Afternoon, I'm Patrick Davitt, the U.S. asset manager analyst here at Autonomous. It's my pleasure to welcome back Carlyle CEO, Harvey Schwartz. As a reminder, That's just my way of making a statement, Patrick. Welcome. Missed the edge of that. Yeah, no worries. It's okay, I'll take yours. Please do. As a reminder. It won't be as dramatic after that. If you have any questions, you can submit them to the Pigeonhole app, and it'll come up here on my iPad, and I'll try to work them in if we have time. Harvey, thanks for coming in. Yeah, great to see you. Good to see you. Maybe to start, it's been just over three years now since you took the seat. I think it would be good start to update on your key takeaways after another year. Has there been any significant evolution on your view of the risks and opportunities for Carlyle from here? Yeah, great. Again, great to see everybody. I would say to frame it, probably the best way to think about it, Patrick, is we're three years into what has turned out to be a six-year plan. The first three years were really about identifying the strategic priorities, committing to the strategic plan, de-emphasizing things that were less important for the firm, establishing the leadership group, overhauling the operating structure of the firm, completely redesigning how we think about capital management. It was sort of a soup to nuts overhaul strategically, and then obviously creating the new leadership team, most of whom are internal, but are very activated, and it's really come together really quite impressively. If you look at the results at the end of year three, record FRE. We grew it from the low $800s to $1.2 billion. The margin when I showed up was worst in the industry, 37%. The team did a remarkable job moving that up 1,000 basis points. We overhauled the compensation plan. There was a lot of very discrete steps taken along that path, which put us in a great place at the end of year three, effectively to come out with our three-year plan, which we announced in February. That three-year plan takes us from $1.2 billion-$1.9 billion, takes the per share from $4 and change to $6 and change. That includes raising $200 billion over three years, and that was really a plan that was in response to all of the shareholders and the investors who said, "Okay, you've put out one-year targets." I wouldn't personally have been comfortable putting out three-year targets in years one, two, and three. I just didn't feel like we were in a position yet to have that kind of visibility on the strategic growth plan. We put out the one-year targets because I felt it was important to give the market some sense of the directionality of the firm. Obviously, the team, the leadership team, did a great job. We beat all those targets pretty meaningfully, we have a lot of confidence in establishing the targets in a way that makes sense. The targets we put out, again, which I just went through, I would say are realistic. It doesn't include any random one-offs. There's no incremental flows for insurance. There's no acquisitions in there. It's very much a core set of numbers which are grounded on basically the platform today and our ability to execute that platform as we come into a super cycle of fundraising. We're going to have all the major flagship funds in the market over the next three years. This year is a little more muted in terms of that because fundraising is still very good. You saw in the first quarter, $13 billion. The super cycle really starts to pick up. We feel very good about the plan. Nothing about the marketplace has changed my view of the plan, other than I would say the geopolitical backdrop, while somewhat more volatile maybe than it was two months ago, actually. It's not like something we wish for, by the way. That trend actually is positive for the firm. The reason I say that is a lot of the expertise we have at the firm really fits, and the structure of the firm fits a global backdrop, which is more about geopolitical splintering than it is about geopolitical cooperation. I'm happy to dive into more of that. Feel great about the plan. The momentum's good. Yes, we feel good. That's helpful. Thanks. We'll dig in on a lot of that in the conversation. Given we have most of the major alternative CEOs here, I'm going to start with a higher-level question. It feels like a broken record at this point, but we're gathered once again with a lot of volatility and uncertainty. This year it's an Iran war, private credit concerns around sticky inflation, higher for longer rates, pick your poison. I think it seems like a pretty toxic mix, I guess, for levered assets. Do you agree with that view, particularly private equity? What is your current thinking on inflation rates and the economy? Okay. Should've gone with bourbon, not water. Well, let me first say, you're not supposed to be combative with your fireside chat host. I don't view it particularly toxic. Okay. Fair. I would say, again, taking a very big step back. What's happening geopolitically, I think is complicated but unsurprising. Why do I say that? We went through a period post the financial crisis where we had very subdued, globally manipulated interest rates, but manipulated for very good reasons. I don't mean manipulation in some bad, devious way. I certainly don't mean it in a toxic way. You had quantitative easing after 2008, you had quantitative easing after the pandemic, and a flood of capital that came into the system, which definitely distorted yield curves around the world. I don't think for assets, that's actually the best thing over a long period of time. I think we just want a normal market clearing cost of capital. Okay. When I think of the backdrop you described, I think your description is accurate in the sense that geopolitical complexity is very high. I think geopolitical risk changed dramatically the day Russia went into Ukraine. I don't think the markets actually really ever priced what that meant. I can tell you what it's resulted in. What it's resulted in is a combination of what you described, stickier inflation, higher rates, which I actually think is a more legitimate cost of capital. What it's really created is geopolitical splintering has led to economic competition for capital. Everywhere you go in the world, the conversations are the same. It's a conversation first and foremost about national security. National security's been completely redefined. It used to be narrowly defined as defense. Now it's defined as energy, defense, data. These are all top-of-mind issues everywhere in the world. It's also defined around the cycle we're in around capital. Every country, U.S., Canada, Europe, Middle East, Japan, Korea, Asia, everyone wants economic growth. Economic growth on the heels of the two catastrophic issues we dealt with, the financial crisis and the pandemic, it's very difficult for governments to fund that given the size of deficits. The demand for private capital for the next foreseeable two cycles, call it 5-15 years, I think is enormous. What you described is right. However, what that has created is a shortage of capital, a high demand for capital, and actually, the marginal return that can be earned on that capital I think is more appropriately priced going forward. Now, of course, you have to be in the right businesses. We've talked about this a little bit. When I showed up at Carlyle, I did my go-around-the-world tour. People said, "Hey, you got a problem in your private equity business. You're not big in software." In credit, they said, "Hey, you haven't grown direct lending big enough. Everybody grew really fast, and you're not big enough in software." Okay, three years later, turns out that's a virtue. Who knew? What you want to have in today's world is a durable franchise that gives you the ability to execute your plan across a number of verticals. When you look at our verticals, aerospace, defense, by far we're the market leader. Healthcare, industrials. All of a sudden, all these what you would've considered old economy industries, these are the industries everyone's focused on globally. Our ability to marginally deploy capital, for the private equity industry, I think the next couple of vintages could be extremely attractive. As you saw, we just announced a cornerstone vehicle for our next buyout fund. We haven't even started capital raising for that fund, and we raised $5 billion at full fees. I think the opportunity to deploy capital over the next five or 10 years will have a complicated backdrop, but I think the marginal risk return will be quite attractive, not because there's just a lot of capital, because I think there's less capital available, but the demand is higher, and that's the backdrop we like. We have the right geographic footprint and the right business mix. I feel good about the return profile. That all makes sense, and I want to dig in on that. You do have assets in the ground. Sure. I imagine that that overlay could complicate the assets in the ground. Through that lens, how are you thinking about the realization outlook, given that overview? How is that tracking, and has there been any noticeable change since the earnings call? No. Okay, let's just take our U.S. buyout fund. I think that's a great example. For those of you who don't know, that's our largest flagship private equity fund. In 2025, we returned $6 billion. We returned close to $7 billion in the first quarter. A lot of people say, "Well, there was Medline." That's true, but there's also been strategic sales, other IPOs. If you look at just over the past two years, we did the largest-ever IPO in Japan. We did the largest-ever IPO in India. We did the third largest two years ago with StandardAero. We did Medline. There's also been strategic sales. If you look at the industry, and actually again, this is a backdrop that sets up really well for deploying capital. If you look at the industry, I think we've outperformed the industry by 500 or 600 basis points on capital return as a percentage of NAV. We bucked the trend on capital return. Where we had some challenges is in our two vintages ago, where we were allocating to consumer, and we underperformed in that, but we shut that down. If you look at the current vintage fund, using U.S. buyout as an example again, it's a first quartile fund. When you look at it against large competitors, if you look at it at a broader peer set of, like, 300, I think it's a second quartile performing fund. It has no assets that are currently challenged. Super unusual for a fund that's 70% or so invested. Again, it's already returning capital. I think the setup, again, for private equity and for private capital is quite robust over the next five to 10 years. Mostly I say that, Patrick, because if you're in the right verticals, the demand for capital is very high. Right. Everywhere you go in the world, people want to talk about investing in their local industries. How do they grow their economies? How do they create employment? How do they address affordability issues? This is a global phenomenon. You have two forms of capital that can provide a solution to this, bank capital and private capital. It's going to require a lot of capital to do these things. On that point, this is from the audience, actually. There was news today about the new military investment or defense investment platform. Remind us how much AUM you currently have allocated to that theme. Given the spending needs you're alluding to, how big do you think the TAM could be for that platform? Okay. Let me take a step back. Yeah. The way, strategically, we're thinking about the firm in terms of areas that we want to deploy capital is the following. We can do this at varying scale. For example, aerospace defense, broadly defined, we've invested close to $40 billion alongside in industrials over 40 years. If you really narrowly define it's closer to $11 billion. If you look at it, we're the only large player in the space, and the performance of the team is extraordinary, and they've been the same team for close to 40 years. Conway did his first transaction in defense back when he formed the firm in 1987. The returns are something like 4.5x your money in high 20s, 30s IRR. The performance is outrageous. What we want to do with the firm is when we see areas where capital demand is very high, what happens is, of course, in a larger fund, the checks are larger. What we're seeing is so much deal flow that we're saying no to a lot of transactions of a smaller ticket size. Got it. By the way, I think you should expect to see us do this as a firm in other verticals when it makes sense. But what do I mean by when it makes sense? What I mean it makes sense is when the demand side for the capital is so high that the deal flow is there. In this particular case, as an example, I would think of this more as like a sleeve where the check size could be $250 million-$300 million, whereas in the larger fund, the check size might be bigger. What this does is it gives us a leverage across the expertise. We're not style drifting, we're actually style enhancing in terms of the expertise enhancing. We can do this in healthcare, we can do this in industrials, we can do this in verticals across the firm. This is the best way for us to transfer the deep, deep expertise we can to an asset class that's growing. I think the TAM's unlimited. Yeah. Everywhere you go, everybody's increasing their defense budgets by 1%, 2%, 5%. I think this is a global phenomenon. I don't think so much about the TAM. I think more about, okay, what's the amount of capital we can deploy and be super effective with our investors, deliver them outstanding returns, and all good things will happen from that. It'll drive a lot of the flywheel, right? You'll get more capital markets fees. Business begets business. It'll influence things we can do in the credit size of the shop, ultimately the secondary side of the firm. It'll have a flywheel effect across the whole platform. Okay. I want to zoom out on private equity more broadly. You guys keep reminding us that your investor capital return, your DPIs, are among the best of the large sponsors. I sense a lot of the more cynical investors I talk to kind of are hyper-focused on the IRRs of some of the flagship funds. Could you maybe help us understand or better understand how the LPs view that IRR versus DPI, and to what extent that focus that the investor has in place. I think LPs are very reasonable and very easy to understand. They want a great partner that's a great manager of their money, takes their money, makes money, returns their money. Right. I don't think anything about LPs changes. I think that's a totally reasonable expectation. I think it's our obligation to fulfill it. I think when you go across the world in all of our funds, we've had huge success doing that. We had one challenging fund in Europe where I changed the leadership. Really one of the best leaders, one of the best investors in the firm, been with the firm over 25 years, is now managing that business. Even the historical performance of that fund over a long period of time is quite good. The last vintages wasn't to our satisfaction. We changed the leadership. If you look across the Japan fund, I was just in Japan for our 26th anniversary of Japan. I think the last fund was, I might get this wrong, I apologize, like 44% gross, 28% net. We capped that most recent vintage at roughly $3 billion. We will grow the next vintage, but we're going to be very careful. I know that shareholders want to hear just growth, growth. We're going to be very systematic about how we grow these asset bases because we want to protect performance. That'll just give us sustained growth over the next three years. We're not trying to grow in the next quarter. Japan feels good. Our tech business in Europe feels good. Actually, our European business feels quite good now with the new leadership. The U.S. buyout business, the seventh vintage, which is the vintage that came through that big capital wave where people were deploying a lot of capital and had consumer, that's not our, as we like to say, not our best work of art. As I said, for the current buyout fund, we've already raised effectively $5 billion. We haven't even started fundraising. Yeah. I feel good about the trajectory, the dialogue with the LPs, and I feel good about the LP dialogue because they know the businesses we're in, and they know the steps we've taken. They know where we changed leadership. They know that we're in very, very attractive sectors. That's why you're seeing the performance of the current vintage in U.S. buyout do so well. It's the team, t he changes we made, and the sectors. You've mentioned the structured financing of the next fund a couple of times, which I think has taken some wind out of the sails that there's an issue in the private credit business. To start, maybe for investors that are less familiar here, could you quickly describe the transaction and how it came together? Yeah. Not private credit, but private equity. Yeah. I'm sorry. No, it's okay. Well, it started with a group of us getting together. There's a lot of information. Since you asked, it started with a group of us getting together a bit over a year ago. We run a balance sheet light firm. Yep. There are times when you run a balance sheet light firm, you feel great about it. There are times when you run a balance sheet light firm where you realize, wow, it'd be great to have incremental capital. If you have infinite capital and you run a balance sheet heavy firm, let's just take the other end of the spectrum. You can do things, Patrick, with that capital. You can say, "Oh, I want to launch this business, so I'll put $1 billion into this business," or, "I'm going to launch this next fund, and I'll put $2 million or $3 million into that fund as the cornerstone capital." There's an attraction to being able to do that. Of course, the cost of that, if you think it's a cost, is that you run with a much heavier balance sheet. Okay. I come from a heavy balance sheet world my whole life, so I'm comfortable with a heavy balance sheet world. I happen to like our balance sheet light model. A group of us got together and said, "Okay, look, we're balance sheet light, but we want to figure out are there ways to use that balance sheet capital, that light capital, in the most efficient way?" We have a business, Carlyle AlpInvest. It's an extraordinary business. It happens to be an extraordinary business almost in any cycle, but it's a really extraordinary business right now. It's really the fastest growing part of the firm. That business is often, Patrick, thought of as a secondaries business. That's a narrow definition of the business. It's a good shorthand for the business, but the right way to think about that business is across four verticals. Secondaries, co-invest, primary, and solutions. They're a manager of effectively fund of funds, picking middle market managers. They obviously can't invest in Carlyle. They manage portfolios, very large scale portfolios, allocating to middle market managers. That's part of their strategy for having connectivity to sponsors. They're obviously one of the four or five hyperscalers in this industry that have been doing this for a long period of time. There's this piece of the business called the solutions business, which is a very fast-growing part of the business, and I think in some respects strategically for the industry. I think the industry will evolve more in this direction where they can be a strategic partner to GPs providing liquidity solutions. Actually, it's mostly to very high performing GPs. We do continuation vehicles. We're very selective about how we do them. Their focus is really on the highest performing GPs and how can they provide them with thoughtful solutions. We brought them into the discussion and we came up with this concept, and basically the concept is how do we create a win-win for clients who want to be investors in our next vintage, who may want liquidity, and how can we use our capital simultaneously? The end solution is not particularly complicated. I don't have to drag you through the details. The end solution is we have some super happy cornerstone LPs, core investors. We used a modest component of the balance sheet and ended up creating effectively $5 billion of investment in the fund as a cornerstone before the fund raise. This much I can tell you. If you went out and you tried to find $5 billion of capital as cornerstone investors, you would not get that at full fees. Wow. What does this do for us? This is kind of magical because, A, it helps us get ahead of the fund raise. Two, it takes pressure off the team, because what we want them really doing is not spending two or three years running around the world raising money. We'd rather have them focused on actually managing the money and investing the capital. It makes some LPs super happy, gives a lot of confidence to the business. Truly is a win-win. It took a little while to put together just because it was creative and innovative. We've subsequently, as you would imagine, we've gotten a bunch of calls into the Carlyle AlpInvest team asking how were they able to do it. There's other GPs that they will now work with to try and replicate this. This is a way the industry will head because the industry needs innovation around how the industry creates capital and provides liquidity. It's a little clunky today. It hasn't really evolved. The Carlyle AlpInvest team is really, I think, doing some incredibly thoughtful work with GPs around the world, and they were helpful to us. I imagine your confidence level in raising a larger fund now is significantly higher? Well, short answer, yes. Yeah. What I would say is, again, you might not love this, so don't misunderstand it. I'm much more focused on the aggregate economics versus having the biggest fund. I do think that this notion that every fund should be bigger than the next fund leads people to create suboptimal economics, and also potentially degradation in returns. I think you have to scale your funds with the market opportunity and you have to protect economics. If you go around the world and you just cut deals to get big checks and you give massive discounts, you can end up with a bigger fund. I think you want to have the right fund that your team can deploy. I think in this particular case, this gives us a big headstart on all that, so I feel really good about it, and the fund. That's a good segue to deployment. There's obviously a lot of dry powder out there. You have a lot of dry powder. At the same time, it seems like there's still some gap between the bid and ask, at the very least in software portfolios. Through that lens, how close do you think we are to seeing a lot more PE deployment? Do you sense any capitulation building from sponsors that have been maybe unwilling to take negative marks in some of those legacy positions? I don't have a good lens into other sponsors or what they're doing. I do think that the software impact, just sharing my own view again, is not really core to our franchise as I highlighted. I do think that, again, these narratives take hold, and I think the narrative when software was considered impenetrable, and you could do ARR loans, and it was the best space to be in because it had repeatable income. It went from being repeatable income with cash flow to you didn't even need cash flow and you could finance the enterprises. That was too extreme, and my guess is this is too extreme also. Right. I think if you had a quadrant of companies and you laid out the quadrant between good capital structure, bad capital structure. Not so well-run company, really well-run company. I think if you have a poorly run company with a poor capital structure, I just think its probability of surviving is low. If you have a really well-run company with a tough capital structure, I suspect it does pretty well. I think that obviously if you have the win-win, if you have a really well-run company with a good capital structure, I think actually you might have excess rents that you're able to extract from the marketplace because the competitive environment will be such that you will accrue income. I think that again, the issue around software today is the uncertainty. As we've all seen, job openings for software analyst is actually up, not down. I think there are great brands out there. My own personal opinion, again, it's not what we do. There's great brands out there in software which will do exceptionally well, and I don't think we should be discounting how smart some of these folks are. Right. That actually, some of my competitors that invest in software, I think they're super smart people. They'll have some companies in the weak quadrant, and they'll have some companies in the extraordinary quadrant. What I find kind of fascinating about this discussion is nobody talks about hardware. We don't have that many assets in software. We have one fund in Europe, which is a super high-performing fund that does technology investing, mid-market technology investing. We talk as much about any exposure they have to software as we do to hardware because the hardware is exploding in value. Right. I think the issue around software is not likely to go away too soon because there's too much uncertainty about how disruptive large language models will be. I think over this time period, again, if you have a tough capital structure and a weak business, yeah, I think it probably doesn't work out so great. I guess moving to Carlyle specifically, how is your deployment pipeline shaping up, and are there any themes emerging that you would point out as most interesting as that develop? I think that, well, in private credit, again, when I showed up, one of the criticisms was, or feedback was, "Hey, you're too small in direct lending, too small in software." We systematically, a year and a half ago, started investing very heavily in the resources in that group. We've brought in new leadership, actually started in January. It's perfect timing for us. What we're seeing is institutional appetite to deploy capital because they see this situation where wealth capital at the margin is not coming in. We're already seeing transactions where terms are more generous. You've immediately seen a reaction to the terms that are available that are better for the lender. Competition has already pulled away from the space. What we're seeing is institutional capital that wants to work with us so we can build. Again, the biggest problem, obviously, about having big software exposure is the possible issue of degraded returns. It's also super distracting. If you have a big direct lending book and you have a lot of software, your teams are spending a lot of time focused on that. It's much harder to be front-footed. That's just common sense. We feel really good about where we are in that business right now. I suspect we'll systematically be able to grow over the next couple of years. Great. Any interesting themes on the PE side? Well, o ther than what I would say is this hard pivot to what you and I could've referred to as old economy. Right. Even, again, just because I was there last week across Asia, if you look at what's happening in Japan, we've been in Japan for 26 years. Japan's an incredible story. After all these years of deflation, where virtually all of our competitors left Japan, we're the only firm that stayed in Japan. We're the only firm that has a dedicated Japan team that David Rubenstein and the founders started 26 years ago. When you see what's happening in Japan, they have completely flipped the approach from a regulatory perspective, a government policy perspective, to encouraging investment, encouraging growth, and encouraging actually the growth of asset management more broadly. They're very explicit about this. This is widely understood. We have a 26-year history of investing in companies. We've built the relationships. They cover verticals from TMT, consumer industrials. There are hundreds and hundreds of companies that trade on the exchange that still trade below book. There are succession challenges that they have to deal with. The important thing that what's happened there socially and culturally is that it's now become much more socially acceptable and culturally welcomed to actually work with a private equity sponsor to take a company public. We actually did four transactions. I think we did one a month this year. The transactions are great. Some of these things are household names, like we bought Kentucky Fried Chicken a year ago. I didn't even know, I'm an ignorant American, I didn't even know that Kentucky Fried Chicken was the food of choice on Christmas in Japan. By the way, how many people knew that, show of hands? That was something I learned right after we bought it. Okay, people, you knew that? I did. I'd seen it at some point. I don't know. I don't know about this though. I call total BS on that. Excuse my language or anybody watching. I just, I don't believe it. I watch a lot of documentaries. Oh, you do? Okay. Well, I didn't know, but I learned very quickly. Yeah. Anyway, some of these are household names. We took Orion Breweries public, which you might not know, although maybe you do. A beer company in Okinawa. I think there's these kinds of opportunities, and again, we're thinking about investing over three, five, seven, 10 years. Again, what makes me most enthusiastic is the marginal demand for the capital that we have and the expertise we have in the sectors we have. If software was still hot, you'd be asking me, as you rightly should, "Hey, what's your plan for getting into software?" I'd be like, "Hey, kind of hard to do." You can't just spin up a software team. You can't just spin up a Japan team. Right? That's what gets me enthusiastic when I think about our energy platform, which is quite unique because we do everything from renewables through to power through to upstream energy. There's really nobody in the world that does upstream energy at our scale. Energy security is top of everyone's mind. Yep. The energy demands are only going to increase, and the infrastructure needs around all this and the opportunities around this from private equity to energy directly are only going to be more pronounced after the war with Iran. Again, we've gone from a world where in the 1990s, just to age myself, in the 1990s, everything was, "Hey, you have to have just-in-time inventory if you want to win," and everything was about maximizing efficiency across all supply chains. Now it's about having just enough inventory. This is a fantastic shift, but what really is the shift is it creates needs for infrastructure build, logistics companies, across a whole value chain of industries which we're involved in. I feel very good about the ability to deploy capital over the next couple of years. Whether we, again, deploy capital next quarter or not, it's not particularly interesting to me. Right. Thanks. On AlpInvest, I think you gave a great overview of how it's a lot more than secondaries, but I do want to talk about secondaries a bit because it feels like, I think we talked about it being a sweet spot last year, so it feels like it's still a sweet spot. I think, based on any estimate, these things can change. This business is going to grow systematically for the foreseeable future. Yep. Okay. The software issue actually compounds it. If the software issue isn't even an issue in the sense of whatever word you used, toxic, before. It actually just delays exits. Sure. Multiples are so compressed. That's really the issue around software right now, is that it's a multiple compression issue more than it is actually showing up in EBITDA performance yet or capital structure. Right. If the multiples are so depressed because of the uncertainty, and that cloud goes on for a while, that's going to lock up a lot of private equity capital for those people that do that business. Okay? That will only add fuel to the growth of Carlyle AlpInvest because as a hyperscaler, when we're in the room with people, the conversation is, how are you thinking about your portfolio? If part of their portfolio is locked up, they may want to manipulate that portfolio in other areas. Yeah. It's just about capital allocation from their perspective, and we can be the capital allocation solution provider. Last one on secondaries. One high-profile CEO has been making a stink about the practice of day one markups, which is standard, to be clear, but I'd like to get your thoughts on it. It's standard that he makes a stink about these things? No, no. No. The practice. Yeah. My sense of humor's not working for you very well today, Patrick. I thought that was quite funny, actually. Oh. That also may be a standard for that CEO. Yeah. We'll see. Look, I think it's pretty clear we follow GAAP accounting. Yeah. The rules are pretty explicit. We generally run, I think as conservative as we can. I've dealt with level three assets when I was the CFO of Goldman Sachs. I relied on GAAP accounting. I think that's what the industry has to do. Fair enough. How we treat it. I'll leave that there. Moving to retail, the wealth channel's obviously a big part of your longer-term targets. You've made a lot of headlines by saying the product shouldn't be called semi-liquid. I was early to that. I don't really need a lot of positive feedback, but on that, I was early. Should've put an op ed out. I will give you that. Should've put an op-ed out. It's clearly. Missed opportunity. Clearly been the epicenter of the press hysteria this year. How have your conversations with distributors evolved? Any change you sense through all of this? Has the noise changed your enthusiasm for the opportunity at all? I spend a lot of time with advisors. It was a strategic choice of mine to do that when I first showed up at the firm because I didn't really understand that part of the industry, and I felt I needed to be much more educated. The only way I could really do that, obviously, other than working with my teams, was to actually spend time with advisors. What I mean by that is really in the room with advisors, trying to understand how they thought about the world, what things were important to them. What I'll tell you about the advisors and the platforms we deal with is they are incredibly sophisticated. As sophisticated as any institutional platform manager we deal with. I've sat in rooms in Texas where I met with a group of people, and it was fascinating to me. This was very early on in my tenure at Carlyle. One of them said, "I'll never do private equity. I'll never do real estate. I like secondaries, I like credit. I was like, "Okay, why?" He said, "Well, that fits my client base." This is really fundamentally the key, which is you're dealing with very smart advisors who are thinking through the portfolio allocation of their clients. Okay? I think that when you talk to advisors, they're very relaxed about this. When you talk to their home offices, they're very relaxed about this. I think their view of this is really consistent with ours, which is that probably for credit for a little while, until we get past this question on does software lead to defaults, and what are the headlines associated around it, I think credit's slow for a while. I think it's slow for the industry for a while. I think names that have been doing this for a long time that have the right solution set, which I'll come back to in a second, I think do very well in the long run. I think for other asset classes, for us so far, no material change. Doesn't mean that can't happen. I think it's been like a global education. If for some reason you weren't aware that these funds could have periods where they redeem up to the limit that they're allowed to redeem, and they cap it at the 5% or whatever the number is, everyone's aware now. Which actually is a very good thing. There's no confusion in the universe. Like how many articles have been written about this? Yeah. I've never seen so many articles desirous of a systemic event that's just not getting it. Like, how long do we wait for it not to be systemic? Yeah. We'll see. I do think a lot of it will hinge around software. The way we have approached wealth, I think the team has done an amazingly thoughtful job around this, is we like diversification. If you take a look at, for example, CTAC, which is our wealth interval fund, I think there's 900 different credits in that. We don't want to be overweight one particular sector. We don't want to be in a situation where a sector could have liquidity challenges, like one very narrowly defined sector. That can be problematic because, of course, in a world with disruption, they could be great assets one day, and then three years later you could have a situation like a Escapist. Anyway, so we've been very thoughtful how the team has launched these vehicles over the last couple of years in our private equity vehicle. Even that has, I think, a 20% component of Carlyle AlpInvest because it actually adds to the liquidity function and the diversification. That's our approach to this. We're hugely committed to this. I think the wealth channel will systematically grow, but it's not going to be up and to the right like it was directionally, certainly for certain sectors. I think what's next and super interesting is what happens in retirement. We'll see the final rules on retirement. I think these asset classes make perfect sense in retirement. Pension funds across the United States have been managing 60/40 allocations to private and public capital for decades with huge success. I think it's the perfect channel for all the kind of assets that we have at Carlyle. We hired a triple black belt to head our retirement practice. Some of you may have seen, we were selected by AllianceBernstein to be in a partnership with them. That's our first foray into this in terms of a partnership. I don't think that's going to be explosive. I don't think it should be explosive. I think you're going to see steady adoption. When I think about the channel mix, in terms of how we view the firm, I don't want to be overweight any one particular channel, and I don't want to be overweight any one particular geography. I have no favorite kids. I love my wealth clients, I love my future retirement clients, I like my current retirement clients, I love my pension funds. I love my sovereign wealth funds. I love my insurance companies. Ideally, I could construct some efficient frontier around that yielded the best optimal results in terms of performance and continuity of fundraising, which I think we've demonstrated. Last year the wealth funds were 15% of all the capital we raised. That's from a standing start of almost nothing a two years ago. That speaks to the team and the brand. They've done an amazing job. I think in the model we put out, or I should say I think the model we put out with the $200 billion of super cycle flows, it rose to 20%. That included nothing for retirement, nothing marginal for insurance. We don't have an insurance and annuity solution. There's none of that in the model, but I consider that a wealth retail product. There's lots of optionality for us in terms of how we use the brand and the platform. I think the sector will systematically grow, but I don't think it'll grow straight up and to the right. It probably shouldn't have. Thank you for remembering that I said that a couple of years ago about it shouldn't be semi-liquid, should be sometimes not liquid at all. I should have written an op-ed, though. Really annoying. On insurance, last year your results were held by two big block transactions at your insurance affiliate. Maybe update us on the growth outlook for that side of the business, to what extent we can expect or there's a pipeline of more chunky transactions like that. This is where I think the investor community probably doesn't value that relationship properly, but I totally get it. Okay. It's a very hard thing for you because if you and I have a conversation around insurance, you'll say to me, "Hey, what are the flows this year? I get it. You want to be able to model those flows and we're in the block business, so it feels more opportunistic. It is because it's based on the pipeline, whereas if I was an annuity writer, I would say, "Okay, this year we're going to write $20 billion, $30 billion, $10 billion," and you can model that. I think that is completely understandable, by the way. The way we approached the three-year plan was we said, Okay, listen, too hard for us to predict with certainty what the block business will yield, so we didn't really include it. Where we just said, "Okay, that can just be optionality," which is better for your modeling, because it just gives you upside. Also, I think a reasonable way for us to think of a three-year core plan. The pipeline, I think for blocks looks pretty good over the next several years. Competition got very fierce sort of middle of last year, second half of last year. It could get fierce again, where we really kind of felt like people were mispricing the risk. There's a little bit sometimes of mispricing the risk because they're just chasing the asset flows. Kind of felt like, to me at least, like we're past that point of, I would say, mispricing just to get assets. Like, we won't do that. The team is quite good. The real flywheel effect of that, of course, The team who created that, going back to 2020, what it's done is it's created the internal IQ and intelligence to build our asset-backed business. You saw we just launched our first institutional asset-backed evergreen fund. That, again, is a team that has grown alongside Fortitude. We understand the asset-backed business, and we understand what insurance clients need. I think it's a pretty steady growth area for us, Fortitude and the insurance clients globally. Again, of the breadth of the platform, because we can do asset-backed, we can do direct lending, we can do opportunistic credit, we can do secondaries, we can do primary. These are all things that insurance companies want, because there's a lot of competition to optimize capital and to optimize asset performance in insurance companies globally. I feel good about the entire sector, and I feel good about Fortitude. I think they're doing a nice job and a disciplined job. Let's move to taking everything we've talked about together, the fundraising and growth outlook. You stuck with mid to high single digit 2026 FRE guidance on the 1Q call, which is above the 1Q runway. What are the specific building blocks that you see driving the catch-up to get to that guide through the remainder of the year? I feel pretty comfortable about that guide still. Nothing's changed since the call. I think that'll be fine. I think it gets more exciting for all of you when we come into the end of this year 2027, 2028, when we come into the super cycle, and that's where you see management fees really pick up momentum. Yeah. Of course, you'll see the flywheel effect of capital markets. I think all this business development and business growth now, the linkage between all that and actually having a capital markets business, I think the year I showed up, the capital markets business was like a $50 million business. I think you'll see sequential growth on that. Again, we're not using our balance sheet to compete in that space. What you're talking about is super high-quality revenue that really is just, again, the function of the flywheel and the growth of the business. You'll see that in our new U.S. buyout fund. You'll see it in the European tech fund that we launch. You'll see it in CCOF, which we'll launch. You'll see it in the Japanese fund, which we'll launch. You'll see all the flagship funds. You'll see AlpInvest come back to the market again. You'll see all the effect of that really across the platform. I feel good about the plan. Again, the plan was structured in a way that we could galvanize everyone in the firm strategically around it. We wanted it to be achievable, and yeah, we want to beat the plan. That's how we structured it. Staying on this topic, how are fundraising conversations with institutional LPs evolving through all the volatility, particularly Middle Eastern clients, and are you noticing any meaningful shift in allocation priorities? Well, first of all, in the Middle East, I got to say the resilience that our Middle East partners show is remarkable. Yeah. I'm on conference calls in the morning with people, and missiles are going over their heads, and they're talking about allocating to our funds. I don't even quite understand it. If the weather's a little too hot or a little too cold in New York, we all have a meltdown. I think the resilience is incredible, and obviously, we should all take a moment to hope for the safe return of all of our men and women that are over there representing the United States right now. The long term, I think no impact. I think short term, you could see some capital obviously have to be redeployed, but these are incredibly well-run professional institutions. The momentum in terms of fundraising, if anything, all these issues around the world, collectively, if you want to look for a negative, I would say if there's a negative, it's not clear to me there is yet, that it delays fundraising a bit for the industry. It actually contributes to a lot of the deployment of capital over time. All this rebuilding around the world, all the focus on supply chains, everything everybody wants to do is just going to accelerate as we get past some of these challenges. No material change, just it's so impressive how they operate through this period. I actually don't think. Maybe all of you could. I don't think I could do it. I don't think I could be on a conference call and be like, "Hey, did you know a missile went over my kid's school?" I don't really understand how they do it. Any shift in kind of the traditional U.S. space in terms of what they're looking at or changes in allocation priorities? No, but I will say, I'm super grateful to be at Carlyle. One of the things that is extraordinary about the platform is the diversification of the platform. There are times when being a monoline is incredibly rewarding. Again, three years ago, what people were saying to me when they were giving me that feedback, Patrick, was, "Hey, you'd be better off to be a direct lending monoline. That's where the hot growth is. That was true. I don't know if that's where the hot growth is today. Not, okay? Today, what is most relevant for this environment for the foreseeable future is having a durable, diversified asset footing. We have that because we have Carlyle AlpInvest, which is a solution provider to GPs all over the world and LPs all over the world who actually want to modify their portfolios. The flip side of that barbell is our core private equity business. It's no surprise that the core private equity business over the last couple of years has been more challenged because capital has flown less there. Carlyle AlpInvest has exploded. That's a little bit unfair to the teams because the private equity team has done an extraordinary job, and the Carlyle AlpInvest team has done an extraordinary job, so they're both capturing their opportunity set. If you actually look at it, I think the firm is performing in a way you would want it to perform or expect it to perform, which is AlpInvest is growing, credit is growing, private equity's been slower and flatter. We'll go through a period where we think private equity's going to grow, but I don't think we're going to see any deterioration in the growth of the other two verticals. We have the diversity of the platform. We have the global footprint, and that's why we feel confident about the next couple of years and this year. We'll leave it there. Thank you very much. Great, Patrick. Yeah. Great to see everybody. Thanks so much.