to provide additional information regarding general

partner clawbacks and fund strategy and borrowing in their annual Form PF filings. The compliance date for certain of

these expanded Form PF reporting requirements was in December 2023 and the compliance date for the other

requirements is June 2024. In addition, in February 2024, the SEC and CFTC jointly adopted amendments that expand

the information that private fund advisers must report on their Form PF filings. The compliance date for these joint

amendments to Form PF is expected to be in the first half of 2025.

•In July 2023, the SEC adopted new and amended rules that require public companies such as Carlyle to describe their

processes for assessing and managing material risks from cybersecurity threats, inform boards of directors regarding

these processes, and promptly disclose any material cybersecurity incident through a Form 8-K filing. The compliance

dates for these rules were December 2023. In addition, in February 2022, the SEC proposed rules regarding registered

investment advisers’ and funds’ cybersecurity risk management, which would require them to adopt and implement

cybersecurity policies and procedures, enhance disclosures concerning cybersecurity incidents and risks in regulatory

filings, and investment advisers to promptly report certain cybersecurity incidents to the SEC. Moreover, in March

2023, the SEC proposed changes to Regulation S-P, its financial privacy rules, which would require, among other

things, that investment companies, broker-dealers, and SEC-registered investment advisers notify affected individuals

of a breach involving their personal financial information within 30 days of becoming aware that it occurred. This

adopted rule, and either or both of these proposals, could increase our compliance costs and potential regulatory

liability related to cybersecurity. See “Risks Related to Regulation and Litigation— Laws and regulations relating to

privacy, data protection, data transfers, data localization, and data security worldwide may limit the use and adoption

of our services and adversely affect our business.”

•In February 2023, the SEC proposed extensive amendments to the custody rule for SEC-registered investment

advisers. If adopted, the amendments would require, among other things, the adviser to: obtain certain contractual

terms from each advisory client’s qualified custodian; document that privately-offered securities cannot be maintained

by a qualified custodian; and promptly obtain verification from an independent public accountant of any purchase,

sale, or transfer of privately-offered securities. The amendments also would apply to all assets of a client, including

real estate, contracts, and other assets that generally are not considered securities under the federal securities laws. If

adopted, these amendments could expose our registered investment advisers to additional regulatory liability, increase

compliance costs, and impose limitations on our investing activities.

•In 2023, the SEC adopted new or amended rules that accelerate the filing deadlines for companies to make filings of

beneficial ownership and expand the scope of instances where such a filing is required, require certain asset managers

to file with the SEC on a monthly basis certain data related to their short sales activity, and require annual reporting of

how they voted on say-on-pay proxy matters. The adoption of these rules is expected to require us to devote additional

resources to fulfilling these reporting obligations and may result in additional regulatory attention focused on such

activities. In October 2022, the SEC proposed a new rule and related amendments that would impose substantial

obligations on registered investment advisers to conduct initial due diligence and ongoing monitoring of a broad

universe of service providers that we may use in our investment advisory business. If these proposed rules take effect,

they could increase limitations on our ability to use service providers in connection with our investment advisory

business, impose additional costs and burdens on our use and monitoring of service providers, and subject us to

heightened regulatory scrutiny.

•In July 2023, the SEC proposed new predictive data analytics rules, which would require registered investment

advisers (and broker-dealers) to eliminate or neutralize (rather than disclose and mitigate) certain conflicts of interest

posed by covered technologies including artificial intelligence and machine-learning, with respect to their interactions

with clients and investors in pooled investment vehicles. If adopted, this rule could expose Carlyle to additional

regulatory uncertainty, liability, and increased compliance and other costs. In order to limit their potential liability

under this rule, our investment adviser entities could choose to change or discontinue some of their activities, or refrain

from engaging in activities related to such technologies, which could be detrimental to the funds, their investors, and

their financial performance. See “Risks Related to Our Company— Use of artificial intelligence technology by us

could lead to the exposure of our data or other adverse effects and such technology also may lead to more effective

threat actors.”

•The SEC has also adopted or proposed numerous new and amended rules that would apply to market participants that

we regularly interact with as counterparties or to our other business activities, including broker-dealers’ execution of

trades and clearance and settlement of trades. These rules could affect our business by making it more costly

financially or burdensome for us to engage in certain business transactions. In addition, an amended SEC rule and

subsequent guidance would, beginning in January 2025, prohibit broker dealers from providing price quotations for

certain private debt security offerings unless information about the issuer of these securities is current and publicly

available. This rule could affect our ability to trade in certain private debt securities.

•In September 2023, the SEC adopted amendments to its fund names rule to require that funds subject to the Investment

Company Act of 1940 whose names suggest that its investments incorporate one or more ESG factors must adopt a

policy to invest at least 80% of their assets consistently with this policy. The compliance date for this amendment to

the names rule is December 2025.

Between September 2022 and February 2024, the SEC announced charges against approximately 40 broker-dealers

and/or investment advisory firms for widespread and longstanding failures by the firms and their employees to maintain and

preserve electronic communications. The firms admitted the facts set forth in their respective SEC orders, acknowledged that

their conduct violated recordkeeping provisions of the federal securities laws, agreed to pay combined penalties of

approximately $1.3 billion, and agreed to implement improvements to their compliance policies and procedures to settle these

matters. As part of a sweep investigation of financial services and investment advisory firms, in October 2022, we received a

request for information from the SEC related to the preservation of certain types of electronic business communications (e.g.,

text messages and messages on WhatsApp, WeChat, and similar applications). We intend to cooperate fully with the SEC’s

inquiry.

It is difficult to determine the full extent of the impact on us of any new laws, regulations, or initiatives that may be

proposed or whether any of the proposals will become law. Any changes in the regulatory framework applicable to our

business, including the changes described above, may impose additional costs on us, impact our ability to generate revenue,

require the attention of our senior management, or result in limitations on the manner in which we conduct our business.

Moreover, we anticipate there may be an increase in regulatory investigations of the trading and other investment activities of

private funds, including our investment funds. Compliance with any new laws or regulations (including recent heightened SEC

scrutiny regarding adviser compliance with advisers’ own internal policies) could make compliance more difficult and

expensive, affect the manner in which we conduct our business, and adversely affect our profitability.

Changing regulations regarding derivatives and commodity interest transactions could adversely impact various aspects of

our business.

The regulation of derivatives and commodity interest transactions in the United States and other countries is a rapidly

changing area of law and is subject to ongoing modification by governmental and judicial action. We and our affiliates enter

into derivatives transactions for various purposes, including to manage the financial risks related to our business. Accordingly,

the impact of this evolving regulatory regime on our business is difficult to predict, but it could be substantial and adverse.

Managers of certain pooled investment vehicles with exposure to certain types of derivatives may be required to

register with the CFTC as commodity pool operators (“CPOs”) and/or commodity trading advisors (“CTAs”) and become

members of the National Futures Association (the “NFA”). As such, certain of our or our subsidiaries’ risk management or

other commodities interest-related activities may be subject to CFTC oversight. Consequently, certain CFTC rules expose

global investment firms, such as us, to increased registration and reporting requirements in connection with transactions in

futures, swaps, and other derivatives regulated by the CFTC. These regulations have required us to reassess certain business

practices related to our pooled vehicles, consider registration of certain entities with the CFTC, or file for additional exemptions

from such registration requirements. In addition, as a result of their derivatives-related activities, certain of our entities may be

subject to a wide range of other regulatory requirements, such as:

•potential compliance with certain commodities interest position limits or position accountability rules;

•administrative requirements, including recordkeeping, confirmation of transactions and reconciliation of trade data;

and

•mandatory central clearing and collateral requirements.

Our business may incur increased ongoing costs associated with monitoring compliance with the CFTC registration

and exemption obligations across platforms and complying with the various reporting and record-keeping requirements. In

addition, newly instituted and amended regulations could significantly increase the cost of entering into derivative contracts

(including through requirements to post collateral that could adversely affect our available liquidity), materially alter the terms

of derivative contracts, reduce the availability of derivatives to protect against risks that we encounter, reduce our ability to

restructure our existing derivative contracts, and increase our exposure to less creditworthy counterparties. If we reduce our use

of derivatives as a result of such regulations (and any new regulations), our results of operations may become more volatile and

our cash flows may be less predictable, which could adversely affect our ability to satisfy our debt obligations or plan for and

fund capital expenditures.

The short-term and long-term impact of the Basel capital standards remains uncertain.

In June 2011, the Basel Committee on Banking Supervision, an international body comprised of senior representatives

of bank supervisory authorities and central banks from 27 countries, including the United States, announced the final

framework for a comprehensive set of capital and liquidity standards, commonly referred to as “Basel III,” for internationally

active banking organizations and certain other types of financial institutions. The Basel III standards were revised in 2017 as

part of a package of reforms referred to as “Basel IV”(or more recently “Basel III Endgame”) by the banking industry. These

standards generally require banks to hold more capital, predominantly in the form of common equity, than under the previous

capital framework, reduce leverage, and improve liquidity standards. U.S. federal banking regulators, including the Federal

Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, have adopted, and

continue to adopt, final regulations to implement these standards for U.S. banking organizations.

The ongoing adoption of these rules could restrict the ability of banks to maintain certain levels or types of capital

market exposures under the present structure of their balance sheets, and cause these entities to raise additional capital in order

to stay active in our marketplaces. As a result, their businesses, results of operations, financial condition, or prospects could be

materially adversely affected, which in turn could have unintended adverse consequences for us, through higher borrowing

costs, reduced access to certain types of credit, and increased costs and difficulty for us or our funds to enter into transactions in

the normal course of our business. Moreover, these increased regulatory responsibilities and increased costs could reduce

trading by a number of market participants, which could in turn adversely impact liquidity and increase volatility in the markets

and expose our funds to greater risks in connection with their trading activities.

Regulatory initiatives in jurisdictions outside the United States could adversely affect our business.

Similar to the environment in the United States, the current environment in jurisdictions outside the United States in

which we operate, in particular the EU and the UK, has become subject to an expanding body of regulation. Governmental

regulators and other authorities in the EU and the UK have proposed or implemented a number of initiatives and additional

rules and regulations that could adversely affect our business.

Prudential regimes for EU and UK investment firms. From June 26, 2021, the Investment Firm Regulation and the

Investment Firm Directive (together, “IFR/IFD”) replaced the prudential framework that applied previously to EU investment

firms. IFR/IFD represents a complete overhaul of “prudential” regulation (i.e., capital adequacy, liquidity adequacy,

governance, remuneration policies and practices, public transparency and regulatory reporting) in the EU and substantially

increases regulatory capital requirements for certain investment firms and imposes more onerous remuneration rules, and

revised and extended internal governance, disclosure, reporting, liquidity, and group “prudential” consolidation requirements

(among other things). IFR/IFD affects AlpInvest, one of our subsidiaries, because it is an alternative investment fund manager

in the Netherlands with MiFID top-up permissions to provide investment services. It is possible that in the future, CIM Europe

may also have to comply with IFR/IFD in relation to its MiFID top-up permissions; however, Luxembourg does not currently

apply the regime to AIFMs with MiFID top-ups.

The UK has implemented its own version of IFR/IFD, the Investment Firms Prudential Regime (the “IFPR”), which

took effect from January 1, 2021. The IFPR applies to our subsidiaries that are UK investment firms under the post-Brexit UK-

retained Markets in Financial Instruments Directive (as restated, “MiFID II”), namely CECP, CELF and subject to FCA

approval, AlpInvest Partners LLP. Under the IFPR, among other requirements, both CECP and CELF, and subject to FCA

approval, AlpInvest Partners LLP, are required to maintain a more onerous policy on remuneration, set an appropriate ratio

between the variable and fixed components of total remuneration and meet requirements on the structure of variable

remuneration. These requirements may make it more difficult for us to attract and retain staff in certain circumstances. IFPR

also resulted in increased regulatory capital and liquidity adequacy requirements for CECP, in particular, which may continue to

increase the costs of doing business and may impede intra-group capital and cash flows.

AIFMD. The AIFMD was implemented in most jurisdictions in the EEA, on July 22, 2014. The AIFMD regulates

alternative investment fund managers (“AIFMs”) established in the EEA that manage alternative investment funds (“AIFs”).

The AIFMD also regulates and imposes regulatory obligations in respect of the marketing in the EEA by AIFMs (whether

established in the EEA or elsewhere) of AIFs (whether established in the EEA or elsewhere). The UK implemented AIFMD

while it was still a member of the EU and “onshored” it as part of UK law, such that similar requirements continue to apply in

the UK notwithstanding Brexit. Abingworth is authorized in the UK as an AIFM by the FCA. AlpInvest, one of our

subsidiaries, obtained authorization in 2015 and is licensed as an AIFM in the Netherlands. Moreover, in 2017, one of our

subsidiaries, Carlyle Real Estate SGR S.p.A, was registered as an AIFM in Italy and in 2018, one of our subsidiaries, CIM

Europe, obtained authorization as an AIFM in Luxembourg.

On November 10, 2023, the European Commission published a near-final directive amending the AIFMD, commonly

referred to as “AIFMD II.” Assuming AIFMD II is adopted promptly and published in the Official Journal without delay in

2024, most of the changes will come into effect in 2026, subject to some grandfathering periods for certain requirements.

AIFMD II imposes a number of amendments to the AIFMD, including more onerous delegation requirements, enhanced

substance requirements, additional liquidity management provisions for AIFMs to the extent that they manage open-ended

AIFs, and revised regulatory reporting and investor disclosures requirements. It also imposes significant new requirements

relating to the activities of funds that originate loans (which may affect a number of our funds), including new restrictions on

the structure that such funds may take and leverage limits for funds with material loan origination activities.

In addition, AIFMD II introduces new conditions for non-EEA AIFMs, such as certain of our U.S. affiliates, to be able

to make use of the national private placement regimes of EEA states, including a condition that the jurisdiction of neither of the

AIFM and AIF have been identified as non-cooperative third countries for tax purposes nor deemed by the EU not to comply

fully with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and on Capital and thereby to

ensure an effective exchange of information in tax matters. This gives rise to a risk that certain of our AIFs may not be able to

take advantage of such regimes to raise capital from EEA investors, potentially with little notice.

Given the significance of AIFMD II as well as its potential impact on the European fund industry framework, we

continue to consider its potential impact on our business, particularly with regard to our funds that engage in loan origination,

delegation of certain AIFM duties to third-countries that may affect both operating models of CIM Europe and AlpInvest, any

extension of the directive to third country firms, and a push towards harmonization of the Collective Investment in Transferable

Securities (“UCITS”) and AIFMD frameworks. AIFMD II has the potential to limit market access for our non-EU funds.

Moreover, compliance with AIFMD II may, among other things, increase the cost and complexity of raising capital, may slow

the pace of fundraising, limit operations, increase operational costs, and disadvantage our investment funds as bidders for and

potential owners of private companies located in the EEA when compared to non-AIF/AIFM competitors.

CBDF Directive and CBDF Regulation. In August 2021, two main legislative instruments, Directive (EU) 2019/1160

(the “CBDF Directive”) and Regulation (EU) 2019/1156 (the “CBDF Regulation”), came into effect. The CBDF Regulation

and CBDF Directive lay out, among other things, general principles to be adhered to by fund managers when drafting pre-

marketing and marketing communications. The legislative instruments also harmonize the pre-marketing requirements across

the EEA by requiring EU AIFMs to notify their local regulator of their intention to pre-market in certain EEA jurisdictions

within two weeks of pre-marketing having begun. CIM Europe and AlpInvest began to file such pre-marketing notifications

with the CSSF for any new fund and we are working to incorporate the relevant requirements under the CBDF Directive and

CBDF Regulation into the firm’s global marketing policy.

Solvency II. The European solvency framework and prudential regime for insurers and reinsurers, under the Solvency

II Directive 2009/138/EC (“Solvency II”), took effect in full on January 1, 2016. Solvency II is a regulatory regime that

imposes economic risk-based solvency requirements across all EU member states and consists of three pillars: Pillar I,

quantitative capital requirements, based on a valuation of the entire balance sheet; Pillar II, qualitative regulatory review, which

includes governance, internal controls, enterprise risk management, and supervisory review process; and Pillar III, market

discipline, which is accomplished through reporting of the insurer’s financial condition to regulators and the public. Solvency II

is supplemented by European Commission Delegated Regulation (E.U.) 2015/35 (the “Delegated Regulation”), other European

Commission “delegated acts” and binding technical standards, and guidelines issued by the European Insurance and

Occupational Pensions Authority. The Delegated Regulation sets out detailed requirements for individual insurance and

reinsurance undertakings, as well as for groups, based on the overarching provisions of Solvency II, which together make up the

core of the single prudential rulebook for insurance and reinsurance undertakings in the European Union.

Solvency II sets out stronger capital adequacy and risk management requirements for European insurers and reinsurers

and, in particular, dictates how much capital such firms must hold against their liabilities and introduces a risk-based

assessment of those liabilities. In addition, Solvency II imposes, among other things, substantially greater quantitative and

qualitative capital requirements for insurers and reinsurers as well as other supervisory and disclosure requirements. While we

are not subject to Solvency II, many of our European insurer or reinsurer fund investors are subject to this directive, as applied

under applicable domestic law. Solvency II also may impact insurers’ and reinsurers’ investment decisions and their asset

allocations. Moreover, insurers and reinsurers will be subject to more onerous data collation and reporting requirements. As a

result, there is potential for Solvency II to have an adverse indirect effect on our businesses by, among other things, restricting

the ability of European insurers and reinsurers to invest in our funds and imposing on us extensive disclosure and reporting

obligations for those insurers and reinsurers that do invest in our funds. A broad review of Solvency II was carried out by the

European Commission in 2020 (the “Solvency II 2020 review”), with input from the European Insurance and Occupational

Pensions Authority (“EIOPA”). This included a related public consultation launched by the European Commission in July

2020. On December 17, 2020, EIOPA submitted its opinion on the Solvency II 2020 review to the European Commission. The

Solvency II 2020 review is expected to result in amendments to various aspects of Solvency II, although the extent of such

amendments is currently unknown. Following this, on September 22, 2021, the European Commission published proposed

legislation to amend the Solvency II Directive. The proposals are subject to the EU ordinary legislative process and are still

being considered by the European Parliament and the European Council, with the implementation date of the revised Solvency

II Directive currently unknown. It is unclear at this stage the extent to which the proposed amendments to Solvency II will have

an indirect effect on our businesses.

Post-Brexit, Solvency II was onshored in the UK. In November 2022, His Majesty’s Treasury (“HM Treasury”) issued

its response to its consultation on a review of Solvency II, outlining the areas of reform that would be delivered through

changes to the UK Prudential Regulation Authority’s (“PRA”) rules and legislation. Two consultation papers have since

followed, the first published on June 29, 2023, and the second on September 28, 2023. The first consultation paper focused on

simplifying the existing framework with the intent of reducing the administrative and reporting requirements (and in turn, costs)

for UK insurance firms. The second consultation paper included proposals to reform insurers’ matching adjustment mechanism,

with the intention of widening the categories of assets that insurers can hold in their portfolios. The intended implementation

date for the majority of the changes proposed in the consultation papers is December 31, 2024, with the reforms to the matching

adjustment reforms taking effect from June 30, 2024. It is unclear at this stage the extent to which the proposed amendments to

the UK’s version of Solvency II will have an indirect effect on our businesses.

MiFID II. The recast Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation

(collectively referred to as “MiFID II”) came into effect on January 3, 2018. Although the UK has now withdrawn from the EU,

its rules implementing the recast Markets in Financial Instruments Directive continue to have effect and the Markets in

Financial Instruments Regulation has been onshored into UK law (subject to certain amendments to ensure it operates properly

in a UK-specific context) in connection with such withdrawal. MiFID II amended the existing MiFID regime and, among other

requirements, introduced new organizational and conduct of business requirements for investment firms in the EEA. Certain

requirements of MiFID II also apply to AIFMs with a MiFID “top-up” permission, such as AlpInvest.

MiFID II extended MiFID requirements in a number of areas such as the receipt and payment of inducements

(including investment research), suitability and appropriateness assessments, conflicts of interest, record-keeping, costs and

charges disclosures, best execution, product design and governance, and transaction and trade reporting. Under MiFID II,

national competent authorities are also required to establish position limits in relation to the maximum size of positions that a

relevant person can hold in certain commodity derivatives. The limits apply to contracts traded on trading venues and their

economically equivalent OTC contracts. The position limits established, as amended from time to time, and our ability to rely

on any exemption thereunder may affect the size and types of investments we may make. Failure to comply with MiFID II and

its associated legislative acts could result in sanctions from national regulators, the loss of market access, and a number of other

adverse consequences that would have a detrimental impact on our business. Certain aspects of MIFID II and Markets in

Financial Instruments Regulations (“MiFIR”) are subject to review and change in both the EU and the UK.

Swiss Marketing Regulations. The Swiss Financial Services Act (FinSA) and the Financial Institution Act (FinIA)

came into force on January 1, 2020, with a transition period that ended on December 31, 2021. FinSA seeks to protect clients of

financial service providers and to establish comparable conditions for the provision of financial services by financial service

providers (FSP), and thus contributes to enhancing the reputation and competitiveness of Switzerland’s financial center. FinIA

introduces coordinated supervision for the various categories of financial institutions: portfolio managers, trustees, managers of

collective assets, fund management companies, and securities firms. The new Swiss regulations have an impact on the offering

and marketing foreign investment fund shares into Switzerland on a cross-border basis and creates new requirements for

financial service providers.

Anti-Money Laundering. During 2020, two new EU Anti-Money Laundering (AML) Directives came into force: the

fifth AML EU Directive (AMLD5) and the sixth AML EU Directive (AMLD6). AMLD5 was implemented into UK law on

January 10, 2020. The changes under AMLD5 include new more stringent customer due diligence measures and requirements

to report discrepancies between information held and the Companies House register and to conduct risk assessments prior to the

launch or use of new products and business practices. AMLD5 has added complexity to our internal processes and any

perceived shortcomings in our adoption of AMLD5 could create reputational risks to our business. AMLD6 harmonizes the

definition of money laundering across the EU, expands the number of offenses that fall under the definition of money

laundering and extends criminal liability to include punishments for legal persons, including partnership entities. On July 20,

2021, the European Commission presented an ambitious package of legislative proposals to strengthen the EU’s anti-money

laundering and countering the financing of terrorism (AML/CFT) rules, including the creation of a new pan-EU supervisory

authority to combat money laundering. The UK government opted out of AMLD6. However, the HM Treasury launched a

consultation on reforming the UK’s AML/CFT regime in June 2023 and is expected to propose some amendments to the

existing regime.

Securitization Regulation. Regulation (EU) 2017/2402 (the “Securitization Regulation”) is a framework for European

securitizations, which came into effect on January 1, 2019. There is a risk that a non-EU AIFM that markets funds in the EU

that invest in securitization positions could be within scope of certain requirements under the Securitization Regulation. To the

extent a non-EU AIFM is within the scope of the Securitization Regulation, it could only hold a securitization exposure where

the originator, sponsor, or original lender retains 5% of the securitization. If our non-EU AIFMs fall within the scope of the

Securitization Regulation, it could affect the asset values of certain of our funds, force divestment of certain assets at depressed

prices, and increase the operating cost of our CLOs. The UK has adopted the Securitization Regulation notwithstanding Brexit.

However, the UK intends to repeal its current implementation and diverge from the EU’s Securitization Regulation. It has

published draft legislation (the “Securitisation Regulations 2023”) as part of a policy statement identifying several areas for

revision in the United Kingdom. The Securitisation Regulations 2023 are still under review and so the final rules remain

unclear, and we continue to monitor industry practice and its implementation.

ESG and Sustainable Finance Regulation. New regulatory initiatives related to ESG and sustainable finance that are or

will be applicable to us, our funds, and their portfolio companies could adversely affect our business. In 2018, the European

Commission adopted an “action plan on financing sustainable growth” (the “Action Plan”). The Action Plan is, among other

things, designed to define and reorient investment towards more sustainable economic activities. The Action Plan contemplates,

among other things, creating an EU green bond standard and establishing EU labels for green financial products, clarifying

asset managers’ and institutional investors’ duties regarding sustainability in their investment decision-making processes,

increasing disclosure requirements in the financial services sector around sustainability, increasing the transparency of

companies on their ESG policies and related processes and management systems, and introducing a “green supporting factor” in

the EU prudential rules for banks and insurance companies to incorporate climate risks and other environmental factors into

banks’ and insurance companies’ risk management policies.

On June 22, 2020, the Official Journal of the European Union published a classification system that establishes a list of

environmentally sustainable economic activities and sets out four overarching conditions that an economic activity has to meet

in order to qualify as environmentally sustainable (Regulation (EU) 2020/852 of the European Parliament and of the Council of

18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU)

2019/2088, “Taxonomy Regulation”). The Taxonomy Regulation, among other things, introduced mandatory disclosure and

reporting requirements and supplements the framework set out in the Sustainable Financial Disclosure Regulation (Regulation

(EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in

the financial services sector, “SFDR”), which requires certain disclosures in relation to whether and, if so, how sustainability

risks and negative impacts on environmental and social factors are taken into account in the investment process and the likely

impacts of sustainability risks on the returns of the financial products. Financial products that have as their objective

“sustainable investment” or that promote binding environmental or social characteristics are required to disclose that objective

or those characteristics in pre-contractual disclosures required pursuant to the AIFMD and report on an ongoing basis their

performance in achieving that objective or those characteristics in periodic reports produced pursuant to the AIFMD. In

addition, if a financial product does not promote environmental or social characteristics or does not have as its objective

“sustainable investment,” the information to be disclosed in accordance with applicable sectoral legislation must also be

followed by a statement indicating that the financial product does not take into account EU criteria for environmentally

sustainable economic activities. The disclosure requirements in the SFDR are supplemented by Commission Delegated

Regulation (EU) 2022/1288 of 6 April 2022, which requires enhanced disclosures in pre-contractual documents, on websites

and in periodic reports. The European Supervisory Authorities published a proposal on December 4, 2023, which amends

certain of the disclosure requirements under SFDR.

In September 2023, the European Commission launched a consultation on SFDR in the form of a questionnaire, the

product of which, including the amended rules, are commonly referred to as “SFDR II.” Compliance with any new

requirements under SFDR II may lead to increased management burdens and costs. The consultation did not contain much by

way of policy suggestions or draft amendments and, although the scope of questions gave some indication of the Commission’s

thinking on reform, we cannot guarantee that our current approach to compliance will meet future regulatory requirements,

reporting frameworks, or best practices, which could increase the risk of related enforcement actions.

For us, this primarily impacts our AIFMs and the funds they manage by requiring certain firm-level disclosures on our

website relating to how sustainability risks are integrated into investment processes, consideration of adverse impacts of

investment decisions on sustainability factors, and transparency of remuneration policies on the integration of sustainability

risk, as well as inclusion of certain information in pre-contractual and periodic disclosures required pursuant to the AIFMD. We

have been working with external counsel to prepare such disclosures and to ensure that relevant internal teams understand the

investor relations and other implications of product categorization and reporting. In respect of public website disclosure

requirements for private funds, we intend to continue to comply with and monitor EU public transparency requirements while

also complying with securities offering laws, such as the Securities Act.

Commission Delegated Regulation (EU) 2021/1255 amends Delegated Regulation (EU) 231/2013 to require that

sustainability risks are integrated into the investment decision-making, risk management, and compliance functions and

processes of EU AIFMs. These requirements became effective and have applied to us since August 2022. Commission

Delegated Regulation (EU) 2021/1253, amending Regulation (EU) 2017/565, requires, among other things, certain firms to

carry out a mandatory assessment of the sustainability preferences of clients, integrate sustainability into risk management

policies, and consider sustainability factors in the product approval and governance process, which also became effective and

have applied to us since August 2022.

There is a risk that a significant reorientation in the market following the implementation of these sustainable finance

regulations and further measures could be adverse to our portfolio companies if they are perceived to be less valuable as a

consequence of, among other things, their carbon footprint or allegations or evidence of “greenwashing.” There is also a risk

that market expectations in relation to the SFDR categorization of financial products could adversely affect our ability to raise

capital.

In this respect, sustainable finance initiatives continue to evolve rapidly, and it is not possible at this stage to fully

assess how our business will be affected with certainty. We are monitoring developments in relation to EU sustainable finance

as well as corporate sustainability reporting and proposals for laws requiring due diligence of supply chains. Guidance from EU

policymakers and financial supervisors changes frequently. We, our funds, and their portfolio companies are subject to a risk

that similar measures might be introduced in other jurisdictions in which we or they currently have investments or plan to invest

in the future.

Moreover, on January 5, 2023, the Corporate Sustainability Reporting Directive (“CSRD”) came into force. Broadly,

CSRD amends and strengthens the rules introduced on sustainability reporting for companies, banks, and insurance companies

under the Non-Financial Reporting Directive (2014/95/EU) (“NFRD”). CSRD will require a much broader range of companies

to produce detailed and prescriptive reports on sustainability-related matters within their financial statements, including large

EU companies (including EU subsidiaries of non-EU parent companies), EU and non-EU-companies (including small and

midsize enterprises) with listed securities on EU-regulated markets (except micro-undertakings), and non-EU companies with

significant turnover and a legal presence on EU markets.

The reporting requirements will be phased in from 2024, with the first reports including audited information on

sustainability-related matters being published in 2025 to cover the 2024 fiscal year. There is still uncertainty around the specific

requirements of CSRD reporting as the sector-specific reporting standards under CSRD are still due to be published within

delegated acts and only the draft standards are currently available. There can be no assurance that adverse developments with

respect to such risks will not adversely affect assets held by our funds in certain countries or the returns from these assets.

The FCA introduced a regulatory framework that focused on implementing the recommendations of the Financial

Stability Board Taskforce on Climate-related Financial Disclosures (“TCFD”), in particular, by introducing mandatory TCFD-

aligned disclosure requirements for certain FCA authorized firms. These rules are set out in the ESG Sourcebook in the

Business Standards section of the FCA Handbook of Rules and Guidance (“ESG Sourcebook”). The rules capture certain asset

managers including, so far as relevant, certain private fund advisors such as CECP and investment portfolio managers such as

CELF, as well as insurers and FCA-regulated pension providers. There is a phased approach to the implementation of these

rules. For the largest in-scope firms (those with over £50 billion in AUM calculated as a 3-year rolling average), the rules

applied beginning January 1, 2022, with the first public disclosures to be made by June 30, 2023. For those below this threshold

but above £5 billion in AUM (calculated as a 3-year rolling average), the rules applied beginning January 1, 2023, with

disclosures to be made by June 30, 2024.

On November 28, 2023, the UK FCA published rules and guidance for sustainability disclosure requirements (“SDR”)

and sustainability labels for investment products (“PS23/16”), which specifies, among other requirements, an anti-greenwashing

rule and sustainability-related disclosure requirements in respect of certain financial products and firms. The new rules have

been added to the ESG Sourcebook and focus on UK managers and UK-managed funds and do not cover overseas managers or

products marketed in the UK. However, the FCA has indicated that it intends to undertake a further consultation on expanding

the scope of these requirements potentially to cover portfolio managers (particularly discretionary wealth management services,

although the scope of the extension is unclear and could be much broader), overseas products, and pension products, which

could capture more substantively our UK advisors and non-UK entities in future. The only rule under SDR that applies to all

FCA-regulated firms is the new anti-greenwashing rule, which applies when communicating with or approving financial

promotions directed at UK clients from May 31, 2024. This regime diverges from other international sustainability-related

disclosure regimes, including the EU SFDR and the SEC proposals. We are monitoring these developments, particularly how

they may impact our businesses. Additional regulatory costs may be incurred if following an extension, SDR materially applies

to our UK authorized entities and/or funds in future. Such new rules may also have an impact on our fund investment strategies

and financial returns, as a result.

In March 2021, the SEC announced the establishment of an enforcement task force to examine ESG practices and

disclosures by public companies and investment managers. In 2022, the SEC commenced enforcement actions against at least

two investment advisers relating to ESG disclosures and policies and procedures failures, and we expect that there will be a

greater level of enforcement activity in this area in the future. In addition, in May 2022, the SEC announced two rule proposals

that would result in more stringent regulations of ESG funds and ESG-related claims: (i) the proposed rule on “Enhanced

Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance

Investment Practices” (the “ESG Funds Reporting Rule”) and (ii) the proposed rule on “Investment Company Names,” which

would amend Rule 35d-1 (the “Names Rule”) under the 1940 Act. These proposals would prevent registered funds other than

ESG-focused funds (as defined in the SEC’s enhanced disclosure proposal) from using ESG terminology such as “green,”

“sustainable,” or “ESG-focused” in their names and require funds that integrate ESG factors into their investment strategies to

provide enhanced disclosures regarding ESG strategies, how ESG (including greenhouse gas emissions) is integrated into

investment decision-making, and how funds engage with portfolio companies on ESG matters. Under the ESG Funds Reporting

Rule, funds that make ESG factors a significant or primary consideration in investment decisions would be required, subject to

certain exceptions, to report on portfolio company greenhouse gas emissions, including carbon footprint and weighted average

carbon intensity. In September 2023, the SEC adopted amendments to the Names Rule to require that funds which are subject to

the Investment Company Act of 1940 whose names suggest that its investments incorporate one or more ESG factors must

adopt a policy to invest at least 80% of their assets consistently with this policy. The compliance date for this amendment to the

Names Rule is December 2025.

In 2022, the SEC also proposed extensive rules aimed at enhancing and standardizing climate-related disclosures in an

effort to foster greater consistency, comparability, and reliability of climate-related information. The proposed rules build on the

mandatory framework and disclosures implemented in the UK under TCFD. The proposal, if adopted, would require domestic

registrants and foreign private issuers to include certain climate-related information in their registration statements and annual

reports, including data regarding greenhouse gas emissions and information regarding climate-related risks and opportunities

and related financial impacts, governance, and strategy. Although the ultimate date of effectiveness and the final form and

substance of the requirements for the proposed rule is not yet known and the ultimate scope and impact on our business is

uncertain, compliance with the proposed rule, if finalized, may result in increased legal, accounting, and financial compliance

costs, and make some activities more difficult, time-consuming, and costly. The SEC, in its Fall 2023 Reg Flex Agenda, has

confirmed that it is delaying the date for final action on the climate change disclosure rules until April 2024 (i.e., a year after the

initially proposed timeframe for adoption).

Moreover, the SEC has also announced that it is working on proposals for mandatory disclosure of certain other ESG-

related matters, including with respect to board diversity and human capital management. At this time, there is uncertainty

regarding the scope of such proposals or when they would become effective. As regulations develop, we will consider the

implications for our business of the overlapping global measures, and how they fit together. Compliance with any new laws or

regulations increases our regulatory burden and could make compliance more difficult and expensive, increase the risk that we

are subject to enforcement, affect the manner in which we or our portfolio companies conduct our businesses, and adversely

affect our profitability.

Compliance with sustainable finance frameworks of this nature, including the Taxonomy Regulation, the SFDR, and

CSRD, has and will continue to create an additional compliance burden and increased legal, compliance, governance, reporting,

and other costs to us, our funds, and their portfolio companies because of the need to collect certain information to meet the

disclosure requirements, the need to update or develop new policies and processes to meet regulatory requirements and

associated ESG commitments, claims, and initiatives, and changes to the manner in which we, our funds or, their portfolio

companies conduct business. In addition, where there are uncertainties regarding the operation of sustainable finance

frameworks, a lack of official, conflicting, or inconsistent regulatory guidance, a lack of established market practice, and/or data

gaps or methodological challenges affecting the ability to collect relevant data us and our portfolio companies may be required

to engage third party advisors and/or service providers to fulfill the requirements, thereby exacerbating any increase in

compliance burden and costs.

Appointed Representative Arrangements. Appointed representative arrangements are an area of increased regulatory

focus in the United Kingdom. The FCA has reemphasized the need for principals to take effective responsibility for, and have

appropriate systems in place to adequately supervise, their appointed representatives. CECP is a principal firm that bears

responsibility for CIC. On December 8, 2022, the FCA updated the rules on appointed representatives, which include more

extensive obligations on principal firms, and we have updated our policies and procedures to take account of the amended rules

to ensure CIC and CECP remain compliant.

Leveraged Transactions. In May 2017, the European Central Bank (“ECB”) issued guidance on leveraged

transactions, which applies to significant credit institutions supervised by the ECB in member states of the Eurozone. Under the

guidance, credit institutions should have in place internal policies that include a definition of “leveraged transactions.” Loans or

credit exposures to a borrower should be regarded as leveraged transactions if: (i) the borrower’s post-financing level of

leverage exceeds a total debt to EBITDA ratio of 4.0 times, or (ii) the borrower is owned by one or more “financial sponsors.”

For these purposes, a financial sponsor is an investment firm that undertakes private equity investments in and/or leveraged

buyouts of companies. Following these guidelines, credit institutions in the Eurozone could in the future limit, delay, or restrict

the availability of credit and/or increase the cost of credit for our investment funds or portfolio companies involved in leveraged

transactions. This policy area remains under close scrutiny and further guidance could be issued on short notice in the future.

CSPD. In March 2018, the European Commission published a proposal for a directive governing credit servicers,

credit purchasers, and the recovery of collateral in connection with loans (the “Credit Servicers and Purchasers Directive” or

“CSPD”). The policy aim behind the CSPD is the development of a well-functioning secondary market for non-performing

loans. The CSPD was finalized and published in the Official Journal of the European Union on December 8, 2021, and entered

into force on December 28, 2021. Member states are required to adopt and apply measures implementing the CSPD by

December 30, 2023, and entities carrying on credit servicing activities from December 30, 2023, will be required to obtain

authorization under the CSPD by June 29, 2024.

The CSPD applies to, among others, “credit servicers” and “credit purchasers” and would impose a number of new

requirements relating to licensing, conduct of business, and provision of information. The definition of “credit servicer” in the

Commission proposal is sufficiently broad that it could be construed to include asset managers. The Directive limits the scope

of the requirements for credit servicers and credit purchasers to the servicing or purchasing of credit agreements originally

issued by a credit institution established in the European Union or its subsidiaries established in the European Union. This is

subject, however, to individual member state discretion. Such member states may choose to extend the CSPD requirements to

credit agreements that are not issued by an EU credit institution. Subject to the aforementioned potential extension of scope by

individual member states, the servicing of loans originally advanced by credit funds (rather than, for example, an EU bank) will

fall outside the scope of the CSPD. Asset managers are unlikely to act as principal credit purchasers. However, they may

purchase in-scope credit agreements as agent on behalf of the funds or separately managed accounts for whom they are acting

and therefore may in practice be required to discharge the associated obligations on behalf of underlying clients. Compliance

with these rules could involve a material cost to our business.

Hong Kong Security Law. On June 30, 2020, the National People’s Congress of China passed a national security law

(the “National Security Law”), which criminalizes certain offenses including secession, subversion of the Chinese government,

terrorism, and collusion with foreign entities. The National Security Law also applies to nonpermanent residents. Although the

extra-territorial reach of the National Security Law remains unclear, there is a risk that the application of the National Security

Law to conduct outside Hong Kong by nonpermanent residents of Hong Kong could limit the activities of or negatively affect

us, our investment funds, and/or portfolio companies. The National Security Law has been condemned by the United States, the

United Kingdom, and several EU countries. The United States and other countries may take action against China, its leaders,

and leaders of Hong Kong, which may include the imposition of sanctions. Escalation of tensions resulting from the National

Security Law, including conflict between China and other countries, protests, and other government measures, as well as other

economic, social, or political unrest in the future, could adversely impact the security and stability of the region and may have a

material adverse effect on countries in which we, our investment funds, and portfolio companies or any of their respective

personnel or assets are located. In addition, any downturn in Hong Kong’s economy could adversely affect our financial

statements and our investments or could have a significant impact on the industries in which we participate, and may adversely

affect our operations, our investment funds, and portfolio companies, including the retention of investment and other key

professionals located in Hong Kong.

Chinese Regulations. In August 2014, the China Securities Regulatory Commission (the “CSRC”), the Chinese

securities regulator, promulgated the Interim Regulations on the Supervision and Administration of Private Investment Funds

(the “CSRC Regulations”). The CSRC Regulations adopt a broad definition of private investment funds, including private

equity funds. In accordance with the CSRC Regulations and other relevant PRC laws, regulations, and authorizations, the

CSRC has become the principal regulator of private equity funds in China. In December 2020, the CSRC further promulgated

Several Provisions on Strengthening the Regulation of Private Investment Funds, pursuant to which the CSRC strengthened its

regulations on private investment funds and private investment fund managers. In July 2023, the State Council of the People’s

Republic of China promulgated the first administrative regulation in the private fund (including private equity and venture

capital funds) sector in China, the Regulations on Supervision and Administration of Private Investment Funds, which took

effect in September 2023 and set out high-level principles and rules regarding major issues in the industry. CSRC has

designated the Asset Management Association of China (the “AMAC”), an industry body, with responsibility to introduce and

promote regulations toward a degree of self-regulation across private equity funds in China. In recent years, regulations,

directives, and guidelines from the AMAC have continued to regulate private investment funds incorporated in China. For

example, the AMAC has issued “Guidelines for Internal Control of Privately-raised Investment Fund Managers” (February

2016), “Administrative Measures for Information Disclosure of Privately-raised Investment Fund” (February 2016),

“Announcement on Further Regulating Relevant Matters Concerning the Registration of the Managers of the Privately-Raised

Funds” (February 2016), “Measures for the Administration of Private Placement of Private Investment Funds” (April 2016),

“Private Equity Fund Contract Guidelines No. 1, No. 2 and No. 3” (April 2016), “Administrative Measures for Private

Investment Fund Services” (March 2017), “Implementing Guidelines on the Administration of Investor Suitability for Fund

Raising Institutions” (July 2017), “Guidelines on the Valuation of the Private Equity Investments of Privately-raised Investment

Funds (for Trial Implementation)” (July 2018), “Guidelines on the Name of Privately-raised Investment Funds” (November

2018), “Notice on Privately-raised Fund Manager Registration” (December 2018), “Notice on Privately-raised Investment

Fund Filing” (December 2019), “Notice on Facilitating the Application of Privately-raised Fund Manager

Registration” (February 2020), and “Notice on Strengthening the Self-Regulatory Management of Privately-raised Fund

Information Submission and Optimizing Industry Services” (February 2021), in addition to the regulations and directives from

the CSRC and the AMAC.

If a private equity fund wishes to accept capital contributions from a PRC governmental body or authority, that fund

also needs to subject itself (including specific conditions regarding the general partner and/or the private investment fund

manager) to the supervision of the National Development and Reform Commission (the “NDRC”). If a private equity fund

wishes to accept capital contributions from a PRC insurance company, that fund also needs to subject itself (including specific

conditions regarding the general partner and/or the private investment fund manager) to the supervision of the China Banking

and Insurance Regulatory Commission (the “CBIRC”). In accordance with the NDRC’s regulations on governmental fund of

funds’ participation in equity investment funds, and/or the CBIRC’s regulations on insurance companies, the private investment

fund is subject to requirements relating to the industry focus, investment scope, investment restrictions, risk control, and

information disclosure. The general partner and/or the private investment fund manager are also subject to additional

restrictions and qualification requirements and are required to fulfill reporting and filing obligations to the NDRC and/or the

CBIRC (in addition to any reporting or filing obligations to the CSRC, the AMAC, local financial bureaus, or others). These

regulations may have an adverse effect on us and/or ourrenminbi (RMB)-denominated investment funds by, among other

things, increasing the regulatory burden and costs of raising money for RMB-denominated investment funds if we admit

investors that are regulated by the above regulators.

Data Privacy. Many foreign countries and governmental bodies, including the European Union and other relevant

jurisdictions where Carlyle and our portfolio companies conduct business, have laws and regulations concerning the collection

and use of PII and other data obtained from their residents or by businesses operating within their jurisdiction that are more

restrictive than, and could in some cases conflict with, those in the United States. See “Risks Related to Regulation and

Litigation—Laws and regulations relating to privacy, data protection, data transfers, data localization, and data security

worldwide may limit the use and adoption of our services and adversely affect our business” for more information.

Other Similar Measures. Our investment businesses are subject to risk that similar measures might be introduced in

other countries in which our investment funds currently have investments or plan to invest in the future, or that other legislative

or regulatory measures that negatively affect their respective portfolio investments might be promulgated in any of the countries

in which they invest. The reporting related to such initiatives may divert the attention of our personnel and the management

teams of our portfolio companies. Moreover, sensitive business information relating to us or our portfolio companies could be

publicly released.

See “Risks Related to Our Business Operations—Risks Related to the Assets We Manage—Our funds make

investments in companies that are based outside of the United States, which may expose us to additional risks not typically

associated with investing in companies that are based in the United States” and Item 1 “Business—Regulatory and Compliance

Matters” for more information.

Increasing scrutiny from stakeholders on sustainability matters, including our ESG reporting, exposes us to reputational

and other risks.

We, our funds, and their portfolio companies face increasing public scrutiny related to sustainability and ESG

activitiesas well as ESG policies, processes, and/or performance, including from fund investors, stockholders, regulators, and

other stakeholders. We and they risk damage to our brand and reputation, if we or they fail or are perceived to have failed to act

responsibly in several areas, such as diversity, equity, and inclusion, environmental stewardship, support for local communities,

corporate governance and transparency, and considering ESG factors in our investment processes. In addition, different

stakeholder groups have divergent views on sustainability and ESG-related matters, including in the countries in which we

operate and invest, as well as states and localities where we serve public sector clients. This divergence increases the risk that

any action or lack thereof with respect to ESG matters will be perceived negatively by at least some stakeholders and adversely

impact our reputation and business. If we do not successfully manage various sustainability and ESG-related expectations

across the varied interests of our stakeholders, it could erode stakeholder trust, impact our reputation, and constrain our

investment opportunities. Adverse incidents with respect to sustainability and ESG-related activitiesor policies, processes, and/

or performance, including any statements regarding the investment strategies of our funds or our funds’ ESG efforts or

initiatives that are or are perceived to be inaccurate or misleading, could impact the value of our brand, or the brands of our

funds or their portfolio companies, the cost of our or their operations, and relationships with investors, all of which could

adversely affect our business and results of operations. In particular, there has been significant negative publicity and investor

and regulatory focus on the phenomenon of “greenwashing” (i.e., making inaccurate or misleading statements regarding the

sustainability or ESG-related characteristics of a product, business, or business practice). We could suffer significant

reputational damage and regulatory scrutiny if we are subject to “greenwashing” accusations, including with respect to

statements regarding the investment strategies of our funds or the ESG or sustainability efforts and initiatives of us, our funds,

and our portfolio companies. Such accusations could also result in litigation and adversely impact our ability to raise capital and

attract new investors.

Although we consider application of our sustainability strategy to be an opportunity to enhance or protect the

performance of our investments over the long-term, we cannot guarantee that our sustainability strategy, which depends in part

on qualitative judgments, will positively impact the financial or ESG performance of any individual investment or our funds as

a whole. Similarly, to the extent we engage or a third-party sustainability advisor engages with portfolio companies on ESG-

related practices and potential enhancements thereto, there is no guarantee that such engagements will improve the long-term

value of the investment. Successful engagement efforts on the part of us or a third-party sustainability or ESG advisor will

depend on our or any such third-party advisor’s ability to identify and analyze material sustainability or ESG-related and other

factors and their value, and there can be no assurance that the strategy or techniques employed will be successful. In addition,

our sustainability strategy, including the associated procedures and practices, is expected to change over time.

We and many of our portfolio companies undertake voluntary reporting on various sustainability matters, including,

for example, greenhouse gas emissions, supply chain practices, and human capital management. The standards for tracking and

reporting on sustainability matters are relatively new, have not been harmonized, and continue to evolve and we may fail to

successfully implement or comply with these rapidly developing sustainability standards and requirements. Moreover, in

conducting ESG reporting, we may seek to align with particular disclosure frameworks and/or reporting standards, which are

evolving. Our selection of disclosure frameworks and reporting standards may change from time to time and may result in a

lack of consistent or meaningful comparative data from period to period, as well as significant revisions to ESG goals,

initiatives, commitments, or objectives or reported progress in achieving the same. Due to the lack of a single, comprehensive

sustainability strategy that is utilized across all asset managers, we and our portfolio companies may utilize a combination of

frameworks or develop proprietary frameworks where necessary and relevant. In addition, we and our portfolio companies’

selection of reporting frameworks or standards, and other methodological choices, such as the use of certain performance

metrics, levels of quantification, value chain reporting, or materiality standards, may vary over time and may not always align

with evolving investor and activist expectations or market practices. We and our portfolio companies may suffer reputational

damage if our or their ESG disclosure is viewed as falling short of best practices, or if such reporting indicates ESG

performance that does not meet investor, activist, employee, customer, or other stakeholder expectations. With respect to both

voluntary and mandated ESG disclosures, we and our portfolio companies may not successfully implement measurement

processes and disclosure controls and procedures that meet evolving investor, activist, or regulatory expectations. In addition,

enhancements to such processes and controls may be costly and give rise to significant administrative burdens. For example,

collecting, measuring, and reporting sustainability or ESG-related information and metrics can be costly, difficult, and time

consuming, is subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal, and

other risks. If we or our portfolio companies do not successfully implement controls related to reporting sustainability or ESG-

related information, this could result in legal liability and reputational damage, which could impact our ability to attract and

retain investors and employees.

It remains unclear what impact the United Kingdom’s exit from the European Union will have on the Company or the fund

portfolio companies.

Following the UK’s exit from the EEA on January 31, 2020, and the expiration of the transition period on December

31, 2020, EEA “passporting rights” facilitating market access in the EEA by UK firms, and into the UK by EEA firms, are no

longer available. Various EU laws have been adopted into domestic UK legislation and certain transitional regimes and

deficiency-correction powers exist to ease the transition.

The UK and the EEA announced, on December 24, 2020, that they had reached agreement on a Trade and Cooperation

Agreement (the “TCA”), which addresses the future relationship between the parties. The TCA was approved by the UK

Parliament on December 30, 2020, and was formally ratified by the European Parliament and has applied permanently since

May 1, 2021. While the TCA includes a commitment by the UK and the EEA to keep their markets open for persons wishing to

provide financial services through a permanent establishment, it does not substantively address future cooperation in the

financial services sector or reciprocal market access into the EEA by UK-based firms under equivalence arrangements or

otherwise.

While the TCA provides clarity in some areas, the impact of Brexit on our business operations in the UK and the EEA,

and on the private investment funds industry and global financial markets more broadly, remains uncertain. This is driven in

part by the ongoing uncertainty relating to equivalence and the extent to which the EEA will grant reciprocal access to UK

firms in the financial services sector. The implications and operation of the TCA may also be subject to change and/or develop

at short notice.

The UK has put in place a temporary regime, the TMPR, to allow EU AIFMs to continue to market those funds in the

UK that were in existence on December 31, 2020, on broadly the same terms as previously applied. However, the TMPR

expired on December 31, 2023.

As of January 1, 2021, our UK FCA-authorized affiliates, CECP and CELF, ceased to be entitled to exercise single

market passport rights to provide investment services in or into the EEA on a cross-border services basis. In addition,

Abingworth is no longer able to exercise a single market passport to market its funds in the EEA. Certain EEA investor-facing

activities previously carried on by CECP and CELF have been reorganized so that they are performed by different, EEA

established affiliates under alternative licensing arrangements. We also may continue to make changes to the arrangements in

the future. These arrangements may subject us to additional regulatory obligations and may impede our ability to raise capital

from EEA investors.

In this respect and otherwise, uncertainty about the way in which these and other complex issues will be resolved

could adversely affect us, our investment funds, and portfolio companies (especially if our investment funds include, or expose

them to, businesses that depend on access to the single market, the customs union, or whose value is affected adversely by the

UK’s future relationship with the EU). The size and importance of the UK’s economy, coupled with uncertainty or

unpredictability about the precise nature of its future legal, political, and economic relationship with the EU following the

implementation of the TCA (and any subsequent discussions between the UK and EU in respect of matters not within its scope)

may continue to cause instability, significant currency fluctuations, and/or other adverse effects on international markets,

international trade agreements, and/or other existing cross-border cooperation arrangements (whether economic, tax, fiscal,

legal, regulatory, or otherwise). In addition, Brexit could have a destabilizing effect if any other member states were to consider

withdrawing from the EU. The decision for any other member state to withdraw from the EU could exacerbate such uncertainty

and instability and may present similar and/or additional potential risks and consequences for us, our investment funds, and

fund portfolio companies.

Moreover, the development of the UK’s future legislative approach and the extent to which the UK diverges from EU

legislation remains uncertain. The Financial Services and Markets Act 2023 (“FSMA 2023”) is a significant piece of legislation

that received Royal Assent on June 29, 2023. FSMA 2023 provides the foundations for a major overhaul and restructuring of

the UK’s regulatory framework for financial services, payment services, and financial marketing infrastructure post-Brexit,

through the repeal of retained EU legislation, as well as migration of much of that law into regulatory rulebooks, and new

powers for the UK regulators. It is likely that legislative reform will be slow, and the HM Treasury confirmed that it expects it

will take a number of years to complete the process of revoking retained EU law alone. To the extent that the UK materially

diverges from the EU regime, compliance with two diverging regulatory regimes in the EU and UK requirements may continue

to increase the operational burden and cost to our operations in these jurisdictions.

These complex issues and other by-products of Brexit may increase the costs of having operations, conducting

business, and making investments in the UK and Europe. As a result, the performance of our funds that are focused on investing

in the UK, and to a lesser extent across Europe, may be disproportionately affected compared to those funds that invest more

broadly across global geographies or are focused on different regions.

The uncertainty surrounding the precise nature of the UK’s future legal relationship with the EU may continue to be a

source of significant exchange rate fluctuations and/or other adverse effects on international markets. Unhedged currency

fluctuations have the ability to adversely affect our funds and their underlying portfolio companies.

Changes to the regulatory regimes in the UK or the EU and its member states could materially affect our business

prospects and opportunities and increase our costs. In addition, Brexit could potentially disrupt the tax jurisdictions in which we

operate and affect the tax benefits or liabilities in these or other jurisdictions in a manner that is adverse to us and/or our funds.

We are subject to substantial risk of litigation and regulatory proceedings and may face significant liabilities and damage to

our professional reputation as a result of litigation and regulatory allegations and negative publicity.

In the ordinary course of business, we are subject to the risk of substantial litigation and face significant regulatory

oversight. In recent years, the volume of claims and the amount of potential damages claimed in such proceedings against the

financial services industry have generally been increasing. The investment decisions we make in our asset management

business and the activities of our investment professionals on behalf of portfolio companies of our carry funds may subject

them and us to the risk of third-party litigation arising from investor dissatisfaction with the performance of those investment

funds, alleged conflicts of interest, the activities of our portfolio companies, and a variety of other litigation claims and

regulatory inquiries and actions. From time to time, we and our portfolio companies have been and may be subject to regulatory

actions and shareholder class action suits relating to transactions in which we have agreed to acquire public companies.

To the extent that investors in our investment funds suffer losses resulting from fraud, gross negligence, willful

misconduct, or other similar misconduct, investors may have remedies against us, our investment funds, our principals, or our

affiliates. Heightened standards of care or additional fiduciary duties may apply in certain of our managed accounts or other

advisory contracts. To the extent we enter into agreements with clients containing such terms or applicable law mandates a

heightened standard of care or duties, we could, for example, be liable to certain clients for acts of simple negligence or breach

of such duties, which might include the allocation of a client’s funds to our affiliated funds. Even in the absence of misconduct,

we may be exposed to litigation or other adverse consequences where investments perform poorly and investors in or alongside

our funds experience losses. The general partners and investment advisers to our investment funds, including their directors,

officers, other employees, and affiliates, are generally indemnified by our funds with respect to their conduct in connection with

the management of the business and affairs of our investment funds. If a particular fund has an indemnification obligation to us,

but such fund’s assets have been depleted or distributed to the relevant fund investors, such fund may have insufficient assets to

cover its indemnification obligation and the Company could suffer financial losses.

Defending against litigation could be costly. Such litigation costs may not be recoverable from insurance or other

indemnification. Carlyle has previously recovered significant amounts of insurance proceeds. As a general matter, we expect

that the cost of insurance will increase significantly, and we do not believe we will recover the same amount of insurance

proceeds as we have in prior years.

The laws and regulations governing the limited liability of such issuers and portfolio companies vary from jurisdiction

to jurisdiction, and in certain contexts the laws of certain jurisdictions may provide not only for carve-outs from limited liability

protection for the issuer or portfolio company that has incurred the liabilities, but also for recourse to assets of other entities

under common control with, or that are part of the same economic group as, such issuer. For example, if one of our portfolio

companies is subject to bankruptcy or insolvency proceedings in a jurisdiction and is found to have liabilities under the local

consumer protection, labor, tax, or bankruptcy laws, the laws of that jurisdiction may permit authorities or creditors to file a lien

on, or to otherwise have recourse to, assets held by other portfolio companies (including the Company) in that jurisdiction.

There can be no assurance that the Company will not be adversely affected as a result of the foregoing risks.

If any litigation or regulatory actions were brought against us and resulted in a finding of substantial legal liability, the

lawsuit could materially adversely affect our business, results of operations, or financial condition, or cause significant

reputational harm to us, which could materially impact our business. Recently, there has been an elevated level of focus put on

our industry and companies in which our funds are invested, including increased focus on externalities of business activities,

such as ESG considerations. See “Risks Related to Regulation and Litigation—Extensive regulation in the United States and

abroad affects our activities, increases the cost of doing business and creates the potential for significant liabilities and

penalties.” We depend to a large extent on our business relationships and our reputation for integrity and high-caliber

professional services to attract and retain investors and to pursue investment opportunities for our funds. As a result, allegations

of improper conduct by private litigants (including investors in or alongside our funds), regulators, or employees, whether the

ultimate outcome is favorable or unfavorable to us, as well as negative publicity and press speculation about us, our investment

activities, the private equity industry in general, or our workplace, whether or not valid, may harm our reputation, which may be

more damaging to our business than to other types of businesses.

In addition, with a workforce composed of many highly paid professionals, we face the risk of litigation relating to

claims for compensation, which may, individually or in the aggregate, be significant in amount. The cost of settling any such

claims could negatively impact our business, results of operations, and financial condition.

Our affiliated subsidiaries serve as the general partners of many of our managed funds and could have liability for certain

fund obligations.

Our affiliated subsidiaries serve as a general partner of many of our funds. As such, under applicable law and the fund

partnership agreements, our subsidiaries could have liability for obligations of our funds if such funds have insufficient assets to

pay such obligations themselves, including contractual obligations, obligations to repay fund indebtedness, uninsured

contingent obligations for litigation damages awards, or taxes determined to be owed by the funds. In general, the funds

indemnify us for such obligations; but if the relevant funds’ assets have been depleted or distributed to fund investors, such

fund may be unable to pay such indemnification obligation to us, and we could suffer significant loss and expense.

Employee misconduct or fraud could harm us and subject us to significant legal liability and reputational harm, which

could impair our ability to attract and retain investors in our funds. Fraud, other deceptive practices, or other misconduct at

our portfolio companies could similarly subject us to liability and reputational damage and also harm performance.

There have been a number of highly publicized cases involving fraud or other misconduct by employees in the

financial services industry in recent years, and there is a risk that our employees or advisors could engage in misconduct or

fraud that adversely affects our business. Misconduct or fraud by employees, advisors, or other third-party service providers

could cause significant losses. Employee misconduct or fraud could include, among other things, binding the Company to

transactions that exceed authorized limits or present unacceptable risks and other unauthorized activities or concealing

unsuccessful investments (which, in either case, may result in unknown and unmanaged risks or losses), or otherwise charging

(or seeking to charge) inappropriate expenses or engaging in inappropriate or unlawful behavior or actions directed toward

other employees. It is not always possible to deter misconduct or fraud by employees or service providers, and the precautions

we take to detect and prevent this activity may not be effective in all cases. In the current hybrid work environment, we may

have less of an ability to supervise our employees, which could expose us to an enhanced risk of misconduct or fraud.

Our ability to attract and retain investors and to pursue investment opportunities for our investment funds depends

heavily upon the reputation of our professionals, particularly our senior Carlyle professionals. Because of our diverse business

and the regulatory regimes under which we operate, we are subject to a number of obligations and standards (and related

policies and procedures) arising from our asset management business and our authority over the assets managed by our asset

management business. The violation of these obligations and standards (and related policies and procedures) by any of our

employees would adversely affect us and our investment funds and investors. For example, we could lose our ability to raise

new investment funds if any of our “covered persons” is the subject of a criminal, regulatory, or court order or other

disqualifying event. See “Risks Related to Regulation and Litigation—Extensive regulation in the United States and abroad

affects our activities, increases the cost of doing business and creates the potential for significant liabilities and penalties.” In

addition, in certain jurisdictions, we may be liable for certain social media statements made by our employees. For example,

any statements an employee makes online in a personal capacity (whether or not such employee identifies online as an

employee of the Company) could still be attributed to Carlyle under certain regulations. Expressing personal views in a way

that implies corporate endorsement could create misunderstandings and have adverse consequences for us and our employees.

Our business often requires that we deal with confidential matters of great significance to companies in which our

investment funds may invest. If our employees, advisors, or other third-party service providers were to use or disclose

confidential information improperly, we could suffer serious harm to our reputation, financial position, and current and future

business relationships, as well as face potentially significant litigation. It is not always possible to detect or deter employee

misconduct or fraud, including financial fraud, the misappropriation of funds of our business or our investment funds, or

inappropriate or unlawful behavior or actions directed toward other employees, and the extensive precautions we take to detect

and prevent this activity may not be effective in all cases. If any of our employees were to engage in misconduct or fraud or

were to be accused of such misconduct or fraud, whether or not substantiated, our business and our reputation could be

adversely affected and a loss of investor confidence could result, which would adversely impact our ability to raise future funds.

In recent years, the U.S. Department of Justice (the “DOJ”) and the SEC have devoted greater resources to

enforcement of the FCPA. In addition, the United Kingdom and other jurisdictions have significantly expanded the reach of

their anti-bribery laws. While we have developed and implemented policies and procedures designed to ensure compliance by

us and our personnel with the FCPA and the UK anti-bribery laws, such policies and procedures may not be effective in all

instances to prevent violations. Any determination that we have violated the FCPA, the UK anti-bribery laws, or other

applicable anticorruption laws could subject us to, among other things, civil and criminal penalties, material fines, profit

disgorgement, injunctions on future conduct, securities litigation, and a general loss of investor confidence, any one of which

could adversely affect our business prospects, financial position, or the market value of our common stock.

In addition, we will also be adversely affected if there is fraud, other deceptive practices, or other misconduct by

personnel of the portfolio companies in which our funds invest, including such activities that predate our acquisition of the

portfolio company. For example, improper or illegal conduct by personnel at our portfolio companies or failure by such

personnel to comply with anti-bribery, trade sanctions, anti-harassment, legal, and regulatory requirements could adversely

affect our business and reputation. Such misconduct or fraud could also undermine any due diligence efforts with respect to

such companies and could negatively affect the valuation of a fund’s investments.

Certain policies and procedures implemented to mitigate potential conflicts of interest and address certain regulatory

requirements may reduce the synergies across our various businesses and inhibit our ability to maintain our collaborative

culture.

We consider our “One Carlyle” culture and the ability of our professionals to communicate and collaborate across

funds, industries, and geographies one of our significant competitive strengths. As a result of the expansion of our platform into

various lines of business in the asset management industry, our acquisition of new businesses, and the growth of our managed

account business, we are subject to a number of actual and potential conflicts of interest and subject to greater regulatory

oversight than if we had one line of business. For example, certain regulatory requirements mandate us to restrict access by

certain personnel in our funds to information about certain transactions or investments being considered or made by those

funds. In addition, as we continue to expand our platform, the allocation of investment opportunities among our investment

funds is expected to become more complex. In addressing these conflicts and regulatory requirements across our various

businesses, we have and may continue to implement certain policies and procedures, such as information barriers. As a practical

matter, the establishment and maintenance of such information barriers means that collaboration between our investment

professionals across various platforms or with respect to certain investments may be limited, reducing potential synergies that

we cultivate across these businesses. For example, although we maintain ultimate control over the Global Investment Solutions

segment’s constituent firm, AlpInvest, we have established an information barrier between the management teams at AlpInvest

and the rest of Carlyle. See “Risks Related to Our Business Operations—Risks Related to the Assets We Manage—Our Global

Investment Solutions business is subject to additional risks.” In addition, we may come into possession of material non-public

information with respect to issuers in which we may be considering making an investment. Consequently, we may be precluded

from providing such information or other ideas to our other businesses that could benefit from such information.

Our failure to deal appropriately with conflicts of interestin our investment business could damage our reputation and

adversely affect our businesses.

As we have expanded and as we continue to expand the number and scope of our businesses, we increasingly confront

potential conflicts of interest relating to our funds’ investment activities. In this respect, investment manager conflicts of interest

continue to be a significant area of focus for regulators and the media. Because of our size and the variety of businesses and

investment strategies that we pursue, we may face a higher degree of scrutiny compared with investment managers that are

smaller or focus on fewer asset classes. Certain of our funds may have overlapping investment objectives, including funds that

have different fee structures and/or investment strategies that are more narrowly focused. Potential conflicts may arise with

respect to allocation of investment opportunities among us, our funds, and our affiliates, including to the extent that the fund

documents do not mandate a specific investment allocation. For example, we may allocate an investment opportunity that is

appropriate for two or more investment funds in a manner that excludes one or more funds or results in a disproportionate

allocation based on factors or criteria that we determine, such as sourcing of the transaction, specific nature of the investment,

or size and type of the investment, among other factors. We also may decide to provide a co-investment opportunity to certain

investors in lieu of allocating a piece of the investment to our funds. In addition, the challenge of allocating investment

opportunities to certain funds may be exacerbated as we expand our business to include more lines of business, including more

public vehicles. Allocating investment opportunities appropriately frequently involves significant and subjective judgments.

The risk that fund investors or regulators could challenge allocation decisions as inconsistent with our obligations under

applicable law, governing fund agreements, or our own policies cannot be eliminated. Moreover, the perception of

noncompliance with such requirements or policies could harm our reputation with fund investors.

In addition, we may cause different funds to invest in a single portfolio company, for example, where the fund that

made an initial investment no longer has capital available to invest. We also may cause different funds that we manage to

purchase different classes of securities in the same portfolio company. For example, one of our CLO funds could acquire a debt

security issued by the same company in which one of our private equity funds owns common equity securities. A direct conflict

of interest could arise between the debt holders and the equity holders if such a company were to develop insolvency concerns,

and we would have to carefully manage that conflict. A decision to acquire material non-public information about a company

while pursuing an investment opportunity for a particular fund gives rise to a potential conflict of interest when it results in our

having to restrict the ability of other funds to take any action with respect to that company. Our affiliates or portfolio companies

may be service providers or counterparties to our funds or portfolio companies and receive fees or other compensation for

services that are not shared with our fund investors. In such instances, we may be incentivized to cause our funds or portfolio

companies to purchase such services from our affiliates or portfolio companies rather than an unaffiliated service provider even

though a third-party service provider could potentially provide higher quality services or offer them at a lower cost. In addition,

conflicts of interest may exist in the valuation of our investments, as well as the personal trading of employees and the

allocation of fees and expenses among us, our funds and their portfolio companies, and our affiliates. Moreover, in certain,

infrequent instances we may purchase an investment alongside one of our investment funds or sell an investment to one of our

investment funds and conflicts may arise in respect of the allocation, pricing, and timing of such investments and the ultimate

disposition of such investments. A failure to appropriately deal with these conflicts, among others, could negatively impact our

reputation and ability to raise additional funds or result in potential litigation or regulatory action against us. Any steps taken by

the SEC to preclude or limit certain conflicts of interest would make it more difficult for our funds to pursue transactions that

may otherwise be attractive to the fund and its investors, which may adversely impact fund performance.

Risks Related to Our Business Operations

Risks Related to the Assets We Manage

The asset management business is intensely competitive.

The asset management business is intensely competitive, with competition based on a variety of factors, including

investment performance, business relationships, quality of service provided to clients, investor availability of capital and

willingness to invest, fund terms (including fees and liquidity terms), brand recognition, types of products offered,

consideration of ESG issues, and business reputation. Our investment business, as well as our investment funds, competes with

a number of private funds, specialized investment funds, funds structured for individual investors, hedge funds, funds of hedge

funds and other sponsors managing pools of capital, as well as corporate buyers, traditional asset managers, commercial banks,

investment banks, and other financial institutions (including sovereign wealth funds), andwe expect that competition will

continue to increase. For example, certain traditional asset managers have developed their own private equity and retail

platforms and are marketing other asset allocation strategies as alternatives to fund investments. In addition, developments in

financial technology, or fintech, such as distributed ledger technology, or blockchain, have the potential to disrupt the financial

industry and change the way financial institutions, as well as asset managers, do business. A number of factors serve to increase

our competitive risks:

•a number of our competitors in some of our businesses have greater financial, fundraising, technical, research,

marketing, and other resources and more personnel than we do;

•fund investors may reduce their investments in our funds or decrease their allocations in new funds based on a

variety of factors, such as the occurrence of an economic downturn, their available capital, regulatory

requirements, a desire to consolidate their relationships with investment firms, or other considerations;

•several of our competitors have significant amounts of capital, and many of them have similar investment

objectives to ours, which may create additional competition for investment opportunities and may reduce the

size and duration of pricing inefficiencies that many alternative investment strategies seek to exploit;

•some of our competitors, particularly strategic competitors, may have a lower cost of capital, which may be

exacerbated by limits on the deductibility of interest expense;

•some of our competitors may have higher risk tolerances, different risk assessments, or lower return

thresholds, which could allow them to consider a wider variety of investments and to bid more aggressively

than us for investments that we want to make or seek exit opportunities through different channels, such as

special purpose acquisition vehicles;

•some of our competitors may be subject to less regulation and, accordingly, may have more flexibility to

undertake and execute certain businesses or investments than we do and/or bear less compliance expense than

us;

•some of our competitors may have more flexibility than us in raising certain types of investment funds under

the investment management contracts they have negotiated with their investors;

•some of our competitors may be more successful than us in development of new products to address investor

demand for new or different investment strategies and/or regulatory changes, including with respect to

products with mandates that incorporate ESG considerations, or products that are developed for individual

investors or that target insurance capital;

•some of our competitors may have better expertise or be regarded by investors as having better expertise in a

specific asset class or geographic region than we do;

•our competitors that are corporate buyers may be able to achieve synergistic cost savings in respect of an

investment, which may provide them with a competitive advantage in bidding for an investment;

•our competitors have instituted or may institute low cost, high speed financial applications and services based

on artificial intelligence and new competitors may enter the asset management space using new investment

platforms based on artificial intelligence;

•there are relatively few barriers to entry impeding the formation of new investment firms, and the successful

efforts of new entrants into our various businesses, including former “star” portfolio managers at large

diversified financial institutions as well as such institutions themselves, is expected to continue to result in

increased competition;

•some investors may prefer to pursue investments directly instead of investing through one of our funds;

•some investors may prefer to invest with an investment manager that is not publicly traded or is smaller with

only one or two investment products that it manages; and

•other industry participants will, from time to time, seek to recruit our investment professionals and other

employees away from us.

We may lose investment opportunities in the future if we do not match investment prices, structures, products, or terms

offered by competitors. Alternatively, we may experience decreased rates of return and increased risks of loss if we match

investment prices, structures, products, and terms offered by competitors. Moreover, if we are forced to compete with other

asset managers on the basis of price, we may not be able to maintain our current fund fee and carried interest terms. We have

historically competed primarily on the performance of our funds, and not on the level of our fees or carried interest relative to

those of our competitors. However, there is a risk that fees and carried interest in the investment management industry will

decline, without regard to the historical performance of a manager. Fee or carried interest income reductions on existing or

future funds, without corresponding decreases in our cost structure, would adversely affect our revenues and profitability.

In addition, the attractiveness of our investment funds relative to investments in other investment products could

decrease depending on economic conditions. Moreover, any new or incremental regulatory measures for the U.S. financial

services industry may increase costs and create regulatory uncertainty and additional competition for many of our funds. See

“Risks Related to Our Business Operations—Risks Related to the Assets We Manage—Our investors may negotiate to pay us

lower management fees and the economic terms of our future funds may be less favorable to us than those of our existing funds,

which could adversely affect our revenues.”

This competitive pressure could adversely affect our ability to make successful investments and limit our ability to

raise future investment funds, either of which would adversely impact our business, revenue, results of operations, and cash

flow.

Poor performance of our investment funds would cause a decline in our revenue, income, and cash flow, may obligate us to

repay carried interest previously paid to us, and could adversely affect our ability to raise capital for future investment

funds.

In the event that any of our investment funds were to perform poorly, our revenue, income, and cash flow would

decline. Investors could also demand lower fees or fee concessions for existing or future funds, which would likewise decrease

our revenue or require us to record an impairment of intangible assets and/or goodwill in the case of an acquired business. In

some of our funds, such as our carry funds, a reduction in the value of the portfolio investments held in such funds could result

in a reduction in the carried interest we earn or in our management fees. In our CLOs, defaults or downgrades of the CLOs’

underlying collateral obligations could cause failures of certain over collateralization tests and the potential for insufficient

funds to pay expected management fees on any such CLO, which would result in either a temporary deferral or permanent loss

of such management fees. See “Risks Related to Our Business Operations—Risks Related to the Assets We Manage—Our

CLO business and investment into CLOs involves certain risks.”

We also could experience losses on our investment of our own capital into our funds as a result of poor performance

by our investment funds. If, as a result of poor performance of later investments in a carry fund’s life, the fund does not achieve

certain investment returns for the fund over its life, we will be obligated to repay the amount by which carried interest that was

previously distributed to us exceeds the amount to which we are ultimately entitled. These repayment obligations may be

related to amounts previously distributed to our senior Carlyle professionals prior to the completion of our initial public

offering, with respect to which our stockholders did not receive any benefit. See “Risks Related to Our Business Operations—

Risks Related to the Assets We Manage—We may need to pay “giveback” obligations if and when they are triggered under the

governing agreements with our investors” and Note 9 to the consolidated financial statements in Part II, Item 8 of this Annual

Report on Form 10-K.

Poor performance of our investment funds could make it more difficult for us to raise new capital. Investors in our

funds may decline to invest in future investment funds we raise. Investors and potential investors in our funds continually assess

our investment funds’ performance, and our ability to raise capital for existing and future investment funds and avoid excessive

redemption levels will depend on our investment funds’ continued satisfactory performance. Accordingly, poor fund

performance may deter future investment in our funds and thereby decrease the capital invested in our funds and, ultimately,

our management fee revenue.

The historical returns attributable to our funds, including those presented in this report, should not be considered as

indicative of the future results of our funds or of our future results or of any returns expected on an investment in our

We have presented in this Annual Report on Form 10-K information relating to the historical performance of our

investment funds. The historical and potential future returns of the investment funds that we advise, however, are not directly

linked to returns in our common stock. Therefore, any continued positive performance of the investment funds that we advise

will not necessarily result in positive returns on an investment in our common stock. However, poor performance of the

investment funds that we advise would cause a decline in our revenue from such investment funds and could therefore have a

negative effect on our performance, our ability to raise future funds, and in all likelihood the returns on an investment in our

Moreover, with respect to the historical returns of our investment funds:

•our historical returns derive largely from the performance of our existing funds, and we may create new funds

in the future that reflect a different asset mix and different investment strategies, as well as a varied

geographic and industry exposure as compared to our present funds, and any such new funds could have

lower returns than our existing or previous funds;

•the performance of our carry funds reflects our valuation of the unrealized investments held in those funds

using assumptions that we believe are reasonable under the circumstances, but the actual realized return on

these investments will depend on, among other factors, future operating results and the value of assets and

market conditions at the time of disposition all of which may differ from the assumptions on which the

valuations in our historical returns are based, which may adversely affect the ultimate value realized from

those unrealized investments;

•in recent years, there has been increased competition for private equity investment opportunities resulting

from the increased amount of capital invested in alternative investment funds, high liquidity in debt markets,

and strong equity markets, and the increased competition for investments may reduce our returns in the

future;

•the rates of returns of some of our funds in certain years have been positively influenced by a number of

investments that experienced rapid and substantial increases in value following the dates on which those

investments were made, which may not occur with respect to future investments;

•our investment funds’ returns in some years have benefited from investment opportunities and general market

conditions, including lower interest rates and rates of inflation than present market conditions, that may have

been significantly more favorable for generating positive performance than current market conditions or

market conditions that we may experience in the future and may not repeat themselves;

•our current or future investment funds might not be able to avail themselves of comparable investment

opportunities or market conditions, and the circumstances under which our funds may make future

investments may differ significantly from those conditions prevailing in the past;

•newly-established funds may generate lower returns during the period that they take to deploy their capital;

and

•the introduction of fund-level leverage in more recent funds has increased the rates of returns in those funds

compared to what they would have been without the use of such leverage.

Our performance in recent years has generally benefited from recent high multiples and asset prices. In the current

market environment, we expect that earning such returns on new investments will be much more difficult than in the past and

the future internal rate of return for any current or future fund may vary considerably from the historical internal rate of return

generated by any particular fund or for our funds as a whole. Future returns will also be affected by the risks described

elsewhere in this report, including risks of the industries and businesses in which a particular fund invests. See Part II, Item 7

“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment Analysis—Fund

Performance Metrics” for additional information.

Risk management activities may adversely affect the return on our and our funds’ investments.

When managing our exposure to market risks, we may (on our own behalf or on behalf of our funds) from time to time

use forward contracts, options, swaps, caps, collars, and floors or pursue other strategies or use other forms of derivative

instruments to limit our exposure to changes in the relative values of investments that may result from market developments,

including changes in prevailing interest rates, currency exchange rates, and commodity prices. The scope of risk management

activities undertaken by us is selective and varies based on the level and volatility of interest rates, prevailing foreign currency

exchange rates, the types of investments that are made, and other changing market conditions. We do not seek to hedge our

exposure in all currencies or all investments, which means that our exposure to certain market risks are not limited. Where

applicable, we use hedging transactions and other derivative instruments to reduce the effects of a decline in the value of a

position, but they do not eliminate the possibility of fluctuations in the value of the position or prevent losses if the value of the

position declines. However, such activities can establish other positions designed to gain from those same developments,

thereby offsetting the decline in the value of the position. Such transactions may also limit the opportunity for gain if the value

of a position increases. Moreover, it may not be possible to limit the exposure to a market development that is so generally

anticipated that a hedging or other derivative transaction cannot be entered into at an acceptable price. Currency fluctuations, in

particular, can have a substantial effect on our cash flow and financial condition.

The success of any hedging or other derivatives transactions generally will depend on our ability to correctly predict

market changes, the degree of correlation between price movements of a derivative instrument, the position being hedged, the

creditworthiness of the counterparty, and other factors. As a result, while we may enter into such a transaction in order to

reduce our exposure to market risks, the transaction may result in poorer overall firm or investment performance than if it had

not been executed. Such transactions may also limit the opportunity for gain if the value of a hedged position increases.

While such hedging arrangements may reduce certain risks, such arrangements themselves may entail certain other

risks. These arrangements may require the posting of cash collateral at a time when a fund has insufficient cash or illiquid assets

such that the posting of the cash is either impossible or requires the sale of assets at prices that do not reflect their underlying

value. Moreover, these hedging arrangements may generate significant transaction costs, including potential tax costs, which

may reduce the returns generated by the firm or a fund. See “Risks Related to Regulation and Litigation—Changing regulations

regarding derivatives and commodity interest transactions could adversely impact various aspects of our business.”

Pending and potential for further regulatory reform may create regulatory uncertainty for our portfolio companies and our

investment strategies and adversely affect the profitability of our portfolio companies, our business sectors, and our

business.

Since March 2018, the United States has imposed, or threatened to impose, a series of various tariffs on a variety of

goods imported into the United States, with an emphasis on those imported from China, the European Union, and Mexico.

These tariffs, or other changes in U.S. trade policy, have resulted in, and may continue to trigger, retaliatory actions by affected

countries, particularly China. In October 2022, the United States Trade Representative (“USTR”) announced the public

comment phase of its four-year, statutorily mandated review of the China Section 301 tariffs. Following the announcement, the

USTR solicited additional information from interested parties in regard to their investigation. Based upon administration

officials’ public statements, it appears increasingly likely that such review will continue into 2024. However, it is unclear if any

tariffs will be removed, modified, or increased as a result of the investigation.

The U.S. government has also implemented and expanded a number of economic sanctions programs and export

controls that target Chinese entities and nationals on national security grounds, and has imposed restrictions on our ability to

acquire and retain interests in the securities of certain Chinese entities. These initiatives target, for example, China’s response to

political demonstrations in Hong Kong, China’s conduct concerning the treatment of Uighurs and other ethnic minorities in its

Xinjiang province, and certain Chinese entities designated by the U.S. government as Communist Chinese military companies,

among other things.

Geopolitical tensions remain elevated and further changes to foreign direct investment laws remain possible. In August

2023, the U.S. Department of the Treasury issued an Advanced Notice of Proposed Rulemaking to create an outbound

investment screening regime to prevent U.S. capital from contributing to the development of force-multiplying technologies in

the semiconductor, quantum, and artificial intelligence sectors in certain jurisdictions, such as China. An ongoing concern

among U.S. policymakers is that U.S. investment, particularly in China, facilitates the transfer or buildup of technology and

know-how that could strengthen another country’s civil and military capabilities to the detriment of the United States. Another

ongoing concern is U.S. supply chain security—the ability to ensure access to critical goods and services in the face of

disruptions arising from conflict, economic coercion, or natural disasters. An outbound investment screening could, depending

upon scope, limit our ability to make certain investments without obtaining U.S. government approval. In addition, foreign

direct investment laws in non-U.S. jurisdictions also may require approvals, which can delay the investment or divestment of

assets in a fund. The U.S. government also may, through law or regulation, decide to modify the U.S. export controls regime to

further restrict technology exports to certain jurisdictions.

The majority of U.S. states have passed or may consider foreign direct investment laws. Most of these laws are aimed

at preventing ownership of real property, directly or indirectly, by persons or entities from “countries of concern,” including

China. The evolution of these laws remains fluid but could result in certain restrictions on a fund’s ability to invest in certain

types of real property in a state.

Any governmental action, including such actions noted above, has the potential to increase costs, decrease margins,

reduce the competitiveness of products and services offered by current and future portfolio companies, and adversely affect the

revenues and profitability of companies whose businesses rely on goods imported from or exported to any country impacted by

such policies. In addition, these actions may adversely affect our suppliers and certain other customers of our portfolio

companies, which could amplify the negative impact on our operating results or future cash flows.

Our asset management business depends in large part on our ability to raise capital from third-party investors. If we are

unable to raise capital from third-party investors, we would be unable to collect management fees or deploy their capital into

investments and potentially collect carried interest, which would materially reduce our revenue and cash flow and adversely

affect our financial condition.

We raised$118.3 billion in new capital commitments in the last three years, with 2023 fundraising being driven by

third-party capital raised in our strategic solutions business, fundraising in our Asia Buyout business (Carlyle Japan partners

and Carlyle Asia Partners), and our flagship Secondaries and Co-Invest funds within our Global Investment Solutions segment.

We cannot assure that our prior success in raising capital will continue in the future. In this respect, we anticipate the

fundraising landscape will continue to be increasingly competitive as limited partners continue to reassess their portfolio

allocation targets in light of market volatility and their liquidity requirements. As a result, fundraising in certain products—

particularly in corporate private equity strategies—may take longer to complete and fund sizes may not meet levels they

otherwise would in a more favorable market environment. Slowdowns in fundraising may also delay catch-up management fees

that would be charged to fund investors in subsequent closings and smaller fund sizes could result in lower management fees in

the future.

Our ability to raise capital from third-party investors depends on a number of factors, including certain factors that are

outside our control. Certain of these factors, such as economic and market conditions (including the performance of the stock

market), the pace of distributions from our funds and from the funds of other asset managers, or the asset allocation rules or

regulations or investment policies to which such third-party investors are subject, whether by their own policy or the laws and

regulations of their respective jurisdictions, could inhibit or restrict the ability of third-party investors to make investments in

our investment funds. For example, state politicians and lawmakers across a number of states, including Maryland and

Pennsylvania, have continued to put forth proposals or expressed intent to take steps to reduce or minimize the ability of their

state pension funds to invest in alternative asset classes, including by proposing to increase the reporting or other obligations

applicable to their state pension funds that invest in such asset classes. Such proposals or actions would potentially discourage

investment by such state pension funds in alternative asset classes by imposing meaningful compliance burdens and costs on

them, which could adversely affect our ability to raise capital from such state pension funds. Other states could potentially take

similar actions, which may further impair our access to capital from an investor base that has historically represented a

significant portion of our fundraising.

Third-party investors in private equity, real assets, and private credit funds typically use distributions from prior

investments to meet future capital calls. In cases where valuations of existing investments fall, the investment pace is delayed

and/or the pace of distributions slows, investors may be unable or unwilling to make new commitments or fund existing

commitments to third-party management investment funds such as those advised by us. Moreover, many funds sponsored by us

and our competitors have in recent years invested more rapidly than in the past. As a result, investors may delay making new

commitments until such time these investments start distributing capital.

There can be no assurance that historical or current levels of commitments to our funds will continue. For example,

there is a continuing shift away from defined benefit pension plans to defined contributions plans, which could reduce the

amount of assets available for us to manage on behalf of certain of our clients. In addition, investors may downsize their

investment allocations to alternative managers, including private funds and fund of funds vehicles, to rebalance a

disproportionate weighting of their overall investment portfolio among asset classes. Investors may also seek to consolidate

their investments with a smaller number of investment managers or prefer to pursue investments directly instead of investing

through our funds, each of which could impact the amount of allocations they make to our funds. For example, certain

institutional investors are demonstrating a preference to in-source their own investment professionals and to make direct

investments in alternative assets without the assistance of alternative asset advisers like us. Such institutional investors may

become our competitors and could cease to be our clients.

Moreover, as some existing investors cease or significantly curtail making commitments to alternative investment

funds, we may need to identify and attract new investors in order to maintain or increase the size of our investment funds. The

ongoing changes in international and domestic tax regulations, including BEPS, may adversely impact the tax neutrality of our

funds, which could in turn limit investment in our funds from certain classes of investors. We are working to create avenues

through which we expect to attract a new base of individual investors. There can be no assurances that we can find or secure

commitments from those new investors. Our ability to raise new funds could similarly be hampered if the general appeal of

private equity and alternative investments were to decline.

An investment in a private equity, credit, or real estate fund is more illiquid and the returns on such investment may be

more volatile than an investment in securities for which there is a more active and transparent market. Private equity, credit, and

real estate investments could fall into disfavor as a result of concerns about liquidity and short-term performance. Such

concerns could be exhibited, in particular, by public pension funds, which have historically been among the largest investors in

alternative assets. Concerns with liquidity could cause such public pension funds to reevaluate the appropriateness of alternative

In addition, the evolving preferences of our fund investors may necessitate that alternatives to the traditional

investment fund structure, such as managed accounts, smaller funds, and co-investment vehicles, become a larger part of our

business going forward. Certain investors have also implemented or may implement restrictions against investing in certain

types of asset classes or sectors, such as hydrocarbons, which could affect our ability to raise new funds focused on those asset

classes, such as funds focused on conventional energy or natural resources, and which could have a negative impact on our

ability to exit certain of our energy investments, or our ability to invest capital in our conventional energy funds. Given that

funds focused on investing in carbon-based energy remain a part of our business (4% of total AUM as of December 31, 2023),

the persistence of weakened market fundamentals in the energy sector could translate into future performance below investor

expectations which, together with negative sentiments around carbon energy funds, could result in less investor demand for

these funds in the future. If we were unable to raise the next generation of our energy-related funds, at the same levels or at all,

our fee-paying AUM and future management fees could be adversely impacted. This could increase our cost of raising capital at

the scale we have historically achieved.

Moreover, fund investors, shareholders, and prospective investors, including pension funds, are increasingly focused

on ESG matters and certain investors consider ESG factors in determining whether to invest in our funds and our common

stock. In addition, some fund investors use third-party benchmarks or scores to assess our ESG practices and may use this as an

input to decide whether to commit capital to us or invest in our funds and, further, may condition capital commitments to us on

our taking or refraining from taking certain actions. ESG ratings may vary widely in methodology, which often are not fully

publicly disclosed by ratings providers. Investors and stockholders may choose not to invest in our funds or exclude our

common stock from their investments for a range of reasons, including if our ESG practices or ratings do not fit their

investment profiles, if we fail or are perceived to fail to demonstrate adequate progress toward ESG goals, initiatives,

commitments, or objectives (including with respect to any climate-related targets and corresponding timelines), which could

adversely impact our reputation and our ability to raise capital, impair our ability to maintain the size of our funds, and could

cause the price of our common stock to decrease.

Conversely, anti-ESG sentiment has also gained momentum across the United States, with several states having

enacted or proposed “anti-ESG” policies, legislation, or issued related legal opinions. For example, boycott bills target financial

institutions that “boycott” or “discriminate against” companies in certain industries (e.g., energy and mining) and prohibit state

entities from doing business with such institutions and/or investing the state’s assets (including pension plan assets) through

such institutions, and ESG investment prohibitions require that state entities or managers/administrators of state investments

make investments based solely on pecuniary factors without consideration of ESG factors. If investors subject to such

legislation viewed our funds or ESG practices, including our climate-related goals and commitments, as being in contradiction

of such “anti-ESG” policies, legislation, or legal opinions, such investors may not invest in our funds, our ability to maintain the

size of our funds could be impaired, and it could negatively affect the price of our common stock.

The failure to successfully raise capital commitments to new investment funds may also expose us to credit risk in

respect of financing that we may provide to such funds. When existing capital commitments to a new investment fund are

insufficient to fund in full a new investment fund’s participation in a transaction, we may lend money to or borrow money from

financial institutions on behalf of such investment funds to bridge this difference and repay this financing with capital from

subsequent investors to the fund. Our inability to identify and secure capital commitments from new investors to these funds

may expose us to losses (in the case of money that we lend directly to such funds) or adversely impact our ability to repay such

borrowings or otherwise have an adverse impact on our liquidity position. Moreover, if we seek to expand into other business

lines, we may be unable to raise a sufficient amount of capital to adequately support such businesses. The failure of our

investment funds to raise capital in sufficient amounts could result in a decrease in our AUM, as well as management fee and

transaction fee revenue, or could result in a decline in the rate of growth of our AUM and management fee and transaction fee

revenue, any of which could have a material adverse impact on our revenues and financial condition. Our past experience with

growth of AUM provides no assurance with respect to the future.

We have increasingly undertaken business initiatives to increase the number and type of investment products we offer to

retail investors, which could expose us to new and greater levels of risk.

Although retail investors have been part of our historic distribution efforts, we have increasingly undertaken business

initiatives to increase the number and type of investment products we offer to high net worth individuals, family offices, and

other mass affluent investors. In some cases, we seek to distribute our unregistered funds to such retail investors indirectly

through feeder funds sponsored by brokerage firms, private banks, or other similar third-parties and, in other cases, directly to

qualified clients of private banks, independent investment advisors, and brokers. We also offer registered investment products

specifically designed for direct investment by both retail and institutional investors. Our initiatives to access retail investors

entail the investment of resources and our objectives may not be fully realized.

Accessing retail investors and selling retail directed products exposes us to new and greater levels of risk, including

heightened litigation and regulatory enforcement risks. To the extent we distribute retail products through new channels,

including through unaffiliated firms, we may not be able to effectively monitor or control the manner of their distribution,

which could result in litigation against us, including with respect to, among other things, claims that products distributed

through such channels are distributed to customers for whom they are unsuitable or distributed in any other inappropriate

manner. Although we seek to ensure that, through both due diligence and supervisory procedures, retail investors conduct

themselves responsibly when accessing our investment products through these channels, to the extent that our investment

products are being distributed through third parties, we are exposed to reputational damage and possible legal liability to the

extent such third parties improperly sell our products to investors. Similarly, the hiring of employees to oversee independent

advisors and brokers presents risks if they fail to follow training, review, and supervisory procedures. In addition, the

distribution of retail products through new channels, whether directly or through market intermediaries, could expose us to

additional regulatory risk in the form of allegations of improper conduct and/or actions against us by state and federal regulators

in the United States and regulators in jurisdictions outside the United States with respect to, among other things, product

suitability, conflicts of interest, and the adequacy of disclosure to customers to whom our products are distributed through those

channels.

As we may seek to expand the distribution of products to retail investors outside of the United States, we are

increasingly exposed to risks in non-U.S. jurisdictions. While many of the risks we face in non-U.S. jurisdictions are similar to

those that we face in the distribution of products to retail investors in the United States, securities laws and other applicable

regulatory regimes can be extensive, complex, and vary by jurisdiction. In addition, the distribution of products to retail

investors outside of the United States may involve complex structures and market practices that vary by local jurisdiction. As a

result, this expansion subjects us to additional complexity, litigation, and regulatory risk.

In addition, our initiatives to expand our retail investor base, including outside of the United States, requires the

investment of significant time, effort, and resources, including the potential hiring of additional personnel, the implementation

of new operational, compliance, and other systems and process and the development or implementation of new technology.

There is no assurance that our efforts to grow the assets we mange on behalf of retail investors will be successful.

Our investors may negotiate to pay us lower management fees and the economic terms of our future funds may be less

favorable to us than those of our existing funds, which could adversely affect our revenues.

In connection with raising new funds or securing additional investments in existing funds, we negotiate terms for such

funds and investments with existing and potential investors. The outcome of such negotiations could result in our agreement to

terms that are materially less favorable to us than the terms of prior funds we have advised or funds advised by our competitors.

Such terms could restrict our ability to raise investment funds with investment objectives or strategies that compete with

existing funds, reduce fee revenues we earn, reduce the percentage of profits on third-party capital that we share in or add

expenses and obligations for us in managing the fund, or increase our potential liabilities, all of which could ultimately reduce

our profitability. In addition, a change in terms that increases the amount of fee revenue the fund investors are entitled to could

result in a significant decline in revenue generated from transaction fees. For instance, our more recent generations of U.S.,

Europe, and Asia buyout funds have increased the percentage of transaction fees that are shared with fund investors from 80%

to 100% of the allocable fees we generate. Given this change in terms, and to the extent we change our fee practices for other

successor funds, we could experience a meaningful decline in the amount of transaction fee revenue we earn. In particular, if

our fund investors do not continue to agree that we are permitted to retain fees we derive from capital markets transactions

involving our portfolio companies, the ability of our GCM group to produce fee revenue could be significantly hindered.

Further, as institutional investors increasingly consolidate their relationships with investment firms and competition

becomes more acute, we may receive more requests to modify the terms of our new funds, including reductions in management

fees. Any agreement to or changes in terms less favorable to us could result in a material decrease in our profitability.

Moreover, certain institutional investors have publicly criticized certain fund fee and expense structures, including

management fees. We have received and expect to continue to confront requests from a variety of investors and groups

representing investors to decrease fees and to modify our carried interest and incentive fee structures, which could result in a

reduction in or delay in the timing of receipt of the fees and carried interest and incentive fees we earn. In addition to

negotiating the overall fund rate of the management fees offered, certain fund investors have negotiated alternative management

fee structures in several of our investment funds. For example, certain funds have offered a management fee rate discount for

certain investors that came into the first closing of each fund. In certain cases, we have agreed to charge management fees based

on invested capital or net asset value as opposed charging management fees on committed capital. Further, the SEC’s focus on

certain fund fee and expense arrangements may lead to increased publicity that could cause fund investors to further resist

certain fees and expense reimbursements. Any modification of our existing fee or carry arrangements or the fee or carry

structures for new investment funds could adversely affect our results of operations. See “Risks Related to Our Business

Operations—Risks Related to the Assets We Manage—The asset management business is intensely competitive.”

We may need to pay “giveback” obligations if and when they are triggered under the governing agreements with our

investors.

If, at the end of any of the life of our Global Private Equity and Global Credit carry funds (or earlier with respect to

certain of our funds), the carry fund has not achieved investment returns that (in most cases) exceed the preferred return

threshold or (in almost all cases) the general partner receives net profits over the life of the fund in excess of its allocable share

under the applicable partnership agreement, we will be obligated to repay an amount equal to the extent to which carried

interest that was previously distributed to us exceeds the amounts to which we are ultimately entitled. This repayment

obligation is known as a “giveback” obligation. As of December 31, 2023, we had accrued a giveback obligation of$44.0

million, representing the giveback obligation that would need to be paid by the firm if the carry funds were liquidated at their

current fair values at that date, and of which approximately$23.7 million is attributable to us. The remaining obligations are

related to amounts previously distributed to our senior Carlyle professionals, the majority of which relates to the accrued

giveback obligation from CSP III and the Legacy Energy Funds.

When payment of a giveback obligation is anticipated (or “realized”), the portion of this liability that is expected to be

borne by the common stockholders (i.e., the amount not expected to be funded by Carlyle professionals) has the effect of

reducing our Distributable Earnings. Any remaining giveback obligation required to be funded on behalf of our funds would

generally be due upon the liquidation of the remaining assets from the funds.

If, as of December 31, 2023, all of the investments held by our carry funds were deemed worthless, the amount of

realized and distributed carried interest subject to potential giveback would have been$1.6 billion, on an after-tax basis where

applicable. As of December 31, 2023, we have realized$242.4 million in aggregate giveback obligations since inception, which

were funded primarily through collection of employee receivables related to giveback obligations and from Carlyle

professionals and other non-controlling interests for their portion of the obligation. Of the$242.4 million in aggregate giveback

obligations realized from inception to December 31, 2023,$72.3 million was attributable to Carlyle. See Part II, Item 7

“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial Measures—

Investment Income.”

Although a giveback obligation is specific to each person who received a distribution, and not a joint obligation, the

governing agreements of our funds generally provide that to the extent a recipient does not fund his or her respective share, then

we may have to fund such additional amounts beyond the amount of carried interest we retained, although we generally will

retain the right to pursue any remedies that we have under such governing agreements against those carried interest recipients

who fail to fund their obligations. As of December 31, 2023, approximately$20.3 million of our$44.0 million accrued

giveback obligation is attributable to various current and former senior Carlyle professionals. We have historically withheld a

portion of the cash from carried interest distributions to individual senior Carlyle professionals and other employees as security

for their potential giveback obligations. We may need to use or reserve cash to repay such giveback obligations instead of using

the cash for other purposes. See Part I, Item 1 “Business—Structure and Operation of Our Investment Funds—Incentive

Arrangements / Fee Structure” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results

of Operations—Contractual Obligations—Contingent Obligations (Giveback)” and Notes 2 and 9 to the consolidated financial

statements in Part II, Item 8 of this Annual Report on Form 10-K.

Third-party investors in substantially all of our carry funds have the right to remove the general partner of the fund for

cause, to accelerate the liquidation date of the investment fund without cause by a simple majority vote, and to terminate the

investment period under certain circumstances and investors in certain of the investment funds we advise may redeem their

investments. These events would lead to a decrease in our revenues, which could be substantial.

The governing agreements of almost all of our carry funds provide that, subject to certain conditions, third-party

investors in those funds have the right to remove the general partner of the fund for cause or to accelerate the liquidation date of

the investment fund without cause by a simple majority vote. In addition, our investment vehicles that are structured as “funds

of one,” or separately managed accounts, have a single investor or a few affiliated investors that typically have the right to

terminate the investment period or cause a dissolution of the vehicle under certain circumstances. These actions would result in

a reduction in management fees we would earn from such investment funds, vehicles, or accounts, and could result in a

significant reduction in the expected amounts of total carried interest and incentive fees from those investment funds, vehicles,

or accounts. Carried interest and incentive fees could be significantly reduced as a result of our inability to maximize the value

of investments by an investment fund during the liquidation process or in the event of the triggering of a “giveback” obligation.

Finally, the applicable investment funds, vehicles, or accounts would cease to exist after completion of liquidation and winding-

up.

In addition, the governing agreements of certain of our investment funds provide that in the event certain “key

persons” in our investment funds do not meet specified time commitments with regard to managing the fund (for example,

certain of the investment professionals serving on the investment committee or advising the fund), then investors in certain

funds have the right to vote to terminate the investment period by a simple majority vote in accordance with specified

procedures, accelerate the withdrawal of their capital on an investor-by-investor basis, or the fund’s investment period will

automatically terminate and the vote of a simple majority of investors is required to restart it. While we believe that our

investment professionals have appropriate incentives to remain in their respective positions, based on equity ownership, profit

participation, and other contractual provisions, we are not able to guarantee the ongoing participation of the management team

members in respect of our funds. In addition to having a significant negative impact on our revenue, earnings, and cash flow,

the occurrence of a key person event with respect to any of our investment funds would likely result in significant reputational

damage to us and could negatively impact our future fundraising efforts.

AlpInvest funds generally provide for suspension of the investment period if there is a key person event, the right of a

simple majority or a supermajority of investors to remove the general partner with cause and, in some cases, without cause, but

generally have not provided for liquidation without cause. Where AlpInvest funds include “key person” provisions, they are

focused on specific, existing AlpInvest personnel, as applicable.

In addition, because our investment funds generally have an adviser that is registered under the Advisers Act, the

management agreements of each of our investment funds would be terminated upon an “assignment” to a third-party of these

agreements without appropriate investor consent, which assignment may be deemed to occur in the event these advisers were to

experience a change of control. We cannot be certain that consents required to assignments of our investment management

agreements will be obtained if a change of control occurs. “Assignment” of these agreements without investor consent could

cause us to lose the fees we earn from such investment funds.

Third-party investors in our investment funds with commitment-based structures may not satisfy their contractual obligation

to fund capital calls when requested by us, which could adversely affect a fund’s operations and performance.

Investors in our carry funds make capital commitments to those funds that we are entitled to call from those investors

at any time during prescribed periods. We depend on investors fulfilling their commitments when we call capital from them in

order for those funds to consummate investments and otherwise pay their obligations (for example, management fees) when

due. Any investor that did not fund a capital call would generally be subject to several possible penalties, including having a

significant amount of its existing investment forfeited in that fund. However, the impact of the penalty is directly correlated to

the amount of capital previously invested by the investor in the fund and if an investor has invested little or no capital, for

instance, early in the life of the fund, then the forfeiture penalty may not be as meaningful. Investors may also negotiate for

lesser or reduced penalties at the outset of the fund, thereby inhibiting our ability to enforce the funding of a capital call. Our

use of subscription lines of credit to purchase an investment prior to calling capital from fund investors could increase the

prevalence of defaulting limited partners. Should the value of an investment funded through a fund line-of-credit decline,

especially early in a fund’s life-cycle where minimal capital has been contributed by the fund’s investors, a limited partner may

decide not to fund its commitment. In addition, third-party investors typically use distributions from prior investments to meet

future capital calls. In cases where valuations of investors’ existing investments fall and the pace of distributions slows,

investors may be unable to make new commitments to third-party managed investment funds such as those advised by us. If

investors were to fail to satisfy a significant amount of capital calls for any particular fund or funds, the operation and

performance of those funds could be materially and adversely affected.

In addition, our failure to comply with applicable pay-to-play laws, regulations, and/or policies adopted by a number

of states and municipal pension funds, as well as the New York Attorney General’s Public Pension Fund Reform Code of

Conduct, may, in certain instances, excuse a public pension fund investor from its obligation to make further capital

contributions relating to all or any part of an investment or allow it to withdraw from the fund. If a public pension fund investor

were to seek to be excused from funding a significant amount of capital calls for any particular fund or funds, the operation and

performance of those funds could be materially and adversely affected.

Valuation methodologies for certain assets in our funds can involve subjective judgments, and the fair value of assets

established pursuant to such methodologies may be incorrect, which could result in the misstatement of fund performance

and accrued performance allocations.

There are often no readily ascertainable market prices for a substantial majority of illiquid investments of our

investment funds. We determine the fair value of the investments of each of our investment funds at least quarterly based on the

fair value guidelines set forth by generally accepted accounting principles in the United States (“U.S. GAAP”). The fair value

measurement accounting guidance establishes a hierarchal disclosure framework that ranks the observability of market 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.

Investments for which market prices are not observable include, but are not limited to, illiquid investments in operating

companies, real estate, energy ventures, infrastructure projects, structured vehicles, and other funds, and encompass all

components of the capital structure, including equity, mezzanine, debt, preferred equity, and derivative instruments such as

options and warrants. Fair values of such investments are determined by reference to the market approach (i.e., multiplying a

key performance metric of the investee company or asset, such as EBITDA, by a relevant valuation multiple observed in the

range of comparable public entities or transactions, adjusted by management as appropriate for differences between the

investment and the referenced comparables), the income approach (i.e., discounting projected future cash flows of the investee

company or asset and/or capitalizing representative stabilized cash flows of the investee company or asset), and other

methodologies such as prices provided by reputable dealers or pricing services, option pricing models, replacement costs, and

estimates of net asset value for fund interests.

The determination of fair value using these methodologies takes into consideration a range of factors including but not

limited to the price at which the investment was acquired, the nature of the investment, local market conditions, the multiples of

comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of

the investment. These valuation methodologies involve a significant degree of management judgment. For example, as to

investments that we share with another sponsor, we may apply a different valuation methodology than the other sponsor does

and/or derive a different value than the other sponsor has derived on the same investment, which could cause some investors

and regulators to question our valuations.

Because there is significant uncertainty in the valuation of, or in the stability of the value of, illiquid investments, the

fair values of such investments as reflected in an investment fund’s net asset value do not necessarily reflect the prices that

would be obtained by us on behalf of the investment fund when such investments are realized. Realizations at values

significantly lower than the values at which investments had been reflected in prior fund net asset values would result in

reduced earnings or losses for the applicable fund, and potentially the loss of carried interest and incentive fees. Changes in

values attributed to investments from quarter to quarter may result in volatility in the net asset values and results of operations

that we report from period to period. In addition, a situation where asset values turn out to be materially different than values

reflected in prior fund net asset values could cause investors to lose confidence in us, which could in turn result in difficulty in

raising additional funds.

The due diligence process that we undertake in connection with investments by our investment funds may not reveal all facts

that may be relevant in connection with an investment.

Before making private equity and other investments, we conduct due diligence that we deem reasonable and

appropriate based on the known facts and circumstances applicable to each investment. The objective of the due diligence

process is to identify attractive investment opportunities based on known facts and circumstances and initial risk assessment

surrounding an investment and, depending on our ownership or control of private equity investments, prepare a framework that

may be used from the date of an acquisition to drive operational achievement and value creation. When conducting due

diligence, we may be required to evaluate important and complex business, financial, regulatory, tax, accounting, environmental

(including climate change), social, governance, and legal issues. Outside consultants, legal advisors, accountants, and

investment banks may be involved in the due diligence process in varying degrees depending on the type of investment.

Nevertheless, when conducting due diligence and making an assessment regarding an investment, we rely on the resources

available to us, including information provided by the target of the investment and, in some circumstances, third-party

investigations and analysis. The due diligence process may at times be subjective with respect to newly organized companies

for which only limited information is available. Due to intense competition in the marketplace, we may have less time than in

the past to complete our due diligence or our competitors may review less due diligence thereby increasing the speed with

which they complete their review. We cannot be certain that the due diligence investigation we carry out with respect to any

investment opportunity will reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment

opportunity. In this respect, information and data provided or utilized by third-party advisors during diligence may be

incomplete, inaccurate, or unavailable, and may cause us to incorrectly identify, prioritize, assess, or analyze or omit to examine

in detail the investee entity’s ESG practices and/or related risks and opportunities. Moreover, considering ESG factors when

evaluating an investment could result in the selection or exclusion of certain investments based on our or a third party advisor’s

view of certain ESG-related and other factors or could cause a fund to not make an investment that it may have otherwise made,

which carries risk that our funds may perform differently than investment funds that do not take the same ESG factors into

account in a similar manner. In addition, ESG factors are only some of the many factors we consider in making an investment,

and there is no guarantee that our consideration of ESG factors during due diligence will ultimately enhance the long-term value

of our investments.

The due diligence process in connection with carve-out transactions may underestimate the complexity and/or level of

dependence a business has on its parent company and affiliated entities. Given that a carve-out business often does not have

financial statements that accurately reflect its true financial performance as a stand-alone business, due diligence assessments of

such investments can be particularly difficult. Instances of fraud, accounting irregularities and other improper, illegal, or

deceptive practices can be difficult to detect, and fraud and other deceptive practices can be widespread in certain jurisdictions.

Several of our funds invest in emerging market countries that may not have established laws and regulations that are as

stringent as in more developed nations, or where existing laws and regulations may not be consistently enforced. For example,

our funds invest throughout jurisdictions that have material perceptions of corruption according to international rating

standards, such as China, India, Indonesia, Latin America, MENA, and Sub-Saharan Africa. Similarly, our funds invest in

companies in the United States and other jurisdictions and regions with low perceived corruption but whose business may be

conducted in other high-risk jurisdictions.

Due diligence on investment opportunities in these jurisdictions is frequently more complicated because consistent and

uniform commercial practices in such locations may not be developed or our access to information may be very limited. Fraud,

accounting irregularities, and deceptive practices can be especially difficult to detect in such locations. In addition, investment

opportunities may arise in companies that have historic and/or unresolved regulatory, tax, fraud or accounting related

investigations, audits or inquiries, and/or have been subjected to public accusations of improper behavior. However, even

heightened and specific due diligence and investigations with respect to such matters may not reveal or highlight all relevant

facts that may be necessary or helpful in evaluating such investment opportunity and/or will be able to accurately identify,

assess, and quantify settlements, enforcement actions, and judgments that may arise and which could have a material adverse

effect on the portfolio company’s business, financial condition, and operations, as well as potential significant harm to the

portfolio company’s reputation and prospects. We cannot be certain that our due diligence investigations will result in

investments being successful or that the actual financial performance of an investment will not fall short of the financial

projections we used when evaluating that investment. Failure to identify risks associated with our investments could have a

material adverse effect on our business.

Dependence on significant leverage in investments by our funds could adversely affect our ability to achieve attractive rates

of return on those investments.

Many of our carry funds’ investments rely heavily on the use of leverage, and our ability to achieve attractive rates of

return on investments will depend on our ability to access sufficient sources of indebtedness at attractive rates. For example, in

many private equity investments, indebtedness may constitute and historically has constituted up to 70% or more of a portfolio

company’s or real estate asset’s total debt and equity capitalization, including debt that may be incurred in connection with the

investment, whether incurred at or above the investment-level entity. The absence of available sources of sufficient debt

financing for extended periods of time could therefore materially and adversely affect our Global Private Equity businesses. At

the start of the COVID-19 pandemic, in an effort to ensure adequate liquidity for an unknown period of time and avoid potential

future disruptions in normal financial market function, many of our portfolio companies drew down available lines of credit in

excess of typical utilization. These precautionary efforts provided availability of working capital and avoided unnecessary

business disruption. Certain of these portfolio companies have retained or may retain this capital for an extended period.

Therefore, the leverage at these portfolio companies will increase.

An increase in either the general levels of interest rates or in the risk spread demanded by sources of indebtedness

would make it more expensive to finance those investments, thereby reducing returns. While increases in interest rates may lead

to higher risk adjusted returns for our Global Credit business, when coupled with restrictions on the deductibility of interest

expense, such increases may also lead to higher default rates and lower valuations of existing assets and cause deployment of

capital to slow, cash flow issues, and/or credit challenges if such interest rates have not otherwise been fixed or hedged.

Increases in interest rates could also make it more difficult to locate and consummate private equity investments because other

potential buyers, including operating companies acting as strategic buyers, may be able to bid for an asset at a higher price due

to a lower overall cost of capital or their ability to benefit from a higher amount of cost savings following the acquisition of the

asset. See “Risks Related to our Company— Adverse economic and market conditions and other events or conditions

throughout the world could negatively impact our business in many ways, including by reducing the value or performance of

the investments made by our investment funds and reducing the ability of our investment funds to raise capital, any of which

could materially reduce our revenue, earnings, and cash flow and adversely affect our financial prospects and condition.” In

addition, a portion of the indebtedness used to finance private equity investments often includes leveraged loans and high-yield

and other debt securities issued in the public capital markets and debt instruments privately placed with institutional investors in

the private capital markets. Availability of capital from the leveraged loan, high-yield, and private debt markets is subject to

significant volatility, and there may be times when we might not be able to access those markets at attractive rates, or at all,

when completing an investment. Certain investments may also be financed through borrowings on fund-level debt facilities,

which may or may not be available for a refinancing at the end of their respective terms. Moreover, to the extent there is a

reduction in the availability of financing for extended periods of time, the purchasing power of a prospective buyer may be

more limited, adversely impacting the fair value of our funds’ investments and thereby reducing the acquisition price. Finally,

recent developments in U.S. and international tax policy have significantly limited the availability of income tax deductions for

interest payments on leverage used to finance some of our funds’ investments. Interest deductibility rules continue to evolve,

and further restrictions and changes are anticipated in the U.S. and other jurisdictions. See “Risks Related to Taxation—

Changes in relevant tax laws, regulations, or treaties or an adverse interpretation of these items by tax authorities could

assessed to portfolio investments (companies) or fund income.” Such restrictions could reduce the after-tax rates of return on

the affected investments, which may have an adverse impact on our business and financial results.

Investments in highly leveraged entities are also inherently more sensitive to declines in revenue, increases in expenses

and interest rates, and adverse economic, market, and industry developments. Furthermore, the incurrence of a significant

amount of indebtedness by an entity could, among other things:

•subject the entity to a number of restrictive covenants, terms, and conditions, any violation of which could be

viewed by creditors as an event of default and could materially impact our ability to realize value from the

investment;

•allow even moderate reductions in operating cash flow to render the entity unable to service its indebtedness,

leading to a bankruptcy or other reorganization of the entity and a loss of part or all of the equity investment

in it;

•give rise to an obligation to make mandatory prepayments of debt using excess cash flow, which might limit

the entity’s ability to respond to changing industry conditions to the extent additional cash is needed for the

response, to make unplanned but necessary capital expenditures, or to take advantage of growth opportunities;

•limit the entity’s ability to adjust to changing market conditions, thereby placing it at a competitive

disadvantage compared to its competitors that have relatively less debt;

•limit the entity’s ability to engage in strategic acquisitions that might be necessary to generate attractive

returns or further growth; and

•limit the entity’s ability to obtain additional financing or increase the cost of obtaining such financing,

including for capital expenditures, working capital or other general corporate purposes.

As a result, the risk of loss associated with a leveraged entity is generally greater than for companies with

comparatively less debt. Similarly, the leveraged nature of the investments of our real assets funds increases the risk that a

decline in the fair value of the underlying real estate or tangible assets will result in their abandonment or foreclosure.

When our Global Private Equity funds’ portfolio investments reach the point when debt incurred to finance those

investments matures in significant amounts and must be either repaid or refinanced, those investments may suffer materially if

they have not generated sufficient cash flow to repay maturing debt and there is insufficient capacity and availability in the

financing markets to permit them to refinance maturing debt on satisfactory terms, or at all. If a limited availability of financing

for such purposes were to persist for an extended period of time, when significant amounts of the debt incurred to finance our

Global Private Equity funds’ portfolio investments came due, these funds could be materially and adversely affected.

Many of our Global Credit funds may choose to use leverage as part of their respective investment programs and

regularly borrow a substantial amount of their capital. The use of leverage poses a significant degree of risk and enhances the

possibility of a significant loss in the value of the investment portfolio. A fund may borrow money from time to time to

purchase or carry securities or may enter into derivative transactions (such as total return swaps) with counterparties that have

embedded leverage. The interest expense and other costs incurred in connection with such borrowing may not be recovered by

appreciation in the securities purchased or carried and will be lost, and the timing and magnitude of such losses may be

accelerated or exacerbated, in the event of a decline in the market value of such securities. Gains realized with borrowed funds

may cause the fund’s net asset value to increase at a faster rate than would be the case without borrowings. However, if

investment results fail to cover the cost of borrowings, the fund’s net asset value could also decrease faster than if there had

been no borrowings. Increases in interest rates could also decrease the value of fixed-rate debt investment that our investment

funds make. In addition, to the extent that any changes in tax law make debt financing less attractive to certain categories of

borrowers, this could adversely affect the investment opportunities for our credit-focused funds.

Any of the foregoing circumstances could have a material adverse effect on our results of operations, financial

condition, and cash flow.

High interest rates and challenging debt market conditions could negatively impact the values of certain assets or

investments and the ability of our funds and their portfolio companies to access the capital markets on attractive terms,

which could adversely affect investment and realization opportunities, lead to lower-yielding investments, and potentially

decrease our net income.

In 2022 and 2023, in light of increasing inflation, the U.S. Federal Reserve increased interest rates eleven times. While

policy rates have likely reached their terminal level, market participants remain uncertain about how long interest rates will stay

near current levels. Rising interest rates create downward pressure on the price of real estate and the value of fixed-rate debt

investments made by our funds. Moreover, our funds have faced, and could continue to face, difficulty in realizing value from

investments due to sustained declines in equity market values as a result of concerns regarding interest rates.

An increase in interest rates has and could continue to increase the cost of debt financing for the transactions our funds

pursue. In addition, asignificant contraction or weakening in the market for debt financing or other adverse change relating to

the terms of debt financing (such as, for example, higher equity requirements and/or more restrictive covenants), particularly in

the area of acquisition financings for private equity and real estate transactions, could have a material adverse effect on our

business. For example, a portion of the indebtedness used to finance certain fund investments often includes high-yield debt

securities issued in the capital markets. Availability of capital from the high-yield debt markets is subject to significant

volatility, and there may be times when we might not be able to access those markets at attractive rates, or at all, when

completing an investment. Moreover, the financing of acquisitions or the operations of our funds’ portfolio companies with

debtmay become less attractive due to limitations on the deductibility of corporate interest expense. See “Risks Related to

Taxation—Changes in relevant tax laws, regulations, or treaties or an adverse interpretation of these items by tax authorities

could negatively impact our effective tax rate, tax liability, and/or the performance of certain funds should unexpected taxes be

assessed to portfolio investments (companies) or fund income.”

If our funds are unable to obtain committed debt financing for potential acquisitions, can only obtain debt financing at

an increased interest rate or on unfavorable terms or the ability to deduct corporate interest expense is substantially limited, our

funds may face increased competition from strategic buyers of assets who may have an overall lower cost of capital or the

ability to benefit from a higher amount of cost savings following an acquisition, or may have difficulty completing otherwise

profitable acquisitions or may generate profits that are lower than would otherwise be the case, each of which could lead to a

decrease in our funds’ performance and therefore our revenues. In addition, rising interest rates, coupled with periods of

significant equity and credit market volatility, may potentially make it more difficult for us to find attractive opportunities for

our funds to exit and realize value from their existing investments.

Our funds’ portfolio companies also regularly utilize the corporate debt markets to obtain financing for their

operations. To the extent monetary policy, tax, or other regulatory changes or difficult credit markets render such financing

difficult to obtain, more expensive, or otherwise less attractive, this may also negatively impact the financial results of those

portfolio companies and, therefore, the investment returns on our funds. In addition, to the extent that market conditions and/or

tax or other regulatory changes make it difficult or impossible to refinance debt that is maturing in the near term, some of our

funds’ portfolio companies may be unable to repay such debt at maturity and may be forced to sell assets, undergo a

recapitalization, or seek bankruptcy protection.

Our funds invest in relatively high-risk, illiquid assets, and we may fail to realize any profits from these activities for a

considerable period of time or lose some or all of our principal investments.

Many of our investment funds invest in securities that are not publicly traded. In many of those cases, our investment

funds may be prohibited by contract or by applicable securities laws from selling such securities for a period of time. Our

investment funds will generally not be able to sell these securities publicly unless their sale is registered under applicable

securities laws, or unless an exemption from such registration is available. The ability of many of our investment funds,

particularly our private equity funds, to dispose of investments is heavily dependent on the public equity markets. For example,

the ability to realize any value from an investment may depend upon the ability to complete an initial public offering of the

portfolio company in which such investment is held. Even if the securities are publicly traded, large holdings of securities can

often be disposed of only over a substantial length of time, exposing the investment returns to risks of downward movement in

market prices during the intended disposition period. In addition, because the investment strategy of many of our funds,

particularly our private equity and real estate funds, often entails our having representation on our funds’ public portfolio

company boards, our funds may be restricted in their ability to effect such sales during certain periods of time. Accordingly,

under certain conditions, our investment funds may be forced to either sell securities at lower prices than they had expected to

realize or defer, potentially for a considerable period of time, sales that they had planned to make.

We have made and expect to continue to make significant principal investments in our current and future investment

funds. Contributing capital to these investment funds is risky, and we may lose some or the entire principal amount of our

Our investment funds make investments in companies that we do not control.

Investments by many of our investment funds will include debt instruments and equity securities of companies that we

do not control. Such instruments and securities may be acquired by our investment funds through trading activities or through

purchases of securities from the issuer. In addition, our funds may acquire minority equity interests in large transactions, which

may be structured as “consortium transactions” due to the size of the investment and the amount of capital required to be

invested. A consortium transaction involves an equity investment in which two or more private equity or other firms serve

together or collectively as equity sponsors. We participated in a number of consortium transactions in prior years due to the

increased size of many of the transactions in which we were involved, and may continue to do so in the future. Consortium

transactions generally entail a reduced level of control by our firm over the investment, because governance rights must be

shared with the other consortium sponsors. Accordingly, we may not be able to control decisions relating to a consortium

investment, including decisions relating to the management and operation of the company and the timing and nature of any exit.

Our funds may also dispose of a portion of their majority equity investments in portfolio companies over time in a manner that

results in the funds retaining a minority investment. Those investments may be subject to the risk that the company in which the

investment is made may make business, tax, legal, financial, or management decisions with which we do not agree or that the

majority stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve our

interests. If any of the foregoing were to occur, the value of investments by our funds could decrease and our financial

condition, results of operations, and cash flow could suffer as a result.

Our investment funds may invest in assets denominated in currencies that differ from the currency in which the fund is

denominated.

When our investment funds invest in assets denominated in currencies that differ from the functional currency of the

relevant fund, fluctuations in currency rates could impact the performance of such investment funds. For example, Carlyle

sponsors U.S. dollar-denominated funds that invest in assets denominated in foreign currencies such as our buyout and growth

funds in Asia and South America. In the event that the U.S. dollar appreciates, the market value of the investments in these

funds will decline even if the underlying investments perform well in local currency. In addition, our buyout and growth funds

in Europe are Euro-denominated and may have investments denominated in U.S. dollar, British pound, or other currencies. In

the event the Euro appreciates, the market value of investments in these funds would decline even if the underlying investments

perform well in local currency.

We may employ hedging techniques to manage these risks, but we can offer no assurance that such strategies will be

effective or tax efficient. If we engage in hedging transactions, we may be exposed to additional risks associated with such

transactions. See “Risks Related to Our Business Operations—Risks Related to the Assets We Manage—Risk management

activities may adversely affect the return on our and our funds’ investments” and “Risks Related to Regulation and Litigation—

Financial regulations and changes thereto in the United States could adversely affect our business and the possibility of

increased regulatory focus could result in additional burdens and expenses on our business.”

Our funds make investments in companies that are based outside of the United States, which may expose us to additional

risks not typically associated with investing in companies that are based in the United States.

Many of our investment funds generally invest a significant portion of their assets in the equity, debt, loans, or other

securities of issuers that are headquartered outside of the United States, such as China, India, Indonesia, and Latin America. A

substantial amount of these foreign investments consists of investments made by our carry funds. For example, as of

December 31, 2023, approximately 36% of the cumulative capital invested by our Global Private Equity and Global Credit

carry funds was attributable to foreign investments. Investments in non-U.S. securities involve risks not typically associated

with investing in U.S. securities, including:

•certain economic and political risks, including potential exchange control regulations and restrictions on our

non-U.S. investments and repatriation of profits on investments or of capital invested, the risks of political,

economic, or social instability, the possibility of expropriation or confiscatory taxation, and adverse economic

and political developments;

•the imposition of non-U.S. taxes on gains from the sale of investments or other distributions by our funds;

•the absence of uniform accounting, auditing, and financial reporting standards, practices, and disclosure

requirements and less government supervision and regulation;

•changes in laws or clarifications to existing laws that could impact our tax treaty positions, which could

adversely impact the returns on our investments;

•limitations on the deductibility of interest for income tax purposes in certain jurisdictions;

•differences in the legal and regulatory environment or enhanced legal and regulatory compliance;

•limitations on borrowings to be used to fund acquisitions or dividends;

•political hostility to investments by foreign or private equity investors, including increased risk of government

expropriation;

•less liquid markets;

•reliance on a more limited number of commodity inputs, service providers, and/or distribution mechanisms;

•adverse fluctuations in currency exchange rates and costs associated with conversion of investment principal

and income from one currency into another;

•higher rates of inflation;

•higher transaction costs;

•less government supervision of exchanges, brokers, and issuers;

•less developed bankruptcy, limited liability company, corporate, partnership, and other laws (which may have

the effect of disregarding or otherwise circumventing the limited liability structures potentially causing the

actions or liabilities of one fund or a portfolio company to adversely impact us or an unrelated fund or

portfolio company);

•difficulty in enforcing contractual obligations (including, for example, purchase agreements and insurance

policies);

•less stringent requirements relating to fiduciary duties;

•fewer investor protections and less publicly available information in respect of companies in non-U.S.

markets; and

•greater price volatility.

For example, the imposition of a new national security law has increased overall uncertainty about risks associated

with international trade with Hong Kong, the potential for increased taxation on Hong Kong-related transactions, and new

regulatory restrictions and data protection concerns for businesses operated in Hong Kong (including our Hong Kong

operations). Moreover, in April 2020, the Government of India issued Press Note 3, which requires prior government approval

of all foreign direct investment by non-resident entities located in, or having beneficial owners in, countries that share a land

border with India. The application of these rules remains fluid and may inhibit our funds’ ability to consummate investments in

India and may require partial or full exclusion of any fund investor from countries bordering India from such investments.

Uncertainty resulting from the application of these rules may also lead to higher amounts of, or longer durations of, borrowings

by the investment funds pending the receipt of approvals, and we or our funds being subject to fines if different regulators apply

and enforce the rules differently.

We operate in numerous national and subnational jurisdictions throughout the world and are subject to complex

taxation requirements that could result in the imposition of taxes in excess of any amounts that are reserved as a cash or

financial statement matter for such purposes. In addition, the portfolio companies of our investment funds are typically subject

to taxation in the jurisdictions in which they operate. It is possible that a taxing authority could take a contrary view of our tax

position or there could be changes in law subsequent to the date of an investment in a particular portfolio company that will

adversely affect returns from that investment, or adversely affect any prospective investments in a particular jurisdiction, for

example, as a result of new legislation in any such local jurisdiction affecting the deductibility of interest or other expenses

related to acquisition financing.

In the event a portfolio company outside the United States experiences financial difficulties, we may consider local

laws, corporate organizational structure, potential impacts on other portfolio companies in the region, and other factors in

developing our business response. Among other actions, we may seek to enhance the management team or fund additional

capital from our investment funds, our senior Carlyle professionals, and/or us. To the extent we and/or certain of our senior

Carlyle professionals fund additional capital into a company that is experiencing difficulties, we may be required to consolidate

the entity into our financial statements under applicable U.S. GAAP. See “Risks Related to Our Common Stock—The

consolidation of investment funds, holding companies, or operating businesses of our portfolio companies could make it more

difficult to understand the operating performance of the Company and could create operational risks for the Company.”

Our funds’ investments that are denominated in a foreign currency will be subject to the risk that the value of a

particular currency will change in relation to one or more other currencies or that there will be changes in the cost of currency

conversion and/or exchange control regulations. Among the factors that may affect currency values are trade balances, levels of

short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for

investment and capital appreciation, and political developments. In addition, the increase in the value of the dollar makes it

more difficult for companies outside of the United States that depend on non-dollar revenues to repay or refinance their dollar

liabilities and a stronger dollar also reduces the domestic value of the foreign sales and earnings of U.S.-based businesses.

Regulatory action to implement controls on foreign exchange and outbound remittances of currency could also impact

the dollar value of investments proceeds, interest, and dividends received by our investment funds, gains, and losses realized on

the sale of investments and the timing and amount of distributions, if any, made to us. For example, certain Asian countries,

including China, have implemented stricter controls on foreign exchange and outbound remittances, and several governmental

entities such as the People’s Bank of China (PBOC), the State Administration of Foreign Exchange (SAFE), the National

Development and Reform Commission (NDRC), and the Ministry of Commerce (MOFCOM) have instituted additional

reporting, review, and verification steps around control of outbound payments on capital account items. Moreover, in certain

cases, our fund management fees are denominated in foreign currencies. With respect to those funds, we are subject to risk that

the value of a particular currency will change in relation to one or more other currencies in which the fund has incurred

expenses or has made investments.

Our equity investments and many of our debt investments often rank junior to investments made by others, exposing us to

greater risk of losing our investment.

In many cases, the companies in which we or our funds invest have, or are permitted to have, outstanding indebtedness

or equity securities that rank senior to our or our fund’s investment. By their terms, such instruments may provide that their

holders are entitled to receive payments of distributions, interest, or principal on or before the dates on which payments are to

be made in respect of our or our fund’s investment. In the event of insolvency, liquidation, dissolution, reorganization, or

bankruptcy of a company in which an investment is made, holders of securities ranking senior to our investment would

typically be entitled to receive payment in full before distributions could be made in respect of our investment. In addition, debt

investments made by us or our funds in our portfolio companies may be equitably subordinated to the debt investments made by

third parties in our portfolio companies. After repaying senior security holders, the company may not have any remaining assets

to use for repaying amounts owed in respect of our investment. To the extent that any assets remain, holders of claims that rank

equally with our investment would be entitled to share on an equal and ratable basis in distributions that are made out of those

assets. Moreover, during periods of financial distress or following insolvency, the ability of us or our funds to influence a

company’s affairs and to take actions to protect an investment will likely be substantially less than that of the senior creditors.

Certain of our fund investments may be concentrated in particular asset types or geographic regions, which could

exacerbate any negative performance of those funds to the extent those concentrated investments perform poorly.

The governing agreements of our investment funds contain only limited investment restrictions and only limited

requirements as to diversification of fund investments, either by geographic region or asset type. For example, we advise funds

that invest predominantly in the United States, Europe, Asia, and Japan, and we advise funds that invest in a single industry

sector, such as financial services, aviation, and power. During periods of difficult market conditions, slowdowns, or increased

borrower defaults in those sectors or geographic regions, decreased revenue, difficulty in obtaining access to financing, and

increased funding costs experienced by our funds may be exacerbated by this concentration of investments, which could result

in lower investment returns for our funds. Such concentration may increase the risk that events affecting a specific geographic

region or asset type could have an adverse or disparate impact on such investment funds, as compared to funds that invest more

broadly. Idiosyncratic factors impacting specific companies or securities can materially affect fund performance depending on

the size of the position.

Certain of our investment funds may invest in securities of companies that are experiencing significant financial or business

difficulties, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Such

investments may be subject to a greater risk of poor performance or loss.

Certain of our investment funds, especially our distressed funds, may invest in business enterprises involved in work-

outs, liquidations, reorganizations, bankruptcies, and similar transactions, and may purchase high risk receivables. An

investment in such business enterprises entails the risk that the transaction in which such business enterprise is involved either

will be unsuccessful, will take considerable time, or will result in a distribution of cash or a new security the value of which will

be less than the purchase price to the fund of the security or other financial instrument in respect of which such distribution is

received. In addition, if an anticipated transaction does not in fact occur, the fund may be required to sell its investment at a

loss. Investments in troubled companies may also be adversely affected by U.S. federal and state laws relating to, among other

things, fraudulent conveyances, voidable preferences, lender liability, and a bankruptcy court’s discretionary power to disallow,

subordinate, or disenfranchise particular claims. Investments in securities and private claims of troubled companies made in

connection with an attempt to influence a restructuring proposal or plan of reorganization in a bankruptcy case may also involve

substantial litigation, which has the potential to adversely impact us or unrelated funds or portfolio companies. Due to the

substantial uncertainty concerning the outcome of transactions involving financially troubled companies, there is a potential risk

of loss by a fund of its entire investment in such company.

In addition, at least one federal circuit court has determined that an investment fund could be liable for ERISA Title IV

pension obligations (including withdrawal liability incurred with respect to union multiemployer plans) of its portfolio

companies, if such fund is a “trade or business” and the fund’s ownership interest in the portfolio company is significant

enough to bring the investment fund within the portfolio company’s “controlled group.” While a number of cases have held that

managing investments is not a “trade or business” for tax purposes, the circuit court in this case concluded the investment fund

could be a “trade or business” for ERISA purposes based on certain factors, including the fund’s level of involvement in the

management of its portfolio companies and the nature of its management fee arrangements. Litigation related to the circuit

court’s decision suggests that additional factors may be relevant for purposes of determining whether an investment fund could

face “controlled group” liability under ERISA, including the structure of the investment and the nature of the fund’s

relationship with other affiliated investors and co-investors in the portfolio company. Moreover, regardless of whether an

investment fund is determined to be a “trade or business” for purposes of ERISA, a court might hold that one of the fund’s

portfolio companies could become jointly and severally liable for another portfolio company’s unfunded pension liabilities

pursuant to the ERISA “controlled group” rules, depending upon the relevant investment structures and ownership interests as

noted above.

Contingent liabilities could harm fund performance.

We may cause our funds to acquire an investment that is subject to contingent liabilities. Such contingent liabilities

could be unknown to us at the time of acquisition or, if they are known to us, we may not accurately assess or protect against

the risks that they present. Acquired contingent liabilities could therefore result in unforeseen losses for our funds. In addition,

in connection with the disposition of an investment in a portfolio company, a fund may be required to make representations

about the business and financial affairs of such portfolio company typical of those made in connection with the sale of a

business. A fund may also be required to indemnify the purchasers of such investment to the extent that any such

representations are inaccurate. These arrangements may result in the incurrence of contingent liabilities by a fund, even after the

disposition of an investment. Accordingly, the inaccuracy of representations and warranties made by a fund could harm such

fund’s performance.

We and our investment funds are subject to risks in using prime brokers, custodians, administrators, and other agents and

third-party service providers.

We and many of our investment funds depend on the services of prime brokers, custodians, administrators, and other

agents and third-party service providers to carry out certain securities transactions and other business functions.

The counterparty to one or more of our or our funds’ contractual arrangements could default on its obligations under

the contract. If a counterparty defaults, we and our funds may be unable to take action to cover the exposure and we or one or

more of our funds could incur material losses. Among other systems, our data security, data privacy, investor reporting, and

business continuity processes could be impacted by a third party’s inability or unwillingness to perform pursuant to our

arrangements with them. In addition, we could suffer legal and reputational damage from such failure to perform if we are

unable to satisfy our obligations under our contracts with third parties or otherwise and could suffer losses in the event we are

unable to comply with certain other agreements. Moreover, under certain local clearing and settlement regimes, we or our funds

could be subject to settlement discipline fines.

The terms of our contracts with third parties surrounding securities transactions are often customized and complex, and

many of these arrangements occur in markets or relate to products that are not subject to regulatory oversight. In particular,

some of our funds utilize prime brokerage arrangements with a relatively limited number of counterparties, which has the effect

of concentrating the transaction volume (and related counterparty default risk) of these funds with these counterparties.

The consolidation and elimination of counterparties may increase our concentration of counterparty risk and decrease

the number of potential counterparties. Our carry funds generally are not restricted from dealing with any particular

counterparty or from concentrating any or all of their transactions with one counterparty. In the event of the insolvency of a

party that is holding our assets or those of our funds as collateral, we and our funds may not be able to recover equivalent assets

in full as we and our funds will rank among the counterparty’s unsecured creditors. In addition, our and our funds’ cash held

with a prime broker, custodian, or counterparty may not be segregated from the prime broker’s, custodian’s, or counterparty’s

own cash, and we and our funds therefore may rank as unsecured creditors in relation thereto. The inability to recover our or

our investment funds’ assets could have a material impact on us or on the performance of our funds.

In addition, certain of our funds’ operations and investments interface with and/or depend on third-party service

providers, including but not limited to a fund’s administrator and joint-venture partners, operating partners, and third-party

property managers that may be engaged in respect of a fund’s investments. The costs, fees, and expenses associated with the

provision of such services by third-party service providers will generally be borne by the fund, thereby increasing the expenses

borne by the fund and Carlyle may not be in a position to verify the risks or reliability of such third parties.

A fund, Carlyle, or an investment may suffer adverse consequences from actions, errors, or failure to act by third-party

service providers, and will have obligations, including indemnity obligations, and limited recourse against them. For example,

joint-venture partners, operating partners, and third-party property managers are subject to various applicable laws and

regulations with respect to their activities, including antitrust and competition rules (including with respect to price fixing or

other anticompetitive activity) that apply in the U.S. and any other countries or regions where they do business, and failure to

comply with those rules could result in sanctions, fines, or penalties, including civil damage actions, or delays in consummating

investments. There can be no assurances that a fund, Carlyle, or the investments will not experience directly or indirectly such

negative impacts or otherwise be subject to or implicated by litigation or investigations involving any possible violation of such

laws by such service providers.

Moreover, our funds and entities through which we make our investments are generally obligated to indemnify certain

counterparties under various agreements entered into with such persons against any liability that they or their respective

affiliates may incur in connection with their relationship with such funds and/or investments. For example, certain of such

entities are expected to enter into agreements with joint-venture partners, operating partners, and third-party property managers

under which such parties will be entitled to indemnification under certain circumstances, including with respect to sanctions,

fines, or penalties, including civil damage actions, imposed in connection with their activities related to our funds and their

Our investments are subject to a number of inherent risks.

Our results are highly dependent on our continued ability to generate attractive returns from our investments.

Investments made by our business segments involve a number of significant risks, including the following:

•we advise funds that invest in businesses that operate in a variety of industries that are subject to extensive

domestic and foreign regulation, such as the telecommunications industry, the aerospace, defense and

government services industry, the life sciences industry, and the healthcare industry (including companies that

supply equipment and services to governmental agencies), that may involve greater risk due to rapidly

changing market and governmental conditions in those sectors;

•significant failures of our investments to comply with laws and regulations applicable to them may expose us

to liabilities, fines, or penalties, could affect the ability of our funds to invest in other companies in certain

industries in the future, and could harm our reputation;

•companies in which investments are made may have limited financial resources and may be unable to meet

their obligations, which may be accompanied by a deterioration in the value of their equity securities or any

collateral or guarantees provided with respect to their debt;

•companies or assets in which investments are made are more likely to depend on the management talents and

efforts of a small group of persons and, as a result, the death, disability, resignation, or termination of one or

more of those persons could have a material adverse impact on their business and prospects and the

investment made;

•companies in which investments are made may be businesses or divisions acquired from larger operating

entities that may require a rebuilding or replacement of financial reporting, information technology, back

office, and other operations;

•companies or assets in which investments are made may from time to time be parties to litigation, may be

engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may

require substantial additional capital to support their operations, finance expansion, or maintain their

competitive position;

•instances of fraud, corruption, and other deceptive practices committed by senior management of portfolio

companies in which our funds invest may undermine our due diligence efforts with respect to such companies

and, upon the discovery of such fraud, negatively affect the valuation of a fund’s investments as well as

contribute to overall market volatility that can negatively impact a fund’s investment program;

•our funds may make investments that they do not advantageously dispose of prior to the date the applicable

fund is dissolved, either by expiration of such fund’s term or otherwise, resulting in a lower than expected

return on the investments and, potentially, on the fund itself;

•our funds generally establish the capital structure of portfolio companies on the basis of the financial

projections based primarily on management judgments and assumptions, and general economic conditions

and other factors may cause actual performance to fall short of these financial projections, which could cause

a substantial decrease in the value of our equity holdings in the portfolio company and cause our funds’

performance to fall short of our expectations;

•our transactions involve complex tax structuring that could be challenged or disregarded, which may result in

losing treaty benefits or would otherwise adversely impact our investments; and

•executive officers, directors, and employees of an equity sponsor may be named as defendants in litigation

involving a company or asset in which an investment is made or is being made.

Our private equity funds’ performance, and our performance, has been and may in the future be adversely affected by the

financial performance of our portfolio companies and the industries in which our funds invest.

Our performance and the performance of our private equity funds are significantly impacted by the value of the

companies in which our funds have invested. Our funds invest in companies in many different industries, each of which is

subject to volatility based upon a variety of factors, including economic, market, and geopolitical factors. During recessions,

periods of elevated uncertainty, or phases of challenging economic and market conditions such as today’s environment of high

inflation, rapidly increasing interest rates, and global food and energy shortages, we experience significant fluctuations in the

fair value of securities held by our funds. Obstacles to growth in the near-term are numerous, such as geopoliticaland domestic

political uncertainty, the risk of persistently high inflation, sharp shifts in monetary and fiscal policy, depressed labor force

participation, high levels of public debt, slowing population growth, supply chain pressures, and economic stress outside the

United States. These factors and other general economic trends can impact the performance of portfolio companies in many

industries and geographies. In addition, the value of our investments in portfolio companies in the financial services industry is

impacted by the overall health and stability of the credit and equity markets. The U.S. dollar remained strong in 2023, although

it has retrenched from its peak. A very strong U.S. dollar depresses the profits of domestic companies with significant foreign

revenues, increases default risk on U.S. dollar-denominated loans and bonds issued by businesses domiciled in emerging

market economies (“EMEs”), and exacerbates food and energy crises in EMEs as most commodities are invoiced in dollars. A

sustained period of elevated U.S. dollar value relative to global currencies would perpetuate and worsen these trends. An

increase in emerging market corporate or sovereign defaults could further impair funding conditions or depress asset prices in

these economies.

The performance of our private equity funds, and our performance, may be adversely affected to the extent our fund

portfolio companies experience adverse performance or additional pressure due to exogenous factors, such as the Russian

invasion of Ukraine and another pandemic or global health crisis like the COVID-19 pandemic. For example, during 2022, we

recorded an impairment charge of $4.0 million on certain acquired contractual rights related to Carlyle Aviation Partners as a

result of impaired income streams from aircraft under lease in Russia. In addition, the performance of our investment funds and

our portfolio companies may be adversely affected by increases in inflationary pressures such as employee wage growth or

rising input costs, which could compress profit margins, particularly at our portfolio companies that are unable to effectively

increase prices in response. With respect to real estate, various factors could have an adverse effect on investment performance,

including, but not limited to, deflation in consumer prices, a low level of consumer confidence in the economy, and/or the

residential real estate market and rising mortgage interest rates. In response to financial difficulties that are currently being

experienced or that may be experienced in the future by certain portfolio companies or real estate investments, we may consider

legal, regulatory, tax, or other factors in determining the steps we may take to support such companies or investments, which

may include enhancing the management team or funding additional capital investments from our investment funds, our senior

Carlyle professionals, and/or us. The actions we may take to support companies or investments experiencing financial

difficulties may not be successful in remedying the financial difficulties and our investment funds, our senior Carlyle

professionals or we may not recoup some or all of any capital investments made in support of such companies or investments.

Our CLO business and investment into CLOs involves certain risks.

CLOs may present risks similar to other types of debt obligations and, in fact, such risks may be of greater significance

in the case of CLOs. In this respect, CLOs invest on a leverage basis in loans or securities that are themselves highly leveraged

investments in the underlying collateral, which increases both the opportunity for higher returns as well as the magnitude of

losses compared to unlevered investments. As a result of such funds’ leverage position, CLOs and their investors are at risk of

suffering losses. For example, investments in structured vehicles, including equity and junior debt securities issued by CLOs,

involve risks such as liquidity risk, credit risk, and market risk. Changes in interest rates and credit quality may cause short-

term price fluctuations, increase in credit spreads, decline in ratings, or longer-term impairment. In addition, a reduction in the

liquidity of the credit markets may result in an increase in credit spreads and a decline in ratings, performance, and market

values for leveraged loans. We have significant exposure to these markets through our investment in our CLO funds.

In addition to the general risks associated with investing in debt and equity securities, CLO securities carry additional

risks, including, but not limited to, the possibility that distributions from collateral assets will be inadequate to make interest or

other payments to us and the quality of the collateral may decline in value, default, or be downgraded. Moreover, changes in the

collateral held by a CLO may cause payments on the instruments we hold to be reduced, either temporarily or permanently.

Non-payment could result in a reduction of our income and revenues. CLO securities may be less liquid than other types of

securities and are often more volatile than the individual assets that make-up the CLOs. In addition, CLOs and other structured

finance securities may be subject to prepayment risk. Further, the performance of a CLO or other structured finance security is

generally affected by a variety of factors, including the security’s priority in the capital structure of the issuer thereof, the

availability of any credit enhancement, the level and timing of payments and recoveries on and the characteristics of the

underlying receivables, loans, or other assets that are being securitized, remoteness of those assets from the originator or

transferor, the adequacy of and ability to realize upon any related collateral, and the capability of the servicer of the securitized

assets. There are also risks that the trustee of a CLO does not properly carry out its duties to the CLO, potentially resulting in

loss to the CLO. Moreover, the complex structure of the security may produce unexpected investment results, especially during

times of market stress or volatility. Investments in structured finance securities may also be subject to liquidity risk.

During 2023, we earned approximately$214.1 million in management fees from our CLOs, prior to the effects of

consolidation, of which approximately 63% are in the form of subordinated fees. The subordinated fees we generate from our

CLO business could be negatively impacted if one or more CLOs fail certain tests related to overcollateralization (including the

interest diversion test) set forth in their respective indentures. In the event that worsening credit conditions and/or a

deterioration in loan performance generally leads to defaults or downgrades of the CLOs’ underlying collateral obligations, one

or more CLOs could fail one or more overcollateralization tests and/or interest diversion tests. These risks are correlated, as

when an underlying collateral obligation defaults or is downgraded below a certain threshold, such collateral obligation is then

carried below par for the purpose of overcollateralization and interest diversion testing, making a failure of any such test more

likely to occur. Any such failure would result in funds otherwise available to pay the management fees we earn on such

investment vehicle to instead be used to either (x) pay down the principal on the securities issued by such vehicle in an amount

necessary to cause such tests to pass or (y) purchase sufficient collateral in an amount necessary to cause such CLO to pass such

tests. If either of these scenarios occurred, there is the potential that the remaining funds would be insufficient to pay expected

management fees on any such CLO, which would result in either a temporary deferral or permanent loss of such management

fees.

Underwriting, syndicating, and securities placement activities expose us to risks.

TCG Capital Markets may act as an underwriter, syndicator, or placement agent for security offerings and TCG

Senior Funding L.L.C. may act as an underwriter, originator, syndicator, or placement agent in loan originations. If we are

unable to sell securities or place loans at the anticipated price levels where we act as an underwriter, syndicator, or placement

agent, we may incur losses and suffer reputational harm.

As an underwriter, syndicator, or placement agent, we also may be subject to potential liability for material

misstatements or omissions in prospectuses and other offering documents relating to offerings we underwrite, syndicate, or

place. In certain situations, we may have liabilities arising from transactions in which our investment fund may participate as a

purchase or a seller of securities, which could constitute a conflict of interest or subject us to damages or reputational harm.

Our Global Investment Solutions business is subject to additional risks.

Our Global Investment Solutions business is subject to additional risks, including the following:

•The Global Investment Solutions business is subject to business and other risks and uncertainties generally

consistent with our business as a whole, including without limitation legal, tax and regulatory risks, the

avoidance or management of conflicts of interest and the ability to attract and retain investment professionals

and other personnel, and risks associated with the acquisition of new investment platforms.

•Pursuant to our current arrangements with the various businesses, we restrict our participation in the

investment activities undertaken by our Global Investment Solutions segment (including with respect to

AlpInvest), which may in turn limit our ability to address risks arising from their investment activities. For

example, although we maintain ultimate control over AlpInvest, its management team (who are our

employees) continue to exercise independent investment authority without involvement by other Carlyle

personnel. For so long as these arrangements are in place, we will observe substantial restrictions on our

ability to access investment information or engage in day-to-day participation in the AlpInvest investment

businesses, including a restriction that AlpInvest investment decisions are made and maintained without

involvement by other Carlyle personnel and that no specific investment data, other than data on the

investment performance of its investment funds and managed accounts, will be shared. Generally, we have a

reduced ability to identify or respond to investment and other operational issues that may arise within the

Global Investment Solutions business, relative to other Carlyle investment funds.

•Similar to other parts of our business, Global Investment Solutions is seeking to broaden its investor base by

raising funds and advising separate accounts for investors on an account-by-account basis and the number and

complexity of such investor mandates and fund structures has increased as a result of continuing fundraising

efforts, and the activation of mandates with existing investors.

•Conflicts may arise between such Global Investment Solutions funds or separate managed accounts (e.g.,

competition for investment opportunities), and in some cases conflicts may arise between a Global Investment

Solutions fund or managed account and a Carlyle fund. In addition, certain managed accounts may have

different or heightened standards of care, and if they invest in other investment funds sponsored by us could

result in lower management fees and carried interest to us than Carlyle’s typical investment funds.

•Our Global Investment Solutions business is separated from the rest of the firm by an informational wall

designed to prevent certain types of information from flowing from the Global Investment Solutions platform

to the rest of the firm. This information barrier limits the collaboration between our investment professionals

with respect to specific investments.

Industry Risks Related to the Assets We Manage

Our real estate funds are subject to risks inherent in the ownership and operation of real estate and the construction and

development of real estate.

Investments in our real estate funds are subject to the risks inherent in the ownership and operation of real estate and

real estate-related businesses and assets. These risks include the following:

•those associated with the burdens of ownership of real property;

•general and local economic conditions;

•changes in supply of and demand for competing properties in an area (as a result, for instance, of

overbuilding);

•changes in interest rates and related increases in borrowing costs;

•fluctuations in the average occupancy and room rates for hotel and student housing properties;

•changes in demand for commercial office properties (including as a result of an increased prevalence of

remote work);

•population and demographic shifts;

•the financial resources of tenants;

•defaults by borrowers or tenants;

•changes in building, environmental, zoning, and other laws;

•restrictive covenants, encumbrances, and other land or use restrictions;

•failure to obtain necessary approvals and/or permits;

•energy and supply shortages;

•casualty or condemnation losses;

•various uninsured or uninsurable risks;

•natural disasters, including increased physical risks from climate change such as event-driven exposures

resulting from the increased severity of extreme weather events, such as cyclones, hurricanes or floods, and

consequences of longer-term shifts in climate patterns, for example, sustained higher temperatures that may

cause sea levels to rise or chronic heat waves, and the effects of climate change on supply and demand;

•changes in government regulations (such as rent control and those intended to address climate change);

•changes in the way real estate is occupied as a result of pandemics or other unforeseen events;

•changes in real property tax rates and operating expenses;

•the reduced availability of mortgage funds or other forms of financings, including construction financing,

which may render the sale or refinancing of properties difficult or impracticable;

•inability to meet debt obligations;

•breaches by third parties of their contractual obligations, including ground lessors, ground lessees, landlords,

and tenants;

•claims by third parties, including adjacent landowners, and homeowners associations;

•negative developments in the economy that depress travel and leasing activity or rents;

•environmental liabilities;

•contingent liabilities on disposition of assets;

•increase in insurance premiums and changes to the insurance market;

•unexpected cost overruns and delays in connection with development projects;

•terrorist attacks, war, and other factors that are beyond our control; and

•dependence on local operating partners.

Our real estate funds’ portfolio investments are subject to various risks that cause fluctuations in occupancy, rental

rates, operating income, and expenses or that render the sale or financing of the funds’ portfolio investment properties difficult

or unattractive, which risks were exacerbated by the COVID-19 pandemic and may be further exacerbated by another pandemic

or global health crisis. For example, following the termination or expiration of a tenant’s lease, there could be a period of time

before a funds’ portfolio investment will begin receiving rental payments under a replacement lease. During that period, the

portfolio investments (and indirectly, the funds) will continue to bear fixed expenses such as interest, real estate taxes,

maintenance, and other operating expenses. In addition, declining economic conditions could impair the portfolio investments’

ability to attract replacement tenants and achieve rental rates equal to or greater than the rents paid under previous leases.

Increased competition for tenants would require the portfolio investments to make capital improvements to properties that we

would not otherwise have planned. Any unbudgeted capital improvements that a fund undertakes may divert cash that would

otherwise be available for distribution to investors. To the extent that the portfolio investments are unable to renew leases or re-

let spaces as leases expire, decreased cash flow from tenants will result, which would adversely impact the relevant fund’s

returns. Our real estate funds may also make investments in residential real estate projects and/or otherwise participate in

financing opportunities relating to residential real estate assets or portfolios thereof from time to time, which may be more

highly susceptible to adverse changes in prevailing economic and/or market conditions and present additional risks relative to

the ownership and operation of commercial real estate assets.

With regard to potential environmental liabilities, ownership of real assets in our investment funds or vehicles may

increase our risk of liability under laws that impose, regardless of fault, joint and several liability for the cost of remediating

contamination and compensation for damages. In addition, changes in environmental laws or regulations or the environmental

condition of an investment may create liabilities that did not exist at the time of acquisition. For example, the current

administration has announced several initiatives and proposed new regulations focused on the climate crisis that could impact

our real estate assets in various ways that were not considered at the time of investment. Even in cases where we are

indemnified by a seller against liabilities arising out of violations of environmental laws and regulations, there can be no

assurance as to the financial viability of the seller to satisfy such indemnities or our ability to achieve enforcement of such

indemnities.

In addition to real property assets, our real estate funds may also invest in real estate related operating companies such

as logistics hubs and data centers. These investments are similar to the portfolio investments made by our buyout and growth

funds and are subject to similar risks and uncertainties as apply to those operating companies. See “Risks Related to Our

Business Operations—Risks Related to the Assets We Manage—The investments of our private equity funds are subject to a

number of inherent risks.”

Real estate markets may experience sharp increases in capitalization rates and declines in value as a result of overall

economic decline and the limited availability of financing and the value of certain investments in our real estate funds may

decline significantly. In addition, if our real estate funds acquire direct or indirect interests in undeveloped land or

underdeveloped real property, which may often be non-income producing, they will be subject to the risks normally associated

with such assets and development activities, including risks relating to the availability and timely receipt of zoning and other

regulatory or environmental approvals, the cost and timely completion of construction (including risks beyond the control of

our fund, such as weather or labor conditions or material shortages), and the availability of both construction and permanent

financing on favorable terms. Moreover, our real estate funds’ properties are often managed by a third party, which makes us

dependent upon such third parties and subjects us to risks associated with the actions of such third parties. Any of these factors

may cause the value of the investments in our real estate funds to decline, which may have a material impact on our results of

In addition, lenders in commercial real estate financing have been requiring a non-recourse carveout guarantee and

environmental indemnity, which typically provides that the lender can recover losses from guarantors for certain bad acts, such

as fraud or intentional misrepresentation, intentional waste, willful misconduct, criminal acts, misappropriation of funds,

voluntary incurrence of prohibited debt, and environmental losses sustained by the lender. For our acquisitions, non-recourse

carveout guarantees and environmental indemnities may be extended by our funds. We expect that commercial real estate

financing arrangements generally will increasingly continue to require non-recourse carveout guarantees and environmental

indemnities. In addition, lenders may require interest, carry, and/or payment guarantees in connection with a real estate

financing arrangement, which may be provided by the fund. In the event that any such guarantee or indemnity is called, a fund’s

or our assets could be negatively impacted and we or our funds may be subject to liability.

The acquisition, ownership, and disposition of real properties carry certain specific litigation risks. Litigation may be

commenced with respect to a property acquired in relation to events or circumstances relating to periods prior to the acquisition

of such property. In addition, at the time of disposition, other potential buyers may bring claims related to the asset or for due

diligence expenses or other damages. After the sale of a real estate asset, buyers may later sue our funds or us for losses

associated with latent defects or other problems not uncovered in due diligence. Litigation can arise for events or circumstances

that occur or are alleged to occur during the ownership period.

We or our funds may also be subject to certain risks associated with investments and, in particular, real estate-related

assets. Real estate investment trusts (“REITs”) and other types of owners may be affected by changes in the value of their

underlying properties and defaults by borrowers or tenants and, in the case of REITS, changes in tax laws or by a failure to

qualify for tax-free pass through income could impair a REIT’s ability to generate cash flows to make distributions.

Qualification as a REIT also depends on a REIT’s ability to meet various requirements imposed by the U.S. Internal Revenue

Code of 1986, as amended (the “Code”), which relate to organizational structure, annual distributions, diversity of stock

ownership, and certain restrictions with regard to the nature of their assets and the sources of their income. If a REIT fails to

qualify as a REIT in any taxable year, it will be subject to U.S. federal income tax at regular corporate rates, and applicable

state and local taxes, which would reduce the amount of cash available for distribution to its stockholders.

Investments in real estate debt investments may be unsecured and/or subordinated to a substantial amount of

indebtedness and may not be protected by financial covenants. Non-performing real estate loans may require a substantial

amount of workout negotiations and/or modification, which may entail, among other things, a substantial reduction in the

interest rate and a substantial write-down of the principal of such loan. Investments in commercial mortgage loans are subject to

risks of delinquency, foreclosure, and loss of principal. In the event of any default under a mortgage loan held directly by us or

one of our funds, we or our fund will bear a risk of loss of principal to the extent of any deficiency between the value of the

collateral and the principal and accrued interest of the loan. Investments in distressed assets or businesses may have little or no

near-term cash flow, involve a high degree of risk and, if subject to bankruptcy or insolvency, could be subordinated or

disallowed.

Our energy business is involved in oil and gas investments (i.e, exploration, production, storage, transportation, logistics,

refining, marketing, trading, petrochemicals, energy services, and other opportunistic investments), which entail a high

degree of risk.

Our energy teams focus on investments in businesses involved in oil and gas production, development, and

exploration, which can be a speculative business involving a high degree of risk, including:

•the use of new technologies;

•reliance on estimates of oil and gas reserves in the evaluation of available geological, geophysical,

engineering, and economic data for each reservoir;

•encountering unexpected formations or pressures, premature declines of reservoirs, blow-outs, equipment

failures and other accidents in completing wells and otherwise, cratering, sour gas releases, uncontrollable

flows of oil, natural gas or well fluids, adverse weather conditions, pollution, fires, spills, and other

environmental risks;

•the volatility of oil and natural gas prices and its impact on the demand for oil and gas products and services

(climate change related or otherwise); and

•potential contributions to anthropogenic climate change, as well as regulations and stakeholder scrutiny

related to the same.

In order to better manage these risks, we seek to help a subset of portfolio companies accelerate progress related to

climate change and the energy transition. For example, we help select companies to measure, monitor, and manage their carbon

emissions, set decarbonization goals and associated pathways, and consider investments in new technologies to build additional

long-term value in these companies, and position them to find opportunities in response to changing market dynamics;

however, there is no guarantee that such efforts will be successful.

Oil, gas, and product prices are subject to international supply and demand dynamics and, as a consequence, related

margins can be volatile. In general, political developments, global conflicts such as Russia’s invasion of Ukraine and the war

between Israel and Hamas-led Palestinian militant groups, see-sawing supply-demand dynamics, technological change, global

macroeconomic conditions, public health risks, and changes in the influence of the Organization of Petroleum Exporting

Countries (“OPEC”) may continue to impact commodity prices going forward and the financial performance of some of our

existing and future investments. Our investments that are exposed to energy prices, either as consumers or producers of energy,

and their financial performance has been, and is likely to continue to be, affected by the continued volatility in energy prices.

To the extent that current conditions persist or worsen, there may be adverse impacts on the financial performance of the

affected businesses, on the availability of financing or credit to them as well as their asset prices and valuations.

Oil prices tend to experience significant volatility in response to macroeconomic trends, trade developments,

geopolitical events, and data on inventories, global demand, future supply, and U.S. dollar strength. Prices for oil and natural

gas are subject to wide fluctuation in response to relatively minor changes in the supply of and demand for oil and natural gas,

as well as numerous additional factors such as market uncertainty, speculation, the level of consumer product demand, the

refining capacity of oil purchasers, weather conditions, domestic and non-U.S. governmental regulations (including with respect

to trade and economic sanctions), appreciation or depreciation of the U.S. dollar, the price and availability of alternative fuels,

political conditions in the Middle East, Africa, and Eastern Europe, actions of the OPEC, the non-U.S. supply of oil and natural

gas, U.S. and global inventories, the price of non-U.S. imports, and overall economic conditions. In addition, changes in

commodity prices can vary widely from one location to the next depending upon the characteristics of the production and the

availability of gathering, transportation, processing, and storage facilities used to transport the oil and gas to markets. In the

event that oil prices decline sharply in the future, or fail to sustain upward price momentum, it is possible our portfolio could be

adversely impacted. In the event that global commodity market dislocations persist and energy prices stay elevated or increase

sharply in the future, it is possible that our portfolio could be adversely impacted by potential changes in the fiscal regimes that

the host countries of our investments apply to energy producers.

In resp onse to Russia’s invasion of Ukraine and the war between Israel and Hamas-led Palestinian militant groups, and

the developing legal and geopolitical response, we are monitoring exposure to these and related countries across our global

portfolio from an economic, legal, and human capital perspective. We are working closely with external sanctions counsel to

stay abreast of rapidly evolving sanctions and geopolitical risks and to help support compliance across our portfolio. Given the

nature of the industry in which our energy teams invest, there are necessarily connections to Russian-owned oil and gas

companies. These connections, and other dealings with Russian-owned oil and gas companies, are under close scrutiny in light

of geopolitical considerations. Given this, there is a risk that national and international sanctions related to the war in Ukraine,

and associated compliance and regulatory issues, could have a material impact on our business. To date, however, we have not

identified any matters that trigger adverse regulatory concerns as a result of such sanctions.

The current administration has issued several executive orders, including “Ensuring the Future Is Made in All of

America by All of America’s Workers” and “Federal Research and Development in Support of Domestic Manufacturing and

United States Jobs,” which have the potential to impact federal contractors and certain grant and loan recipients and their

contractors. In this respect, a “Made in America” Office was ordered to be created within the Office of Management and

Budget to review federal agency waiver requests relating to the nonavailability of domestically sourced products. The longer-

term impact of potential changes to the Federal Acquisition Regulation and statutory exemptions for commercial item

information technology and trade agreements and the change in waiver procedures requirements for certain grant and loan

programs could impact certain investments. See “Risks Related to Our Business Operations—Risks Related to the Assets We

Manage—Investments in the natural resources industry, including the infrastructure and power industries, involve various

operational, construction, and regulatory risks.”

Investments in the natural resources industry, including the infrastructure and power industries, involve various

operational, construction, and regulatory risks.

Investment in infrastructure assets involves certain differentiated risks. Project revenues can be affected by a number

of factors. Unanticipated changes in the availability or price of inputs necessary for the operation of infrastructure assets may

adversely affect the overall profitability of the investment or related project. Events outside the control of a portfolio company,

such as political action, governmental regulation (including potential climate change initiatives), demographic changes,

economic growth, increasing fuel prices, government macroeconomic policies, service or product prices, social stability,

competition from other businesses and infrastructure, natural disasters (climate change related or otherwise), changes in weather

patterns, changes in demand for products or services, bankruptcy or financial difficulty of a major customer, and acts of war or

terrorism, could significantly reduce the revenues generated or significantly increase the expense of constructing, operating,

maintaining, or restoring infrastructure facilities. In turn, this may impair a portfolio company’s ability to repay its debt, make

distributions, or even result in termination of an applicable concession or other agreement. Although portfolio companies may

maintain insurance to protect against certain risks, where available on reasonable commercial terms (such as business

interruption insurance that is intended to offset loss of revenues during an operational interruption), such insurance is subject to

customary deductibles and coverage limits and may not be sufficient to recoup all of an investment’s losses. Moreover, once

infrastructure assets of investments become operational, they may face competition from other infrastructure assets in the

vicinity of the assets they operate, the presence of which depends in part on governmental plans and policies, over which we

have no control.

Infrastructure investments are subject to substantial government regulation and governments have considerable

discretion to implement regulations that could affect the business of infrastructure investing. In many instances, the operation or

acquisition of infrastructure assets involves an ongoing commitment to or from a governmental agency, and the operation of

infrastructure assets often relies on government permits, licenses, concessions, leases, or contracts. The nature of these

obligations and dependencies exposes the owners of infrastructure assets to a higher level of regulatory control than typically

imposed on other businesses, resulting in government entities having significant influence over such owners.

Where a portfolio company holds a concession or lease from the government, the concession or lease may restrict the

portfolio company’s ability to operate the business in a way that maximizes cash flows and profitability. The lease or

concession may also contain clauses more favorable to the government counterparty than a typical commercial contract. For

instance, the lease or concession may enable the government to terminate the lease or concession in certain circumstances

without requiring payment of adequate compensation.

The development, operation, and maintenance of power generation or infrastructure facilities involves various

operational risks, which can include mechanical and structural failure, accidents, labor issues, or the failure of technology to

perform as anticipated. Events outside our control, such as economic developments, changes in fuel prices or the price of other

feedstocks, governmental policies, demand for energy, and similar events, could materially reduce the revenues generated or

increase the expenses of constructing, operating, maintaining, or restoring power generation businesses. Such developments

could impair a portfolio company’s ability to repay its debt or conduct its operations. We may also choose to or be required to

decommission a power generation facility or other asset. The decommissioning process could be protracted and result in the

incurrence of significant financial and/or regulatory obligations or other uncertainties.

Our natural resource portfolio companies may also face construction and operational risks typical for energy,

infrastructure, and power generation infrastructure businesses, including, without limitation:

•labor disputes, work stoppages, or shortages of skilled labor;

•shortages of fuels or materials;

•slower than projected construction progress and the unavailability or late delivery of necessary equipment;

•delays caused by or in obtaining the necessary regulatory approvals or permits;

•adverse weather conditions and unexpected construction conditions;

•accidents or the breakdown or failure of equipment or processes;

•difficulties in obtaining suitable or sufficient financing; and

•force majeure or catastrophic events such as explosions, fires, and terrorist activities and other similar events

beyond our control.

Such developments could result in substantial unanticipated delays or expenses and, under certain circumstances,

could prevent completion of construction activities once undertaken. Construction costs may exceed estimates for various

reasons, including inaccurate engineering and planning, labor and building material costs in excess of expectations, and

unanticipated problems with project start-up. Such unexpected increases may result in increased debt service costs and funds

being insufficient to complete construction. Portfolio investments under development or portfolio investments acquired to be

developed may receive little or no cash flow from the date of acquisition through the date of completion of development and

may experience operating deficits after the date of completion. In addition, market conditions may change during the course of

development that make such development less attractive than at the time it was commenced. Any events of this nature could

severely delay or prevent the completion of, or significantly increase the cost of, the construction. In addition, there are risks

inherent in the construction work that may give rise to claims or demands against one of our portfolio companies from time to

time. Delays in the completion of any energy or power project may result in lost revenues or increased expenses, including

higher operation and maintenance costs related to such portfolio company.

We may acquire equity interests in development projects, including, without limitation, transmission and power

facility developments and/or in businesses that engage in transmission and power facility development. To the extent that we

invest in such development activities, it will be subject to the risks normally associated with such activities. Such risks include,

without limitation, risks relating to the availability and timely receipt of zoning and other regulatory approvals, the cost and

timely completion of construction (including risks beyond our control, such as weather or labor conditions or material

shortages) and the availability of both construction and permanent financing on favorable terms. These risks could result in

substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of development

activities once undertaken, any of which could have an adverse effect on the financial condition and results of operations.

Investments in electric utility industries both in the United States and abroad continue to experience increasing

competitive pressures, primarily in wholesale markets, as a result of consumer demands, technological advances, greater

availability of natural gas, and other factors. Changes in regulation may support not only consolidation among domestic

utilities, but also the disaggregation of vertically integrated utilities into separate generation, transmission, and distribution

businesses. As a result, additional significant competitors could become active in the independent power industry.

We invest in companies that produce hydrocarbons, the combustion of which releases greenhouse gases linked to

climate change. Governmental and regulatory bodies, investors, consumers, and other stakeholders are increasingly focused on

combating climate change and a number of jurisdictions have adopted, or are considering the adoption of, regulatory

frameworks to reduce greenhouse gas emissions. These include adoption of cap and trade regimes, carbon taxes, restrictive

permitting, increased efficiency standards, climate-related reporting, and incentives or mandates for renewable energy, among

others. Compliance with these regulatory requirements could be costly, lengthen project implementation times, and, together

with changes in consumer preferences and technological advances in the alternative energy sector, reduce demand for

hydrocarbons, as well as shift hydrocarbon demand toward relatively lower-carbon sources such as natural gas. Current and

pending greenhouse gas regulations or policies may also increase compliance costs for us and/or our portfolio companies, such

as for monitoring or sequestering emissions, and promote alternatives to hydrocarbons. Companies that produce hydrocarbons

are also increasingly subject to the risk of activism, litigation, and regulatory enforcement related to such companies’

operations, or actual or alleged environmental impacts, as well as increased scrutiny from lenders with regards to sustainability

considerations. Such requirements, as well as social, economic, and technological developments, could have a negative impact

on our ability to obtain suitable or sufficient financing, exit certain of our energy investments, or adversely affect the expected

returns of new investment opportunities.

The energy, infrastructure, power, and natural resource sectors are subject to comprehensive U.S. and non-U.S.

federal, state, and local laws and regulations. These regulators include the Federal Energy Regulatory Commission, which has

jurisdiction over the transmission and wholesale sale of electricity in interstate commerce and over the transportation, storage,

and certain sales of natural gas in interstate commerce, including the rates, charges, and other terms and conditions for such

services, respectively, and the North American Electric Reliability Corporation, the purpose of which is to establish and enforce

reliability standards applicable to all users, owners, and operators of the bulk power system. These regulators derive their

authority from, among other laws, the Federal Power Act, as amended, The Energy Policy Act of 2005, the Natural Gas Act, as

amended, and state and local public utility laws. At the state level, some state laws require approval from the state commission

before an electric utility operating in the state may divest or transfer electric generation facilities. Most state laws require

approval from the state commission before an electric utility company operating in the state may divest or transfer distribution

facilities. Failure to comply with applicable laws, rules, regulations, and standards could result in the prevention of operation of

certain facilities or the prevention of the sale of such a facility to a third party, as well as the loss of certain rate authority,

refund liability, penalties, and other remedies, all of which could result in additional costs to a portfolio company and adversely

affect the investment results. In addition, any legislative efforts by the current administration or Congress to overturn or modify

policies or regulations enacted by the prior administration and to place additional limitations on coal and gas electric generation,

mining, and/or exploration could adversely affect our alternative energy investments.

Investments may not receive the initial regulatory approval or license needed to acquire or otherwise operate an

investment, including after substantial costs have been incurred pursuing such investment. Additional or unanticipated

regulatory approvals, including, without limitation, renewals, extensions, transfers, assignments, reissuances, or similar actions,

may be required to acquire or operate infrastructure assets, and additional approvals may become applicable in the future due to

a change in laws and regulations, a change in the portfolio company’s customer(s) or for other reasons. Moreover, permits or

special rulings may be required on taxation, financial, and regulatory related issues. There can be no assurance that a portfolio

company will be able to (i) obtain all required regulatory approvals that it does not yet have or that it may require in the future,

(ii) obtain any necessary modifications to existing regulatory approvals, or (iii) maintain required regulatory approvals. Any

delay in obtaining or failure to obtain and maintain in full force and effect any regulatory approvals, or amendments thereto, or

delay or failure to satisfy any regulatory conditions or other applicable requirements could prevent operation of a facility, sales

to third parties, or could result in additional costs and adversely impact the returns generated by the investment.

Environmental laws, regulations, and regulatory initiatives (including potential climate change initiatives) play a

significant role in the power, infrastructure, and renewable and alternative energy industry and can have a substantial impact on

investments in this industry. A portfolio company’s projects may be subject to changing and increasingly stringent

environmental and health and safety laws, regulations, and permit requirements. For example, global initiatives to minimize

pollution have played a major role in the increase in demand for natural gas and alternative energy sources, creating numerous

new investment opportunities. Conversely, required expenditures for environmental compliance have adversely impacted

investment returns in a number of segments of the industry. The energy and power industry will continue to face considerable

oversight from environmental regulatory authorities and significant influence from non-governmental organizations and special

interest groups. Our investment funds may invest in portfolio companies that are subject to changing and increasingly stringent

environmental and health and safety laws, regulations, and permit requirements.

Estimates of factors such as solar energy intensity and movement of wind and water flow (for solar, wind, and

hydroelectric power, respectively) by qualified engineers are often a key factor in valuing certain energy and power companies.

The process of making these estimates is complex, requiring significant decisions and assumptions in the evaluation of

available geological, geophysical, engineering, and economic data. Estimates or projections of market conditions and supply

and demand dynamics are key factors in evaluating potential investment opportunities and valuing the investments and related

assets. The aforementioned estimates are subject to wide variances based on changes in market conditions, underlying

assumptions, and technical or investment-related assumptions.

The operation and financial performance of any renewable energy investment will be significantly dependent on

governmental policies and regulatory frameworks that support renewable energy sources. Investments in renewable energy and

related businesses and/or assets currently enjoy support from national, state, and local governments and regulatory agencies

designed to finance or support the financing development thereof, such as the U.S. federal investment tax credit and federal

production tax credit, U.S. Department of the Treasury grants, various renewable and alternative portfolio standard

requirements enacted by several states, renewable energy credits, and state-level utility programs, such as system benefits

charge and customer choice programs. Similar support, initiatives, and arrangements exist in non-U.S. jurisdictions as well,

such as in the European Union. Non-U.S. jurisdictions may have more variable views on policies regarding renewable energy

(and, for example, may be more willing or likely to abandon initiatives regarding renewable energy in favor of more carbon-

intensive forms of traditional energy generation). The combined effect of these programs is to subsidize in part the

development, ownership, and operation of renewable energy projects, particularly in an environment where the low cost of

fossil fuel may otherwise make the cost of producing energy from renewable sources uneconomic. There can be no assurance

that government support for renewable energy will continue, that favorable legislation will pass, or that the electricity produced

by renewable energy investments will continue to qualify for support through renewable portfolio standards programs. The

elimination of, or reduction in, government policies (including favorable tax policies) that support renewable energy could have

a material adverse effect on a renewable energy portfolio company’s financial condition or results of operation. Conversely,

because policies favoring renewable energy initiatives may involve economic disincentives on more carbon-intensive forms of

traditional energy generation, such policies may adversely affect other investments that do not involve renewable energy

projects.

Climate change and regulatory and other efforts to reduce climate change could adversely affect our business.

We and our funds’ portfolio companies face a number of risks associated with climate change, including both

transition and physical risks. The transition risks that could impact our company and our funds’ investments in portfolio

companies include those risks related to the impact of U.S. and foreign climate-and ESG-related legislation and regulation, as

well as risks arising from climate-related business trends. Moreover, we and our funds’ investments in portfolio companies are

subject to risks stemming from the physical impacts of climate change.

New climate change-related regulations or interpretations of existing laws may result in enhanced disclosure

obligations that could negatively affect us or our funds’ investments in portfolio companies and also materially increase our

regulatory burden. Increased regulations generally increase the costs to us, our funds, and our funds’ portfolio companies, and

those higher costs may continue to increase if new laws require additional resources, including spending more time, hiring

additional personnel, or investing in new technologies. Moreover, significant increases in regulatory compliance expenses may

negatively impact our funds and their portfolio company investments. In particular, compliance with climate and other

sustainability or ESG-related rules in the EU is expected to result in increased legal and compliance costs and expenses, which

would be borne by us, our funds, and/or our funds’ portfolio companies. In addition, our funds’ portfolio companies could face

transition risk if carbon-related regulations or taxes are implemented. See “Risks Related to Regulation and Litigation—

Regulatory initiatives in jurisdictions outside the United States could adversely affect our business” and “Increasing scrutiny

from stakeholders on sustainability matters, including our ESG reporting, exposes us to reputational and other risks.”

We also face business trend-related climate risks. Certain fund investors are increasingly taking into account ESG

factors, including climate risks, in determining whether to invest in the funds we manage. In addition, our reputation and

investor relationships could be damaged as a result of our involvement, or our funds’ involvement, in certain industries,

portfolio companies, or transactions associated with activities perceived to be causing or exacerbating climate change, as well

as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate

change.

Moreover, significant physical effects of climate change, including extreme weather events, such as hurricanes or

floods, can also have an adverse impact on certain of our funds’ investments in portfolio companies and other investments,

particularly real asset and infrastructure investments and portfolio companies that rely on physical factories, plants, or stores

located in affected areas. As the effects of climate change increase, we expect the frequency and impact of weather and climate

related events and conditions to increase as well.

Investments in the insurance industry (including our investment in Fortitude) could be adversely impacted by insurance

regulations and potential regulatory reforms.

Carlyle FRL, L.P., an affiliated investment fund (“Carlyle FRL”), holds a 38.5% controlling interest in Fortitude,

inclusive of our 10.5% interest. The insurance industry is highly regulated and the regulators in many jurisdictions have broad,

and in some cases discretionary, authority over insurance companies, including, among other things, with respect to marketing

practices, policy rate increases, reserve requirements, capital adequacy, permissible investments, and affiliate transactions. In

addition, the insurance sector is subject to frequent regulatory change. While we intend to invest in companies and acquire

businesses that seek to comply with applicable laws and regulations, the laws and regulations relating to the insurance industry

are complex, may be ambiguous, or may lack clear judicial or regulatory interpretive guidance. Even where laws or regulations

purport to be the same across different jurisdictions, they may be inconsistently applied by the regulators of the different

jurisdictions.

In terms of regulatory changes, the following changes in particular may affect the operations and prospects of our

investments in the insurance industry, including Fortitude: (i) changes to interest rates and policies of central banks and

regulatory authorities; (ii) changes in applicable direct or indirect taxes, levies or charges; (iii) changes in government or

regulatory policy that may significantly influence investor decisions in particular markets in which our investments operate; (iv)

changes relating to the capital adequacy framework and rules designed to promote financial stability, both on an individual

(re)insurance company level and on a group level; (v) changes to policyholder protections; and (vi) developments in financial

reporting. An adverse review or determination by any applicable judicial or regulatory authority of any such law or regulation,

or an adverse change in applicable regulatory requirements, judicial or regulatory interpretation, or reimbursement programs,

could have a material adverse effect on the operations and/or financial performance of our investments in the insurance industry

(including Fortitude) and may increase their compliance and legal costs. Any such costs could negatively impact the value of

our investments and the returns we are able to generate on such investments. See “Risks Related to our Company— Adverse

economic and market conditions and other events or conditions throughout the world could negatively impact our business in

many ways, including by reducing the value or performance of the investments made by our investment funds and reducing the

ability of our investment funds to raise capital, any of which could materially reduce our revenue, earnings, and cash flow and

adversely affect our financial prospects and condition.”

Insurance regulatory authorities and regulatory organizations continue to scrutinize alternative asset managers’

involvement in the insurance industry, including with respect to the ownership by such managers or their affiliated funds of,

and the management of assets on behalf of, insurance companies. For example, insurance regulators have increasingly focused

on the terms and structure of investment management agreements, including whether they are at arms’ length, establish control

of the insurance company, grant the asset manager excessive authority over the investment strategy of the insurance company,

or provide for management fees that are not fair and reasonable. Regulators have also increasingly focused on the risk profile of

certain investments held by insurance companies (including, without limitation, structured credit assets such as collateralized

loan obligations), appropriateness of investment ratings and potential conflicts of interest (including affiliated investments), and

potential misalignment of incentives and any potential risks from these and other aspects of an insurance company’s

relationship with alternative asset managers that may impact the insurance company’s risk profile. This enhanced scrutiny may

increase the risk of regulatory actions against us and could result in new or amended regulations that limit our ability, or make it

more burdensome or costly, to enter into investment management agreements or advisory with insurance companies and

thereby grow our insurance strategy.

Our relationship with Fortitude may not generate a meaningful contribution to our revenue and our indirect ownership of

Fortitude could give rise to real or apparent conflicts of interest.

While we expect to derive a meaningful contribution to our revenue across our business segments from our investment

in and strategic asset management relationship with Fortitude, as described in Note 5 to Part II, Item 8 “—Investments—

Strategic Investment in Fortitude,” we may not be successful in doing so. Pursuant to investment management agreements into

which we have entered with Fortitude subsidiaries and certain companies with which they have reinsurance agreements (the

“Ceding Companies”), certain of our subsidiaries receive performance fees and/or management fees from carry funds and

separately managed accounts into which Fortitude Re and the Ceding Companies invest. Through its subsidiaries we managed

or advised$17.5 billion of capital attributable to investments made under these investment management agreements, as of

December 31, 2023. In addition, in April 2022, we entered into a strategic advisory services agreement with certain subsidiaries

of Fortitude through our insurance investment advisor, Carlyle Insurance Solutions Management L.L.C. (“CISM”). Under the

agreement, CISM provides Fortitude with certain services, including business development and growth, transaction origination

and execution, and capital management services in exchange for a recurring management fee based on Fortitude’s general

account assets, which adjusts within an agreed range based on Fortitude’s overall profitability. Such management fee may

decline if there is a corresponding decline in the fair value of the assets we manage and/or the performance of the portfolio.

Our investment management agreements with Fortitude subsidiaries and the Ceding Companies are terminable under

certain circumstances. If such investment management agreements were terminated, it could have a material adverse effect on

our business, results of operations, and financial condition. There can be no assurance that the benefit we receive from Fortitude

subsidiaries will not decline due to a disruption or decline in Fortitude’s business or a change in our relationship with Fortitude,

including our investment income from our indirect interest in Fortitude and/or investment management agreements with

Fortitude subsidiaries and the Ceding Companies. We may be unable to replace a decline in the revenue derived from

investments made in our funds and entities by Fortitude Re and/or the Ceding Companies on a timely basis if our relationship

with Fortitude were to change or if Fortitude were to experience a material adverse impact to its business.

Carlyle FRL owns a controlling interest in Fortitude and has the right to appoint a majority of its board of directors.

As a result, there may be real or apparent conflicts of interest with respect to matters affecting the Company, Carlyle-managed

funds, and their portfolio companies and Fortitude, including with respect to the fiduciary duties that our employees that are

board members owe to Fortitude in addition to the duties that they have to the Company. In addition, conflicts of interest could

arise with respect to transactions involving business dealings between the Company, Fortitude and each of their respective

affiliates. The foregoing conflicts of interest may also arise with respect to subsidiaries of Fortitude.

Our investments in the life sciences industry may expose us to increased risks.

Investments by Abingworth may expose us to increased risks. For example:

•Life sciences and healthcare companies are subject to extensive regulation by the U.S. Food and Drug

Administration, similar foreign regulatory authorities and, to a lesser extent, other federal and state agencies.

These companies are subject to the expense, delay, and uncertainty of the product approval process, and there

can be no guarantee that a particular product candidate will obtain regulatory approval. In addition, the

current regulatory framework may change or additional regulations may arise at any stage during the product

development phase of an investment, which may delay or prevent regulatory approval or impact applicable

exclusivity periods. If a company in which our funds are invested is unable to obtain regulatory approval for a

product candidate, or a product candidate in which our funds are invested does not obtain regulatory approval,

in a timely fashion or at all, the value of our investment would be adversely impacted. Moreover, a clinical

trial (including enrollment therein) or regulatory approval process for pharmaceuticals has and may in the

future be delayed, otherwise hindered, or abandoned as a result of epidemics (including COVID-19), which

could have a negative impact on the ability of the investment to engage in trials or receive approvals, and

thereby could adversely affect the performance of the investment. In the event such clinical trials do not

comply with the complicated regulatory requirements applicable thereto, such companies may be subject to

regulatory actions.

•Intellectual property often constitutes an important part of a life sciences company’s assets and competitive

strengths, particularly for royalty monetization transactions. To the extent such companies’ intellectual

property positions with respect to products in which Abingworth invests, whether through a royalty

monetization or otherwise, are challenged, invalidated, or circumvented, the value of Abingwoth’s investment

may be impaired. The success of a life sciences investment depends in part on the ability of the

biopharmaceutical or medical device companies in whose products Abingworth invests to obtain and defend

patent rights and other intellectual property rights that are important to the commercialization of such

products. The patent positions of such companies can be highly uncertain and often involve complex legal,

scientific, and factual questions.

•The commercial success of products could be compromised if governmental or third-party payers do not

provide coverage and reimbursement, breach, rescind, or modify their contracts or reimbursement policies or

delay payments for such products. In both the U.S. and foreign markets, the successful sale of a life sciences

company’s product depends on the ability to obtain and maintain adequate coverage and reimbursement from

third-party payers, including government healthcare programs and private insurance plans. Governments and

third-party payers continue to pursue aggressive initiatives to contain costs and manage drug utilization and

are increasingly focused on the effectiveness, benefits, and costs of similar treatments, which could result in

lower reimbursement rates and narrower populations for whom the products in which Abingworth invests will

be reimbursed by payers. For example, in the U.S., federal legislation has passed that modifies coverage,

reimbursement, and pricing policies for certain products. Although certain components of such legislation

have yet to be implemented or defined by regulatory agencies, such legislation may result in the unavailability

of adequate third-party payer reimbursement to enable Abingworth to realize an appropriate return on its

investment.

The aviation leasing industry is subject to significant volatility and may expose us to additional risks.

Carlyle Aviation Partners participates in the aircraft leasing industry, which has historically been cyclical in nature for

a number of reasons outside the control of industry participants, including: (i) the demand for aviation travel; (ii) geopolitical

and other events, including the war in Ukraine, the Israel-Hamas war, and other wars, civil disturbances, acts of terrorism,

outbreaks of epidemic diseases, including the COVID-19 global pandemic; and natural disasters; (iii) governmental regulation,

including regulation of trade, such as the imposition of import and export controls, tariffs, and other trade barriers; (iv)

weakness in the capital and credit markets and the availability of credit; (v) significant decreases in purchasing power caused by

inflation or otherwise; (vi) fluctuations in interest rates whether caused by changes in monetary policy, lack of supply, or other

economic conditions; (vii) changing political conditions, including risk of rising protectionism and authoritarian regimes,

restrictions on immigration, or impositions of new trade barriers, including additional economic sanctions or export controls

(including those introduced due to the war in Ukraine); (viii) cyber risk, including information hacking, viruses, and malware;

(ix) operating costs, availability and price of jet fuel, and general economic conditions affecting aircraft operations; (x)

customer restructurings and bankruptcies and decreases in the creditworthiness of customers; (xi) manufacturer production

levels and technological innovation; (xii) aircraft and engine models being retired or otherwise made obsolete; (xiii) the

industry ceasing to produce aircraft or engine types; (xiv) new-entrant manufacturers producing additional aircraft that compete

with existing models; (xv) aircraft age and the advent of newer models of aircraft; (xvi) airworthiness directives and service

bulletins; (xvii) safety, noise, and emission standards and regulations; and (xviii) the availability of spare parts.

A decline in demand for leased aircraft generally, or as a result of the factors described above, may result in decreases

in rental rates, result in lease defaults, and delay or prevent the re-lease or sale of assets on favorable terms.

Risks Related to Our Common Stock

The market price of our common stock may decline due to the large number of shares of common stock eligible for future

sale.

The market price of our common stock may decline as a result of sales of a large number of shares of common stock in

the market in the future or the perception that such sales could occur. These sales, or the possibility that these sales may occur,

also may make it more difficult for us to sell common stock in the future at a time and at a price that we deem appropriate.

Subject, in some cases, to compliance with our insider trading policy, minimum retained ownership requirements and

limitations applicable to affiliates under Rule 144 under the Securities Act, all of these shares are freely tradable. In addition,

the holders of these shares have the benefit of registration rights agreements with us. Moreover, as holders of freely tradable

common stock rather than Carlyle Holdings units, the Former Private Unitholders are now able to more easily sell shares of

common stock into the market (or donate shares of common stock to charities which in turn may sell these into the market) than

was the case before the Conversion. For example, the Former Private Unitholders are no longer subject to restrictions that in

most cases limited their ability to exchange Holdings Units for common units to prescribed quarterly exchange dates. This

could result in the Former Private Unitholders disposing of their equity interests in us more quickly and/or at a higher volumes

than in the past, and the market price of our common stock could decline as a result. Subject to the restrictions described below,

we may issue and sell in the future additional shares of common stock. The issuance of additional equity securities or securities

convertible into equity securities would also result in dilution of our existing shareholders’ equity interest. The issuance of the

additional shares of common stock, the sale of shares of common stock by our significant shareholders, and the vesting and sale

of restricted stock units or the perception that such sales may occur could cause the market price of our common stock to

decline.

As of December 31, 2023, our Chief Executive Officer held a total of 6,532,880 unvested restricted stock units

(inclusive of unvested dividend equivalent units that have been credited on such awards) in respect of awards that were granted

to him outside of the Equity Incentive Plan in connection with his hiring. Under our Equity Incentive Plan, we had 22.2 million

unvested restricted stock units outstanding as of December 31, 2023. In June 2021, our shareholders approved an amended and

restated Equity Incentive Plan pursuant to which we were authorized to issue awards in respect of up to 16,000,000 shares of

common stock and, at our 2023 Annual Meeting of Shareholders, our shareholders approved an amendment and restatement of

the Equity Incentive Plan to increase the shares of common stock reserved for issuance under the Equity Incentive Plan by an

additional 23,800,000 shares (from 16,000,000 shares prior to the amendment and restatement to a total of 39,800,000 shares

following the amendment and restatement). As of December 31, 2023, the total number of shares of common stock available for

grant under the amended and restated Equity Incentive Plan was 27.3 million and, following the grant of awards in February

2024, the total number of shares of common stock available for grant under the amended and restated Equity Incentive Plan was

10.1 million. A further increase in the number of shares available for grant under the Equity Incentive Plan would require

shareholder approval, and any such approval would result in more shares that may be delivered in settlement of vested restricted

stock unit awards and that may ultimately be sold in the market, which could lead to a decline in the market price of our

common stock. We have filed several registration statements and intend to file additional registration statements on Form S-8

under the Securities Act to register shares of common stock or securities convertible into or exchangeable for common stock

issued or available for future grant under our amended and restated Equity Incentive Plan, when applicable. Any such Form S-8

registration statement will automatically become effective upon filing. Accordingly, common stock registered under such

registration statement will be available for sale in the open market. As restricted stock unit awards vest and shares of common

stock are delivered to restricted stock unit holders, the market price of our common stock may decline if such holders elect to

sell their shares of common stock. Morgan Stanley, our equity plan service provider, may, from time to time, act as a broker,

dealer, or agent for, or otherwise facilitate sales in the open market through block transactions or otherwise of our common

stock on behalf of, plan participants, including in connection with sales of shares of common stock to fund tax obligations

payable in connection with the vesting of awards under our amended and restated Equity Incentive Plan.

The market price of our common stock has been and may continue to be volatile, which could cause the value of your

investment to decline.

Our common stock may trade less frequently than those of certain more mature companies due to the limited number

of shares of common stock held by non-affiliates outstanding. Due to such limited trading volume, the price of our common

stock may display abrupt or erratic movements at times. It also may be more difficult for investors to buy and sell significant

amounts of our common stock without an unfavorable impact on prevailing market prices.

The market price of our common stock has been and may continue to be volatile and could be subject to wide

fluctuations. Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well

as general economic, market, or political conditions, could reduce the market price of our common stock in spite of our

operating performance. In addition, our operating results could be below the expectations of public market analysts and

investors due to a number of potential factors, including variations in our quarterly operating results or dividends to common

stockholders, additions or departures of key management personnel, failure to meet analysts’ earnings estimates, publication of

research reports about our industry, litigation, and government investigations, changes or proposed changes in laws or

regulations or differing interpretations or enforcement thereof affecting our business, adverse market reaction to any

indebtedness we may incur or securities we may issue in the future, changes in market valuations of similar companies or

speculation in the press or investment community, announcements by our competitors of significant contracts, acquisitions,

dispositions, strategic partnerships, joint ventures or capital commitments, adverse publicity about the industries in which we

participate or individual scandals, another pandemic or global health crisis like the COVID-19 pandemic, general market

conditions, and other events or occurrences, and in response the market price of our common stock could decrease significantly.

You may be unable to resell your common stock at or above the price you paid for them.

In the past few years, stock markets have experienced extreme price and volume fluctuations. Following periods of

volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been

instituted against public companies. This type of litigation, if instituted against us, could result in substantial costs and a

diversion of our management’s attention and resources.

Carlyle Group Management L.L.C. has significant influence over us and its interests may conflict with ours or yours.

Carlyle Group Management L.L.C., which is wholly owned and controlled by our founders and other senior Carlyle

professionals, holds approximately 41% of the voting power of our common stock as of December 31, 2023, pursuant to an

irrevocable proxy granted to it by senior Carlyle professionals and certain other former limited partners of Carlyle Holdings

who became holders of shares of common stock in connection with the Conversion.

For so long as Carlyle Group Management L.L.C. continues to have voting power over a significant percentage of our

common stock, even though such amount is less than 50%, it will be able to significantly influence the composition of our

Board of Directors and the approval of actions requiring stockholder approval. Accordingly, for such period of time, Carlyle

Group Management L.L.C. will have significant influence with respect to our management, business plans, and policies,

including the appointment and removal of our officers. In particular, for so long as Carlyle Group Management L.L.C.

continues to own a significant percentage of our common stock, it will be able to cause or prevent a change of control of our

company or a change in the composition of our Board of Directors and could preclude any unsolicited acquisition of our

company. The concentration of ownership could delay or deter possible changes in control of our company and could deprive

you of an opportunity to receive a premium for your shares of common stock as part of a sale of our company and ultimately

might affect the market price of our common stock. In addition, sales of our common stock by one or more of our founders may

cause the market price of common stock to be volatile. The interests of Carlyle Group Management L.L.C. may not coincide

with our interests or the interests of other holders of our common stock. See “Risks Related to Our Common Stock— The

market price of our common stock has been and may continue to be volatile, which could cause the value of your investment to

decline.”

Our founders have the right to designate members of our Board of Directors.

Pursuant to the stockholder agreements with each of our founders, for so long as such founder and/or his “Founder

Group” (as defined in the stockholder agreements) beneficially owns at least 5% of our issued and outstanding common stock,

each of our founders will have the right to nominate one director to our Board of Directors. In addition, each founder will have

the right to nominate a second director to our Board of Directors until the earlier of (x) such time as such founder and/or his

Founder Group ceases to beneficially own at least 20 million shares of our common stock and (y) January 1, 2027. For so long

as at least one founder is entitled to designate two directors to the Board of Directors, the founders then serving on our Board of

Directors may (i) designate a founder to serve as chair or co-chair and (ii) designate a founder to serve on each of the

compensation and nominating committees and any executive committee, subject to applicable law and listing standards.

Accordingly, for such period of time, our founders will have significant influence over the composition of our Board of

Directors and could prevent certain changes in the composition of our Board of Directors.

Our amended and restated certificate of incorporation does not limit the ability of our former general partner, founders,

directors, officers, or stockholders to compete with us.

Our amended and restated certificate of incorporation provides that none of Carlyle Group Management L.L.C., any

person that controls Carlyle Group Management L.L.C., and our founders, directors and officers, and stockholders will have

any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of

business in which we operate. In the ordinary course of their business activities, these persons may engage in activities where

their interests conflict with our interests or those of our other stockholders.

These persons also may pursue acquisition opportunities that may be complementary to our business and, as a result,

those acquisition opportunities may not be available to the Company. In addition, these persons may have an interest in our

pursuing acquisitions, divestitures, and other transactions that, in their judgment, could enhance their investment, even though

such transactions might involve risks to our common stockholders.

Anti-takeover provisions in our organizational documents and Delaware law may discourage or delay acquisition attempts

for us that stockholders might consider favorable.

Our amended and restated certificate of incorporation and bylaws contain provisions that may make the merger or

acquisition of our company more difficult without the approval of our Board of Directors. Among other things, these

provisions:

•provide for the removal of directors only for cause;

•provide that, if at any time any person or group (other than Carlyle Group Management L.L.C. and its affiliates, a

direct or subsequently approved transferee of Carlyle Group Management L.L.C. or its affiliates) beneficially owns

20% or more of any class of stock then outstanding, that person or group will lose voting rights on all of its shares of

stock and such shares may not be voted on any matter;

•would allow us to authorize the issuance of shares of one or more series of preferred stock, including in connection

with a stockholder rights plan, financing transactions, or otherwise, the terms of which series may be established and

the shares of which may be issued without stockholder approval, and which may include super voting, special

approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;

•prohibit stockholder action by written consent unless such action is consented by the Board of Directors;

•provide for certain limitations on convening special stockholder meetings;

•provide (i) that the Board of Directors is expressly authorized to make, alter, or repeal our bylaws and (ii) that our

stockholders may only amend our bylaws with the approval of at least a majority of all of the outstanding shares of

our capital stock entitled to vote; and

•establish advance notice requirements for nominations for elections to our Board of Directors or for proposing

matters that can be acted upon by stockholders at stockholder meetings.

Moreover, as a Delaware corporation, we are subject to provisions of Delaware law, which may impede or discourage

a takeover attempt that our stockholders may find beneficial. These anti-takeover provisions and other provisions under

Delaware law, our stockholder agreements with our founders and proxy held by Carlyle Group Management L.L.C. could

discourage, delay, or prevent a transaction involving a change in control of our company, including actions that our

stockholders may deem advantageous, or could negatively affect the trading price of our common stock. These provisions could

also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and

to cause us to take other corporate actions you desire.

The provision of our amended and restated certificate of incorporation requiring exclusive venue in the Court of Chancery

in the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against us and our

directors, officers, and stockholders.

Our amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that any claims,

suits, actions, or proceedings arising out of or relating in any way to our amended and restated certificate of incorporation may

only be brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction

thereof, any other court in the State of Delaware with subject matter jurisdiction. This provision may have the effect of

discouraging lawsuits against us and our directors, officers, and stockholders.

If The Carlyle Group Inc. were deemed to be an “investment company” under the Investment Company Act, applicable

restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse

effect on our business.

An entity generally will be deemed to be an “investment company” for purposes of the Investment Company Act if:

•it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing,

reinvesting, or trading in securities; or

•absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of

the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.

We believe that we are engaged primarily in the business of providing asset management services and not in the

business of investing, reinvesting, or trading in securities. We hold ourselves out as an asset management firm and do not

propose to engage primarily in the business of investing, reinvesting, or trading in securities. Accordingly, we do not believe

that The Carlyle Group Inc. is an “orthodox” investment company as defined in section 3(a)(1)(A) of the Investment Company

Act and described in the first bullet point above. Furthermore, The Carlyle Group Inc. does not have any material assets other

than its interests in certain wholly owned subsidiaries, which in turn have no material assets other than general partner interests

in the Carlyle Holdings partnerships. These wholly owned subsidiaries are the sole general partners of the Carlyle Holdings

partnerships and are vested with all management and control over the Carlyle Holdings partnerships. We do not believe that the

equity interests of The Carlyle Group Inc. in its wholly owned subsidiaries or the general partner interests of these wholly

owned subsidiaries in the Carlyle Holdings partnerships are investment securities. Moreover, because we believe that the capital

interests of the general partners of our funds in their respective funds are neither securities nor investment securities, we believe

that less than 40% of The Carlyle Group Inc.’s total assets (exclusive of U.S. government securities and cash items) on an

unconsolidated basis are composed of assets that could be considered investment securities. Accordingly, we do not believe that

The Carlyle Group Inc. is an inadvertent investment company by virtue of the 40% test in section 3(a)(1)(C) of the Investment

Company Act as described in the second bullet point above. In addition, we believe that The Carlyle Group Inc. is not an

investment company under section 3(b)(1) of the Investment Company Act because it is primarily engaged in a non-investment

company business.

The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operation

of investment companies. Among other things, the Investment Company Act and the rules thereunder limit or prohibit

transactions with affiliates, impose limitations on the issuance of debt and equity securities, generally prohibit the issuance of

options, and impose certain governance requirements. We intend to conduct our operations so that The Carlyle Group Inc. will

not be deemed to be an investment company under the Investment Company Act. If anything were to happen that would cause

The Carlyle Group Inc. to be deemed to be an investment company under the Investment Company Act, requirements imposed

by the Investment Company Act, including limitations on our capital structure, ability to transact business with affiliates

(including us) and ability to compensate key employees, could make it impractical for us to continue our business as currently

conducted, impair the agreements and arrangements between and among The Carlyle Group Inc. and our senior Carlyle

professionals, and materially adversely affect our business, results of operations, and financial condition. In addition, we may

be required to limit the amount of investments that we make as a principal or otherwise conduct our business in a manner that

does not subject us to the registration and other requirements of the Investment Company Act.

The consolidation of investment funds, holding companies, or operating businesses of our portfolio companies could make it

more difficult to understand the operating performance of the Company and could create operational risks for the Company.

Under applicable U.S. GAAP standards, we may be required to consolidate certain of our investment funds, holding

companies, or operating businesses if we determine that these entities are VIEs and that we are the primary beneficiary of the

VIE, as discussed in Note 2 to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. The

consolidation of such entities could make it difficult for an investor to differentiate our assets, liabilities, and results of

operations apart from the assets, liabilities, and results of operations of the consolidated VIEs. The assets of the consolidated

VIEs are not available to meet our liquidity requirements and, similarly, we generally have not guaranteed or assumed any

obligation for repayment of the liabilities of the consolidated VIEs.

As of December 31,2023, the total assets and liabilities of the consolidated VIEs reflected in the consolidated balance

sheets were$7.8 billion and$6.9 billion, respectively.

Risks Related to Taxation

Changes in relevant tax laws, regulations, or treaties or an adverse interpretation of these items by tax authorities could

assessed to portfolio investments (companies) or fund income.

Our effective tax rate and tax liability is based on the application of current income tax laws, regulations, and treaties.

These laws, regulations, and treaties are complex, and the manner that they apply to us and our funds is sometimes open to

interpretation. Significant management judgment is required in determining our provision for income taxes, our deferred tax

assets and liabilities, and any valuation allowance recorded against our net deferred tax assets. Although management believes

its application of current laws, regulations, and treaties to be correct and sustainable upon examination by the tax authorities,

the tax authorities (including the Internal Revenue Service (“IRS”), which has received additional funding under the Inflation

Reduction Act of 2022 (the “IRA”) to bolster enforcement of the U.S. tax code) could challenge our interpretation, resulting in

additional tax liability or adjustment to our income tax provision that could increase our effective tax rate.

There may be changes in tax laws or interpretations of tax laws (possibly with retrospective effect) in jurisdictions in

which we operate, are managed, are advised, are promoted, or invest. Such changes could materially increase the amount of

taxes, we, our portfolio companies, our investors, or our employees and other key personnel and service providers are required

to pay. In particular, both the level and basis of taxation may change. Changes to taxation treaties or interpretations of taxation

treaties between one or more such jurisdictions and the countries through which we hold investments, or the introduction of, or

change to, EU directives may adversely affect our ability to efficiently realize income or capital gains and to efficiently

repatriate income and capital gains from the jurisdictions in which they arise.

Past and future changes to tax laws and regulations may have an adverse impact on us, including by materially and

adversely affecting the value of our investments or the feasibility of making certain investments. This could significantly affect

returns to investors, cause us to revalue our net deferred tax assets, and/or have a material change to our effective tax rate and

tax liabilities. For example, the enactment of the TCJA in 2017 resulted in many significant changes to the U.S. federal income

tax laws, including changes to the taxation of carried interest, changes to the deductibility of certain interest expense and

compensation, limitations on the utilization of net operating losses, and changes relating to the scope and timing of U.S.

taxation of earnings from international operations (including through an expanded definition of “controlled foreign

corporations,” introduction of a minimum tax on “global intangible low-taxed income” (“GILTI”), and changes to the

creditability of foreign taxes). In addition, foreign tax credit regulations published in 2022 have introduced significant,

fundamental changes to the definition of what is considered a creditable foreign income tax, including an attribution

requirement, which could have an adverse impact on us, our portfolio companies, and/or our investors. However, the U.S.

Department of the Treasury and the IRS provided temporary relief in 2023 from certain provisions of the foreign tax credit

regulations. Proposed regulations were also issued in 2023 related to functional currency and taxation on foreign exchange

transactions, which could change how taxpayers are currently computing foreign exchange calculations. Further, the IRA

introduced, among other things, a 15% alternative minimum tax on the “adjusted financial statement income” of certain large

corporations and a 1% excise tax on certain actual and deemed stock repurchases. We expect to be an applicable corporation

that is subject to the alternative minimum tax, as well as a covered corporation that is subject to the 1% excise tax. These and

other changes may not only materially change the amount and/or timing of tax we and our portfolio companies may be required

to pay, but may also increase tax-related regulatory and compliance costs. The alternative minimum tax requires complex

computations to be performed that were not previously required in U.S. tax law, significant judgments to be made in

interpretation of the provisions of the IRA, significant estimates in calculations, and the preparation and analysis of information

not previously relevant or regularly produced. The U.S. Department of the Treasury, the IRS, and other standard-setting bodies

have issued some guidance and are expected to issue additional guidance on how the alternative minimum tax provisions of the

IRA will be applied or otherwise administered that may differ from our interpretations. As we comply with the provisions of the

IRA, collect and prepare necessary data, and interpret any additional guidance, we may make adjustments to provisional

amounts that we have recorded that may materially impact our provision for income taxes in the period in which adjustments

are made.

State and local governments may also enact tax laws that could result in fundamental changes in state and local

taxation and have a material adverse effect on our results of operations, financial condition, and cash flow. In particular, both

the level and basis of taxation may change. For example, the State of New York issued final regulations on December 27, 2023,

that will implement comprehensive franchise tax reform for corporations, banks, and insurance companies. This did not have a

material impact to our consolidated financial statements, however we will continue to monitor as additional guidance is released

by the State of New York.

Some countries are implementing, or considering implementing, new legislation relating to remote working following

the COVID-19 pandemic, or ending concessionary treatment applied during the pandemic. Our employees and other key

personnel and service providers remain more diversely located than before the pandemic, and developments in this area could

potentially lead to increased tax and compliance costs, including as result of increased payroll tax and social security costs for

our entities, and our entities being subject to tax in jurisdictions where they are not currently considered to have a taxable

presence. If our employees or other key personnel and service providers bear increased tax costs, or if we need to take a stricter

approach on working practices, this may also affect our ability to retain such individuals.

International tax developments may also significantly impact us. The OECD’s base erosion and profit shifting

(“BEPS”) projectis focused on a number of issues, including the shifting of profits between affiliated entities in different tax

jurisdictions, interest deductibility, and eligibility for the benefits of double tax treaties. Several of the proposed measures,

including measures covering treaty abuse (including an anti-abuse “principal purpose” test), the deductibility of interest

expense, local nexus requirements, transfer pricing, and hybrid mismatch arrangements are potentially relevant to some of our

structures and could have an adverse tax impact on our funds, investors, and/or our portfolio companies, including by adversely

impacting our ability to efficiently realize and repatriate income and capital gains from the jurisdictions in which they arise.

Many individual jurisdictions have introduced domestic legislation implementing certain of the BEPS action points, but,

because timing of implementation and the specific measures adopted will vary among participating member countries,

significant uncertainty remains regarding the impact of the BEPS proposals. Moreover, manyof the jurisdictions in which we

have made (or expect to make) investments have now ratified, accepted, and approved the OECD’s Multilateral Instrument that

brings into effect a number of relevant changes to double tax treaty eligibility. While these changes continue to be introduced,

there remains uncertainty as to whether and to what extent we may benefit from such treaties and whether our funds may look

to their investors in order to derive tax treaty or other benefits. This position is likely to remain uncertain for a number of years.

In addition, the EU has adopted (and subsequently extended) an Anti-Tax Avoidance Directive (the “ATAD rules”),

which directly implements some of the BEPS project action points within EU law and requires EU Member States to transpose

the ATAD rules into their domestic laws. The ATAD rules, which include rules targeting reverse hybrids, and the domestic

laws that implement them are extensive, complex, and could apply to a wide range of scenarios. While certain countries have

issued guidance on the application of these rules, the impact of the ATAD rules and their application to our entities remains

uncertain. These rules could have an adverse tax impact on our firm, funds, investors, and/or our portfolio companies.

On January 17, 2023, the European Parliament approved a proposal for an anti-tax avoidance directive laying down

rules to prevent the misuse of shell entities for tax purposes within the EU (the “Unshell Proposal,” also known as “ATAD

III”). The final text will need to be approved by the Council of the European Union. If implemented, the Unshell Proposal

could, among other things, impose additional taxes on our entities (including by imposing additional limitations on the

deductibility of interest payments) and/or impact our ability to repatriate investment returns and/or international profits in a tax

efficient way resultingin additional tax costs and/or reporting, disclosure, and computation obligations (which could result in

increased administrative and compliance costs) for our entities.

Moreover, a number of further proposals from the European Commission have or are expected to be issued that further

enhance and move beyond the work on the BEPS project. First, a package of tax reforms was adopted by the European

Commission on September 12, 2023, comprising the “Proposal for a Council Directive on Business in Europe: Framework for

Income Taxation” (“BEFIT”) (which seeks to produce a comprehensive solution for business taxation in the EU) and the

“Proposal for a Council Directive on transfer pricing” (which seeks to harmonize transfer pricing rules within the EU and

ensure a common approach to transfer pricing). BEFIT aims to introduce a common set of rules for EU companies to calculate

their taxable base while ensuring a more effective allocation of profits between EU countries. Following adoption by the

European Council, the proposals are intended to come into force on July 1, 2028 (for BEFIT) and January 1, 2026 (for the

transfer pricing proposals). BEFIT has the potential to alter taxing rights with the EU, and may include substantive changes to

applicable tax rules. Second, the European Commission has proposed changes to the procedures used across the European

Union in respect of withholding taxes. Specifically, the changes are aimed to simplify the procedures for a refund or to apply

for relief at the source; however, the proposal could have broader implications. If adopted, these withholding tax proposals are

expected to come into effect from January 1, 2027. Whether these proposals will be taken forward, and if so the details and

timing of their implementation and the impact on our funds, or any entities in or through which our funds invest, is uncertain.

The OECD has also issued proposals, commonly referred to as “BEPS 2.0,” which fundamentally change the

international tax system. The proposals are based on two “pillars” involving the shifting of taxing rights to the jurisdiction of

the consumer (“Pillar One”) and ensuring all companies pay a global minimum corporate tax (“Pillar Two”).

Under Pillar One, multinational enterprises (“MNEs”) with an annual global turnover of at least EUR 20 billion willbe

subject to rules allocating a formulaic share of consolidated profits in excess of a 10% profit margin to the jurisdictions where

their consumers or users are located (subject to threshold rules). MNEs carrying on specific low-risk activities are excluded,

including “regulated financial services.” Pillar Two imposes a minimum effective tax rate of 15% on MNEs that have

consolidated revenues of at least EUR 750 million in at least two out of the last four years. Pillar Two introduces two related tax

measures (the “GloBE” rules): the income inclusion rule (“IIR”) imposes a top up tax on a parent entity where a constituent

member of the MNE group has low-taxed income, while the undertaxed payment rule (“UTPR”) applies to intra-group

payments if a constituent member’s income is not taxed by an IIR. In addition, a subject to tax rule (“STTR”) will permit source

jurisdictions to impose limited withholding taxes on low-taxed related party payments, which will be creditable against the

GloBE rules tax liability. The OECD has released model rules and commentary for Pillar Two, including guidance on the

treatment of taxes paid by U.S. companies on non-U.S. income under the U.S. Global Intangible Low-Taxed Income regime.

The proposals are complex and subject to significant uncertainty, and consultation in respect of certain aspects of the rules is

ongoing as we await further guidance from the OECD. It is anticipated that certain classes of entities that are typically exempt

from tax will be outside of the scope of Pillar Two, including investment funds and real estate investment vehicles (as

respectively defined), which are the ultimate parent entity of the MNE group (and certain holding vehicles of such entities);

however, the application of these exemptions to our entities remains open to significant uncertainty. Although certain elements

of Pillar Two have been implemented or are due to be implemented imminently, important details, in particular on the

implementation of certain elements of Pillar One, are still awaited. The UTPR is not expected to apply until 2025.

Various countries have implemented or intend to implement the OECD’s recommended model rules. In particular, the

Council of the European Union formally adopted Pillar Two and required all 27 EU member states to adopt local legislation

during 2023 to implement Pillar Two rules that apply in respect of the fiscal years beginning from December 31, 2023, and a

number of other countries outside the EU member states have implemented (or are currently proposing to implement) core

elements of the Pillar Two proposal. Many other countries will also seek to implement other proposals including a potential

digital services tax. There remains significant uncertainty as to the interaction of these rules and, subjectto the development and

implementation of both Pillar One and Pillar Two (including the details of any domestic legislation, double taxation treaty

amendments, and multilateral agreements that may be necessary to implement them), effective tax rates could increase for our

firm, funds, portfolio companies, and investors, including by way of higher levels of tax being imposed, possible denial of

deductions, increased withholding taxes, and/or profits being allocated differently. It is likely that our entities will also be

subject to significant additional compliance and/or reporting obligations. Any tax laws, regulations, or treaties newly enacted or

enacted in the future may also cause us to revalue our net deferred tax assets and have a material change to our effective tax rate

and tax liabilities, as a result.

Moreover, the Netherlands continues to provide additional updates to its withholding tax on dividends. As of January

1, 2024, dividend distributions made by Dutch companies to “associated beneficiaries” established in blacklisted jurisdictions

(or non-blacklisted jurisdictions, in the case of situations that are deemed to be “abusive”) may be subject to a conditional

withholding tax. The applicable tax rate is linked to the highest corporate income tax in the relevant year (being 25.8% in

2024). A draft bill, including amendments, on a proposed dividend withholding tax exit charge has been presented to

parliament. If the bill is accepted, it would be retroactively effective as of December 8, 2021. We are evaluating and monitoring

the impact of these changes, which could result in additional withholding taxes being levied on our investment funds or on

repatriation of income and gains generated.

U.S. and foreign tax regulations could adversely affect our ability to raise funds from certain foreign investors and increase

We must comply with complicated and expansive information tax reporting regimes in multiple jurisdictions, which

require us to perform due diligence and to report information about certain account holders and investors, as well as potential

withholding. Failure to comply with these requirements could result in increased administrative and compliance costs for our

investment entities and, in some cases, could subject our investment entities to increased withholding taxes or monetary

penalties.