Thank you for standing by. Welcome to The Carlyle Group third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Daniel Harris, Head of Investor Relations. Thank you, Josh. Good morning, and welcome to Carlyle's third quarter 2023 earnings call. With me on the call this morning is our Chief Executive Officer, Harvey Schwartz, and Chief Financial Officer, John Redett. Earlier this morning, we issued a press release and a detailed earnings presentation, which is also available on our investor relations website. This call is being webcast, and a replay will be available on our website. We will refer to certain non-GAAP financial measures during today's call. These measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. We have provided reconciliation of these measures to GAAP in our earnings release to the extent reasonably available. Any forward-looking statements made today do not guarantee future performance, and undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identi fied in the risk factors section of our annual report on Form 10-K, that could cause actual results to differ materially from those indicated. Carlyle assumes no obligation to update any forward-looking statements at any time. So turning to our results. For the third quarter, we generated $205 million in fee-related earnings and $367 million in distributable earnings, with DE per common share of $0.87. Our net accrued carry balance was $3.5 billion as of the end of the quarter, and we declared a quarterly dividend of $0.35 per common share. In order to ensure participation by all those on the call today, please limit yourself to one question and return to the queue for any additional follow-ups. And with that, let me turn the call over to our Chief Executive Officer, Harvey Schwartz. Thanks, Dan. Good morning, everyone, and thanks for joining us. Today, I'll update you on the areas where we have strong momentum and where we are focused on accelerating growth. Before getting into that, let me touch on the macro. An already complex environment has become increasingly uncertain with the tragic events unfolding in the Middle East. Multiple wars, along with higher rates and economic uncertainty, have increased volatility and reduced confidence levels. As we all know, sentiment is the greatest market elixir, and negative sentiment has slowed transaction activity over the past year. That said, despite the challenging market backdrop, deal activity has shown signs of improvement as third quarter buyout activity was at the highest pace in over a year. However, my own opinion is that lower activity levels and reduced confidence will likely persist for a bit longer. As we said in the past, our view is that rates will stay higher for longer. After 20 years of declining rates and central bank market intervention, the overall cost of capital has shifted higher and may remain so for some time. Market participants have reluctantly accepted this reality and begun repricing assets based on this outcome. However, as is often the case in market regime shifts, this process of market digestion will take time. Ultimately, higher rates could dampen economic activity. Complex and uncertain environments don't necessarily mean a lack of opportunity, as we've seen over decades navigating through all market cycles. Our global investment teams continue to stay focused on generating excess alpha in this market environment, and with over $70 billion of dry powder across our platform, we have the flexibility to deploy capital and build on strategic partnerships. Now let me shift to areas of focus as we position the firm for growth. First, our insurance strategy has very strong underlying momentum. Fortitude's announced transaction with Lincoln Financial has met all closing conditions and is expected to close later this month. We will pick up approximately $24 billion in new AUM from the increase in Fortitude's general account assets, as well as additional capital that rotates into Carlyle funds. In addition to this transaction, our team is developing new investment and distribution strategies that target the needs of insurance investors and our private credit business. We see substantial growth and potential new transactions across the insurance vertical. Next, private wealth. The Carlyle brand has always been received well in the private wealth channel, and we're building on that momentum. We have raised over $45 billion through this channel over time, and this year we have raised more than $3 billion. I feel good about this channel, given the strength of our brand. Over the coming quarters and years, we expect to accelerate product development and see further growth in sales and distribution. There's a lot of upside in private wealth, and we expect our footprint to be significantly larger in coming years. Moving on, we are seeing momentum across several of our investment strategies in the market today. A few examples include Japan Buyout, U.S. Real Estate, and Secondaries. Each of these strategies are on track to grow meaningfully due to strong investment performance, our deep client relationships, and an attractive set of deployment opportunities. During the quarter, we raised $6.3 billion in new capital, bringing year-to-date fundraising to $20 billion. Overall, we've not been pleased with our pace of fundraising thus far in 2023, but our current expectation is for a step higher in new capital raised throughout the fourth quarter. With the final close of our latest U.S. buyout strategy, we now have $105 billion of corporate private equity assets under management, including $21 billion in dry powder across our CPE funds that allow us to pursue deals of any size around the globe. We continue to raise capital for our next vintage Asia, Europe, and Japan buyout strategies, which should further add to this amount in the coming quarters.... Moving to credit. This is an area we are focused on accelerating our growth and expect to be significantly larger over time. Global Credit has built a diverse set of strategies to serve an increasing number of institutional and private wealth LPs. We manage over $150 billion in assets today, nearly triple the level of just three years ago, including the world's largest CLO business. Our team is focused on the significant opportunity ahead to attract assets that migrate from bank balance sheets to private capital strategies, a trend we expect to play out over the next several years. Finally, let me focus on expense management. We have made faster progress in this area than I originally expected. I give a lot of credit to the team for driving this process. We've identified several areas that have already led to a lower run rate of expenses. As a result, we delivered, we delivered better than expected third quarter FRE. I expect an even larger impact in 2024. The changes we are making across the firm are improving our organizational structure, emphasizing our areas of strength, enhancing our ability to grow, and helping to maintain best-in-class talent across our platform. Closing, our leadership team is focused on taking meaningful actions to drive long-term value for our investors and shareholders. With that, let me now turn the call over to John. Thanks, Harvey. Good morning, everyone. As Harvey highlighted, we delivered better than expected results this quarter, supported by our focus on expense management and our diversified global platform. We produced $367 million in distributable earnings, or $0.87 in DE per share. Year- to- date, we have generated over $1 billion of DE, or $2.38 in DE per share. We finished the third quarter with $382 billion of assets under management, up 4% year-over-year. AUM is poised to increase upon the closing of the Fortitude transaction with Lincoln, which should occur in late November. We expect this transaction to add $40 million in incremental FRE. Across our global platform, we deployed $4.1 billion of capital this quarter, with nearly a third in our solutions strategies and over $1 billion in real estate, infrastructure, and natural resources. Despite investment headwinds, we deployed $12.6 billion of capital year to date, 2023. We realized $5.6 billion of proceeds this quarter for our LPs, largely across our energy, power, solutions, and credit strategies. Year to date, we have returned over $15 billion in cash to our LPs, a higher level than we deployed. Carlyle is one of the few firms that has been able to deliver this outcome. We raised $6.3 billion in capital in the quarter, generally split between each of our segments. And as Harvey said, we expect a stronger fourth quarter of fundraising. In Solutions, we raised $2.4 billion, largely for our secondaries and co-investment strategies, which will continue to raise capital and finalize their fundraising in 2024. In Global Credit, we attracted new capital for opportunistic credit, direct lending, and our private wealth fund, CTAC. Year to date, we have raised nearly $1 billion for Carlyle Strategic Solutions, our asset-based finance strategy. In Global Private Equity, we closed our 8th U.S. buyout fund, and along with our growth sleeve, raised over $16 billion of committed capital. In addition, we raised capital across the latest vintage NGP strategy, Asia Buyout, and Renewables. Shifting to fee-related earnings, management fees totaled $518 million in the third quarter, up modestly compared to the prior year. We have $10 billion of pending fee-earning AUM that will activate fees largely as we deploy additional capital. Capital markets activity remains slow, and transaction and advisory fees of $11 million declined sharply from last year. That said, we expect Q4 transaction revenue to grow as we have good visibility into near-term fee generation. Fee-related performance revenue of $23 million were higher than the third quarter of last year, but as we previously signaled, it declined sequentially. Global Credit FRPR continued to move higher, with good asset flows and strong performance in our evergreen products, while Global Private Equity declined sequentially, a trend that is likely to persist in Q4. Cash compensation and benefits of $256 million declined more than $30 million compared to the second quarter due to lower fee-related performance revenue compensation, as well as our efforts to operate the firm more efficiently. To date, we have actioned approximately $40 million in annual run rate expense savings. Our work here remains in the early innings. G&A expenses were also lower as we benefited from expense discipline and lower fundraising costs. We expect G&A expense to modestly increase in Q4 due to year-end seasonality, though we remain focused on controlling annual expense growth in 2024. Overall, third quarter fee-related earnings of $205 million were relatively flat to the last quarter. We now expect to deliver a higher level of FRE in the second half of 2023 relative to the first half. FRE margin in the third quarter was 37%, and we remain focused on driving this margin higher over time. Our net accrued carry balance totaled $3.5 billion, with a small decline from Q2 due to realizations. ... Our global carry fund portfolio appreciated 2% in the quarter, with relative strength in infrastructure, natural resources, and credit. Our real estate portfolio continued to be pressured by higher rates, despite strong underlying asset performance. Wrapping up, despite the challenging backdrop, we are executing across the firm and see good opportunities across our global platform to create value for both investors and shareholders. With that, let me turn the call over to the operator for your questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please limit yourself to one question and return to the queue for any follow-ups. One moment for questions. Our first question comes from Patrick Davitt with Autonomous Research. You may proceed. Hey, good morning, everyone. You hinted at this earlier- Hey, good morning, Patrick. Okay. Could you better frame any potential timing dynamics between 3Q and 4Q gross flows? Maybe a better idea of how much AUM has already closed so far in 4Q. And then more broadly, perhaps update us on your thoughts on the potential sizing of remaining large funds in the market over the next six to 12 months. Thank you. So, you know, as I said, Patrick, and thanks for the question. As I said, you know, in my prepared remarks, we're particularly pleased with the year-to-date fundraising. I think, you know, we talked about this a bit. You know, with my arrival, one of the things that I really wanted to focus on as a new CEO and a new company, was really spend a lot of time internally, having my people get to know me, and then a lot of time externally. I've now met with, I think, over 200 of our investors globally in just about nine months, and I can really feel the momentum building. And so we would expect a meaningful step up in fourth quarter fundraising. Can't promise these things. Market environments could be delays, but it feels quite good. And then when you think about the funds we have in the marketplace now, real estate, secondaries, Japan, I think as we come into 2024, as I said, the momentum feels quite positive, and we'll see how fourth quarter shakes out, but we're feeling pretty optimistic. Thank you. Thanks. One moment for questions. Our next question comes from Alex Blostein with Goldman Sachs. You may proceed. Hey, good morning. Thanks, everybody. I was hoping we could dig- Hey, Alex. -into the senses a little bit more. Hey, hey, Harvey. So nice progress with expenses so far this quarter. You alluded to run rate savings, and there's more to go from there. So maybe help us frame kinda what's really run rate in the third quarter. How do you expect that to shake out into the end of the year? And then more importantly, what are your early thoughts on FRE growth and expense trajectory for next year? Alex, it's John. As we said on our second quarter earnings call, we really want to drive our FRE margin higher. It is. It's a key focus area for the firm. In the third quarter, we saw a slight uptick in the margin, but we've. Look, we've been really focused on our expense base. I think we've made some progress. As I said earlier, we've already actioned $40 million run rate, and I expect this number, quite frankly, to grow as we continue to focus on expenses. And I would say overall, we've gotten at the expenses faster than we thought we would. I've been in the CFO seat for five weeks, and I'm pretty pleased with the pace of which we're in terms of what we're getting at. Look, every single expense is on the table, I tell you. There is no such thing as a sacred expense, but this is very much a process, and I would just describe it as very, very early days. But overall, we're pleased with the progress we've made in the third quarter. Thanks, Alex. Thank you. Thanks, Alex. One moment for questions. Our next question comes from Craig Siegenthaler with Bank of America. You may proceed. Thanks. Good morning, everyone. Hey, Craig. Morning. So my question is on the CLO business, and just given that you just did a CBAM deal, and you're the largest CLO manager in the world now, we thought you'd have unique perspective on this. But, you know, as you noted, defaults are picking up off a very, very low base. I wanted your perspective on where you see them trending over the next year. And also, given the subordination inherent in a CLO, what are you thinking in terms of loss translation with the equity first loss tranches? And also, I remember this issue came up a few years ago, but, you know, are there scenarios where there could be triggers where management fees could turn off the CLO vehicles? Let me just comment on the broader nature of our CLO business. So the team is doing actually an excellent job. You know, we have an over 20-year history here in managing that business. We're quite proud of the fact that the team has taken the mantle of largest in the world. You know, our expectation, as has been implied by our comments, is that we think we've been in a very benign credit environment and would expect credit to deteriorate on average from here. Having said that, from the standpoint of putting capital to work, I think it's a fantastic time to be putting capital to work. If you look at default rates over the past couple of years, and even today, they're running low relative to average points in history. And so our full expectation is that credit defaults across the industry, whether it's in banking, private markets, et cetera, that you're gonna see this pick up, particularly as you come into refinancing walls in the later 2024, 2025, and 2026, as long as rates stay high and markets stay where they are, which again is our expectation. So the team is doing a really very, very good job of managing this. To give you a little detail strategically about how we're thinking about it, we're in the process right now investing in the business. We have a fund that's in the process of being raised, should close end of November, December, which will be a captive equity fund, which will help really support the business through growth. In terms of any specific triggers or anything like that, why don't we just take that offline, and then, we'll have Dan follow up with you on those level details. I'm happy to, Craig. I'll give you a call. Thanks, Craig. Thank you. One moment for questions. Our next question goes from Ken Worthington with JP Morgan. You may proceed. Hi, good morning, and thanks for taking the question. As we think about fundraising in energy, NGP 13 seems to have had a strong start, and the performance of prior vintages seems to be quite good. I think NGP 12 was a smaller fund. Could 13 be a record-sized natural resource fund for Carlyle? And then, you had good realizations in energy this past quarter. How does the pipeline look for energy realizations as we look out over the next few quarters? Thanks. So, I think the teams have done an excellent job. Our Europe-based team, I think, in particular, has done an excellent job in terms of monetizations and the opportunity set. You know, this area, when you look across our entire complex of energy, infrastructure, renewables, I really think we have sort of a unique team and sort of our capability set. So I think broadly speaking, this is an opportunity for growth. Not going to get into specifics about particular monetizations, because obviously that's subject to market environment, but I can tell you, we feel quite confident with the team and their performance, and they continue to do an excellent job. But too difficult for me to point specifically to, individual asset monetizations, but the pipeline feels pretty good. I think more importantly, the breadth of the team, and when we think about the opportunity set and trends over the next five, 10, 15, 20 years, we feel really, really well positioned, and I think you could broadly discuss this in terms of, you know, energy transition and climate. I think we have some very talented folks on the ground. Great. Thank you. Thank you. One moment for questions. Our next question comes from Glenn Schorr with Evercore ISI. You may proceed. Hi, thanks very much. Morning, Glenn. Good morning. So appreciate the... I think you dangled some, you know, optimistic comments about, some products being developed in both insurance and private wealth. And you gave us some, a lot to chew on in terms of all your dry powder and seeking investments. So my question is just more strategic. Do the individual businesses have plans that it targets goals that they're working on? And the question is, when do we, outsiders, get a glimpse of you bringing that all together and, and, and how to think about the next couple of years? I appreciate that. Yeah. midstream in this, Harvey, but it's been a long wait for investors. Thanks. That's fine. It's my responsibility, Glenn. I appreciate the question. So, let's just go back to sort of how I think about it, and how the team thinks about it. And our approach really is what I'll call, and not to sound boring, or textbook-esque, but principles-based. And by that, I mean there's a very methodical process that we're going through that ranges from business reviews, interactions with LPs, making sure we have all the adjacencies where we think we can provide the most value to our investors, how we can drive growth, how we can manage expenses, and how we want to create operating flexibility across the entire platform. So all those things are in process. In terms of specific areas of growth, and progress we've made to date, I feel really good about the momentum. You know, if you and I were catching up back in February, and you had said, "Hey, Harvey, where do you think the team would be with you in, you know, November?" I don't think we would have made this much progress. I don't—nobody, I'm not patting anybody on the back here, but I don't know that we would have transitioned the CFO, put in a new head of technology, brought in a new head of distribution, brought in a new head of wealth, and really begun to shape the architecture of the firm in a way which I think really allows the firm and the entire leadership team to mobilize the firm. So I feel really good about that. In terms of update, would you call yourself an outsider? Update for outsiders, as I've said to you before, that's really to me, that's an output, and we have to run this very sort of surgically methodical process, but the foundation is really coming together quite well. And so we'll come back to you as soon as we're ready to communicate, but to me, that's an output. And the last thing I'll say is, you know, I truly appreciate your urgency around this. I can promise you, John, myself, the whole leadership team, folks in the businesses, we have way more urgency than you do. So as soon as we're in a position to do all that, we will. I know it's not a great answer for you, but that's our process. Thank you. One moment for questions. Our next question comes from Michael Cyprys with Morgan Stanley. You may proceed. Morning. Thanks for taking the question. I wanted to ask on private credit, just curious how you see the impact of the new proposed bank capital rules on the opportunity set for private credit, and in particular, which product areas do you anticipate banks pulling back from the most? ... and which areas and which opportunities do you think are most attractive for Carlyle versus which areas may be less attractive? Maybe you could talk to some of the steps you may need to take in order to capture the opportunity set. Are there any areas you need to fill in a bit more? Sure. So, I think as you, as you all know, I was the chief financial officer over at Goldman from 2012 to 2017, and so that was really the first significant wave of regulatory change that came through the banking system. And so, you know, I, I saw that process up close. I would expect this process to be similar across the entire banking system, particularly on the back of Silicon Valley Bank, First Republic Bank, et cetera. And so, my expectation, and I say there's a very wide distribution of potential outcomes here, but I'll give you my personal expectation. My personal expectation is there'll be sort of a flurry of activity, maybe one-off transactions. We're involved in several dialogues, on our side, but I think you'll see a flurry of activity. But I really think this is a process that really plays out two, three, four, five years. And I think it really is as simple as the regulatory community doing their job to identify where they feel there's systemic risk and really not the best liability asset management, which we've seen already in a number of cases. And in private markets, as you know, we have long-term capital and the ability to deploy that capital. So I think there's sort of two phases. There's like a quick phase where you see maybe a flurry of transactions over the next year, and then you see a longer term settling in, where we as Carlyle and other market participants, we can provide, you know, we provide very valuable capital to borrowers and to the economy. Where that plays out, I think that's in the full gamut. I mean, we've already seen it sort of in leverage loans and sponsor lending. That's a multiyear... That's an old process, and I think it will continue to extend to those most heavily weighted, risk-weighted assets. Could be in the asset-backed market. You could see things in consumer loans. Certainly, you know, this is going to take multiple years, but we're going to have to work through as an economy and as a system the real estate debt that exists out there. So I think it's going to be very broad-based, but I actually think, again, the longer-term opportunity is going to end up playing out over multiple years. Thank you. Great. Thanks. One moment for questions. Our next question comes from Brennan Hawken with UBS. You may proceed. Good morning. Thanks for taking my questions. Brennan. Hey, Harvey. So, appreciate the focus on expenses and definitely encouraging to hear your messaging there. So, curious how you strike a balance in between discipline and efficiency. And I believe there were some one-time items in private equity in the quarter. Could you maybe help us size those so we can understand what the right base is to think about moving forward? Yeah, Brennan, it's John. You know, look, we're, we're very focused on expenses, but we're more focused on growth. We do see more opportunity for some expense savings. We're not going to be cutting anywhere near the point to where it impacts growth. We're very focused, very focused on growth. In terms of the G&A, I would describe the beat of kind of $20 million-ish as roughly $5 million was more a result of our focus and work around G&A expenses. The rest of the twenty beat, the 15-ish, was really more one-off items that likely won't occur again in the fourth quarter. As I said in my remarks, we do expect the fourth quarter G&A to trend higher than the third quarter, but we're very focused on managing our G&A number in the fourth quarter in 2024. Yeah, I think, I think John said it perfectly. I think this is about two things, high level. One is about operational excellence, and as John said earlier, there's nothing sacred. And so, we're going to be exceptionally disciplined. I think the other thing is it just creates a lot of operational flexibility to invest in growth. And growth areas like wealth, parts of credit, insurance, you know, those are areas where we're going to make sure that we have the resources to participate. But it gives us a lot of operating flexibility. Great. I'm really pleased with what the team has done. In a short period of time, to come up with $40 million of run rate savings, which we'll keep building on, I think, is. Again, I give them a lot of credit. Thank you. One moment for questions. Our next question comes from Brian Bedell with Deutsche Bank. You may proceed. Great. Thanks. Good morning, folks. Good morning, Brian. Good morning, and thanks for the... Just building on, I guess, on the last answer on the expense side, thanks for the non-recurring disclosure there. The $40 million run rate savings—is that starting in the fourth quarter, or is that partially in the third quarter? And then just as more structurally as we move into 2024, I think you mentioned you think you're in the early innings in this regard. Any sense of, you know, whether that you think that you can keep that line either flat or down? I know you definitely want to invest for growth. And then just any commentary around that $40 million between G&A and compensation, and then whether any change to the compensation structure is contemplated for 2024 or is being worked on at this stage? ... Yeah, Brian, it's John. I would think of this more as a 2024 run rate number. I mean, look, I've been in the seat five weeks, as I said earlier, and we really just started this process. That's why I kind of refer to it as the early innings of this kind of expense review process. In terms of compensation, I mean, look, we're a human capital business. Our largest expense is obviously compensation. It's certainly something we're very focused on. We're very aware of what our competitors have done on the compensation front, and I would just say it's part of the overall expense review going forward. And again, you know, look, I, I think in overall, the $40 million number is largely comp driven, compensation driven, and kinda, I would say 15% of it’s roughly G&A. Great. Perfect. Great. Thank you so much. Thank you. Thank you. One moment for questions. Our next question comes from Brian McKenna with JMP Securities. You may proceed. Thanks. Good morning, everyone. Investment Solutions is in the middle of a strong fundraising cycle, and we should see some nice expansion into 2024. But how should we think about growth here longer term, and are there any other strategic opportunities within this business, you know, away from the core strategies that could drive some incremental growth over time? Look, so the short answer to that is yes. So it's, look, it's a fantastic team. It's a great business. It's, it's kind of where the puck is, right? Primary across the industry is a little slower. Secondary activity is, is a lot higher. Our expectation is that'll be sustained for a while. There are a number of different business adjacencies that fit nicely here that the team is growing and building. So I would expect to see this as an area of growth over the next several years, and we have a fantastic team. Thanks, Harvey. Thanks. Thank you. One moment for questions. Our next question comes from Steven Chubak with Wolfe Research. You may proceed. Hi, good morning. Hey, Steven, been a long time. Yeah, it's been too long, Harvey. I hope you're well. Yeah. Nice to hear your voice. Yeah, yours, yours too. Wanted to ask on the FRE margin outlook, and maybe just, at the risk of beating a dead horse, did want to ask on expenses and dig in a bit further, whether the $40 million of run rate cost savings contemplates any incremental investment, so whether it's a gross versus net savings figure, given you do have a lot of growth priorities as well, Harvey, that you outlined. And how we should think about the trajectory for FRE margins in 2024 versus this quarter's jumping off point, given the realization of some of those efficiency benefits. Yeah. So, I mean, John touched on a fair bit of this. I think, you know, and I don't want to disappoint you, but we're not going to give you real specifics on 2024. I would tell you that there's a couple of levers that we're working on, which, when we're ready, we'll dig into a little bit more. But I would say there's sort of three very, very big high-level things happening. One is the run rate savings, and while that's meaningful, and I'm really proud, this is not just about cutting expenses. When you look at the transaction that the team has completed in insurance, as you look at that transaction over the next two years, that'll drive about $40 million of incremental FRE just in that transaction. In the undrawn capital that John talked about, that'll drive about $90 million of top-line fees, the $10 billion. So there's a lot happening in terms of FRE growth. And then, of course, you have the fundraising that we've talked about, and as I said, I feel really good about the momentum, better than I thought I would, nine months in, but there's work to do. There's a lot of work to do. Thank you. One moment for questions. Our next question comes from Dan Fannon with Jefferies. You may proceed. Thanks. Good morning. Morning. Harvey, you mentioned private wealth as a, an area that you can be much larger in $3 billion year to date in flows. Can you talk about what's in the market today, and then how you see that evolving from a product perspective, and what you think is a reasonable goal in terms of organic growth from that channel? I'm really enthusiastic about this as a long-term area of growth for Carlyle. You know, we've had products in the market for a long time. As I mentioned, we've raised $45 billion across closed and evergreen funds. You know, the wealth team has grown pretty substantially, but there's more work to do on product development, growth of the team. We're investing quite heavily. I'm personally spending a fair bit of time in this space. It really became a big initiative for me in, I don't know, month six or month seven. I feel very optimistic here. I think as an industry, we have to be really thoughtful as capital continues to migrate into the sector. I think, you know, if you look at the, the wealth assets around the world, which we all expect will continue to grow, it's a very small percentage in alternatives, so this is going to play out over a decade. But as this growth happens, I think Carlyle, you know, the brand recognition, the history of the firm, the historic presence of the founders, you know, David Rubenstein is branded in and of itself. I think these are all really, really additive, powerful things that provide momentum for Carlyle. But this is going to play out over years. I think most importantly, we just have to have the right products to ensure that the wealth investor gets really high performance. And that's what we're focused on. Thank you. One moment for questions. Our next question comes from Ben Budish with Barclays. You may proceed. Hi, good morning, and thanks for taking the question. Wanted to follow up sort of on the discussion of investing for growth versus kind of cost savings. Harvey, you mentioned a number of sort of growth areas, you know, private credit and the asset-backed opportunity. Insurance, you talked about developing new investment and distribution strategies. And earlier you talked about the kind of the progress you made in terms of hiring. So can we—you know, just kind of, you know, circling back to all of that, in terms of, you know, the future hiring, future growth, do you feel like you have the capabilities you need to sort of go after those opportunity sets? Or where might you need to kind of, you know, increase hiring? Is it on the investment side, the distribution side, or do you feel like you can kind of do what you want to do with, with what you have? Thanks. So, well, first of all, I think the team's amazing. Broadly speaking, I've been so impressed since I got here with the business leaders. You know, world-class organizations, they know how to redeploy resources and how to effectively, you know, tap the brakes, hit the gas. You know, we're not creating new science over here in terms of how we think about expense management and reinvestment. And as I said, the key here is to create operational flexibility. We're not just trying to drive the cost structure down. We want to make sure that we have the best people, retain the best people, attract the best people. So all this is about creating that operational flexibility. The insurance team is really vastly built out through our partners in Fortitude. I think over time, as wealth scales, we'll continue to scale, but we've made meaningful investment there. I think the investing engine in credit is broadly built out. Some of this will be more about at the margin, but I don't, but I don't see as much investment or big gaping holes at this stage. So certainly things will build, and the world's going to be dynamic, and so, you know, we'll pivot to where it's dynamic. But the, but we're certainly very focused on growth. But we're equally, equally focused on running this business in the most disciplined possible way. Thank you. One moment for questions. Our next question comes from Brian Bedell with Deutsche Bank. You may proceed. Oh, great. Thanks very much for the follow-up. Maybe, Harvey, if you could just give us an update on the capital markets business. I know that's an area you didn't focused on, where you think there's a lot of opportunity for, you know, for Carlyle and the product set that you have and the talent you have, right, currently. Maybe as we move into 2024, is that an area where you think you can significantly build the revenue stream on a year-over-year basis, provided, of course, that we have a, you know, a fairly normal market environment? Or is that more of a little bit of a longer-term build? No, I don't think it's a longer-term build. We don't want to be the biggest in the world here in capital markets. And that's really more my feeling for the strategy, but we're coming from such a low base that incremental growth in a normalized market environment should be pretty easy. If we don't deliver that for you, then we're not doing our job. So, I think John mentioned it was a pretty muted quarter, but fourth quarter pipeline feels pretty good. Coming into 2024 in a more normalized environment, I think we have the team now positioned in a way aligned with the businesses in terms of resources, and incentives and degree of focus, that I think that the opportunity set should be much better coming into 2024. Again, subject to market conditions. Now, I would describe it as version 1.0. When we get to a version 2.0, we'll come back to you in terms of how we build that out. But, a lot of this, as I've said before, we have all the raw material. We just need to leverage all the adjacencies we have internally, have the right incentives, stay focused, and then we can drive value through this. Well, that, that's great color. Can I ask one more, or just should I get back in the queue? You got to talk to Dan Harris about that. The... I'll let you ask one more- Go right ahead. But Dan's going to be all fidgety about that, but I will. That's the kind of guy I am. Sure. Thanks. Thanks very much. It'll be a quick one. Just on the fundraising side, obviously optimistic on Q4. Are Are we still in the camp for fundraising in 2023 to exceed that of 2022, or do you think the timing could be, you know, sort of squishy around the December-January timeframe, where that might bump into 2024 a little bit? No, our expectations will exceed 2022, subject to market conditions and some stuff flipping. The other thing I'll say is, you know, we're trying to give you as much insight, but we're not running the place for, you know, November or December, right? Yeah. We're running it for the long term, but I understand your focus on the quarter. No, no, that's good. That's good. Great. Thanks so much for taking my questions. Of course. Thank you. One moment for questions. Our last question comes from Patrick Davitt with Autonomous Research. You may proceed. Hey, thanks for the follow-up. Harvey, you mentioned, you know, the still uncertain environment, so could you maybe better frame how the 4Q realization pipeline looks versus 3Q? Thank you. Yeah, I mean, Patrick, that's obviously a difficult question to answer in the sense we're in some challenging markets. But you know, look, I would say confidence is low today. Uncertainty is elevated. And as Harvey said, you know, we have a lot of dry powder. I like the fact that we have a lot of dry powder. Some of the better investments we've made at Carlyle have been in markets where uncertainty is elevated like today. So I think we feel good about that. But looking forward, projecting realizations is something that's very difficult for us to do. Thanks, Patrick. Thank you. I'd now like to turn the call back over to Daniel Harris for any closing remarks. Yeah. Thanks, everybody. We appreciate your time this morning here in Carlyle. If you have any further questions or follow-ups, please reach out to Investor Relations. We look forward to talking to you again next quarter. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.