Carlyle Group Inc. (CG) stock intrinsic value fair value estimate & owner earnings analysis

The Carlyle Group is a global alternative asset manager. It earns recurring management fees on capital that investors commit to its private equity, credit and investment solutions funds, and it earns performance fees (carried interest) when those funds sell investments at a profit. Across its segments, fee-earning assets under management were roughly $337 billion at the end of 2025 (about $304 billion a year earlier), including $110.9 billion of perpetual capital that has no fixed end date. The company's own measure of fee-related earnings rose from $1,104.6 million to $1,236.2 million in 2025. How we measured earnings. Carlyle's reported consolidated operating cash flow was negative $3,275.5 million in 2025 because it consolidates certain funds and CLOs; their investment purchases run through operating cash flow and are funded by borrowings shown in financing. That is not Carlyle's own cash generation, so we used the company's disclosed cash flow excluding those consolidated funds ($1,088.6 million in 2025). From that we subtracted working-capital swings, equity-based compensation as a real cost ($374.7 million in 2025, up from $154.0 million in 2022), and maintenance capital spending. Owner earnings per share were about $1.03 in 2020, $4.50 in 2021, $2.50 in 2022, $1.94 in 2023, $1.63 in 2024 and $0.99 in 2025. Earlier years were a partnership with a different unit structure and are not comparable. 2021 was a peak year for realized performance fees; it is included in the record but the median ($1.78 per share) limits its weight. On the trend: owner earnings fell 39% in 2025. Most of that is not weaker operations: Carlyle's own operating cash flow was flat ($1,088.6 million versus $1,088.9 million) while our deductions rose because a working-capital build of $248.9 million was removed and stock compensation was higher. Fee-related earnings grew 12%. We therefore start from the $1.78 median rather than the 2025 low, but we do not credit any growth on top of it. Base case ($29.7 per share): owner earnings stay at about $1.78 per share indefinitely. The evidence is the contractual fee base, including perpetual capital, long-dated funds, and a record of raising successor funds. We credit no growth, because future fundraising and asset growth are not contracted, and we do not count on performance fees rising above the multi-year median. Bear case ($10.6 per share): owner earnings stay at the 2025 low of about $0.99 for ten years, then decline about 10% a year as older funds run off and the franchise loses ground. Stock compensation, which has more than doubled since 2022, is the disclosed cost pressure behind this case. Carlyle carries about $2.7 billion of senior and subordinated notes, including $800 million of 5.050% notes issued in September 2025; interest is already deducted in our cash figures, and refinancing at higher rates is part of this case. Bull case ($46.4 per share): owner earnings return to about $2.20 per share, in line with 2022-2023, and grow 3% a year for ten years, supported by fee-earning assets that grew about 10% in 2025, then level off. What would make this wrong: sustained fundraising shortfalls, persistently high stock compensation, or a long stretch of few asset sales that keeps performance fees low. The latest filing we reviewed in detail is the 2025 annual report; we did not review the second-quarter 2026 report, and its consolidated cash flow is distorted by the same consolidated-fund effect. The company's own cash-flow measures could not be fully reconciled to our approach line by line, so the working-capital grouping is our judgement.