What the changes say
- New EU and UK rules add compliance, fraud-prevention, securitization, and market-integration risks for Carlyle and its funds.
- Carlyle highlights expanding non-U.S. individual distribution, fund conflicts, AlpInvest information barriers, and forced investment disposals.
- Pandemic, Basel, MiFID II, infrastructure, and controlling-stockholder risks were removed, while energy, tax, trade, and dilution risks were refined.
What changed since the prior 10-K
New
- NewRisks Related to Our Company
Moreover, during adverse economic and market conditions, we may not be able to renew or refinance all or part of our credit facility or find alternate financing on commercially reasonable terms. As a result, our uses of cash may exceed our sources of cash, thereby potentially affecting our liquidity position
Credit-facility refinancing could become unavailable during market stress, while severe public-health events could disrupt employees, operations, markets, supply chains, and inflation.
- NewRisks Related to Regulation and Litigation
Rapidly developing and changing global data security and privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage
Evolving global data-security and privacy rules could raise compliance costs, trigger enforcement or third-party liability, disrupt operations, and damage Carlyle’s reputation.
- NewRisks Related to Regulation and Litigation
EU Market Integration Package
The proposed EU Market Integration Package could change AIFMD, cross-border distribution, delegation, conduct, prudential, and disclosure requirements and increase future compliance costs.
- NewRisks Related to Regulation and Litigation
UK Anti-Fraud Laws
UK failure-to-prevent-fraud rules could impose criminal liability on Carlyle fund structures or portfolio companies if associates commit covered fraud.
- NewRisks Related to Regulation and Litigation
We continue to consider the potential impact of FTPF on our business and policies and procedures via our periodic risk assessment processes
European and UK securitization rules could require 5% risk retention, depress fund asset values, force sales, and increase CLO operating costs.
- NewRisks Related to Regulation and Litigation
Moreover, the perception of noncompliance with such requirements or policies could harm our reputation with fund investors
Investing across Carlyle funds’ debt and equity positions, using affiliates as service providers, or holding material non-public information could create conflicts.
- NewRisks Related to the Assets We Manage
Moreover, there is uncertainty as to further actions that may be taken under the current U.S. Presidential administration with respect to U.S. trade policy, including with respect to tariffs on goods from Canada and Mexico, among other countries
Changing U.S. tariffs and retaliatory trade measures could hurt portfolio companies, while weak third-party fundraising could reduce Carlyle’s management fees and carried interest.
- NewRisks Related to the Assets We Manage
Such allegations or actions may be with respect to, among other things, product suitability, distributor eligibility, investor classification, compliance with securities laws, conflicts of interest, and the adequacy of disclosure to investors to whom our products are distributed through those channels
Expanding products to individual investors outside the United States creates jurisdiction-specific distribution, structure, suitability, disclosure, litigation, regulatory, and operating risks.
- NewRisks Related to the Assets We Manage
Our funds may be forced to dispose of investments at a disadvantageous time
Fund term expirations may force Carlyle to sell or distribute investments at unfavorable times, reducing returns to funds and investors.
- NewRisks Related to the Assets We Manage
Our Carlyle AlpInvest business is subject to additional risks
AlpInvest’s information wall can limit collaboration between investment professionals and impair Carlyle’s ability to provide services across business segments.
- NewRisks Related to Our Common Stock
Subject, in some cases, to compliance with our insider trading policy, minimum retained ownership requirements, transfer restrictions, and limitations applicable to affiliates under Rule 144 of the Securities Act, all of these shares are freely tradable
Former Private Unitholders can sell common shares more easily and quickly after conversion, potentially increasing market supply, depressing the stock price, and diluting shareholders.
- NewRisks Related to Our Common Stock
Anti-takeover provisions in our organizational documents could delay or prevent a change in control
Carlyle’s charter and bylaws could delay or prevent favorable acquisitions through preferred-stock issuance, voting restrictions, meeting limits, and supermajority requirements.
- NewRisks Related to Taxation
In addition, failure to properly manage these obligations could expose us to penalties, additional assessments, or other regulatory consequences
Dropped
- DroppedRisks Related to Regulation and Litigation
Laws and regulations relating to privacy, data protection, data transfers, data localization, and data security worldwide may limit the use and adoption of our services and adversely affect our business
- DroppedRisks Related to Regulation and Litigation
For example, the Hong Kong Personal Data (Privacy) Ordinance, the Australian Privacy Act, and the Brazilian Bank Secrecy Law
- DroppedRisks Related to Regulation and Litigation
The short-term and long-term impact of the Basel capital standards remains uncertain
- DroppedRisks Related to Regulation and Litigation
Certain requirements of MiFID II also apply to AIFMs with a MiFID “top-up” permission, such as AlpInvest
- DroppedRisks Related to Regulation and Litigation
Another pandemic or global health crisis like the COVID-19 pandemic may adversely impact our performance and results of operations
- DroppedRisks Related to the Assets We Manage
Contingent liabilities could harm fund performance
- DroppedRisks Related to the Assets We Manage
Investments in structured finance securities may also be subject to liquidity risk
- DroppedRisks Related to the Assets We Manage
Our Global Investment Solutions business is subject to additional risks
- DroppedRisks Related to the Assets We Manage
Delays in the completion of any energy or power project may result in lost revenues or increased expenses, including higher operation and maintenance costs related to such portfolio company
Worldwide privacy, data-protection, transfer, localization, and security rules could restrict services and harm Carlyle’s business.
- DroppedRisks Related to the Assets We Manage
Moreover, once infrastructure assets of investments become operational, they may face competition from other infrastructure assets in the vicinity of the assets they operate, the presence of which depends in part on governmental plans and policies, over which we have no control
Examples and expanding extraterritorial privacy requirements, including Hong Kong, Australia, and Brazil, could increase compliance obligations.
- DroppedRisks Related to Our Common Stock
Carlyle Group Management L.L.C. has significant influence over us and its interests may conflict with ours or yours
- DroppedRisks Related to Our Common Stock
Anti-takeover provisions in our organizational documents and Delaware law may discourage or delay acquisition attempts for us that stockholders might consider favorable
Reworded
- 100% rewrittenRisks Related to the Assets We Manage
Our natural resources, infrastructure, energy, power, and renewables investments involve significant construction, operational, regulatory, environmental, and market risks, any of which could materially affect performance and value
Natural-resources risks now specify shortages, cost overruns, permitting delays, financing gaps, operating deficits, lost revenues, and construction claims.
Was: Investments in the natural resources industry, including the infrastructure, energy, power, and renewables industries, involve various operational, construction, and regulatory risks
- 99% rewrittenRisks Related to the Assets We Manage
Energy and Power
Energy and power risks now add climate-driven demand shifts and detailed development-stage risks involving zoning, approvals, construction, and financing.
- 94% rewrittenRisks Related to the Assets We Manage
The due diligence process that we undertake in connection with investments by our funds may not reveal all facts that may be relevant in connection with an investment
Investment diligence now expressly covers credit risk, macroeconomic trends, sustainability topics, human rights, pollution, health and safety, and bribery.
Was: The due diligence process that we undertake in connection with investments by our investment funds may not reveal all facts that may be relevant in connection with an investment
- 93% rewrittenRisks Related to the Assets We Manage
Our energy business is involved in oil and gas investments (i.e, exploration, production, storage, transportation, logistics, refining, marketing, trading, petrochemicals, energy services, and other opportunistic investments), which entail a high degree of risk
The energy-risk description now covers broader oil-and-gas activities, climate-driven demand shifts, climate-change contributions, and regulatory and stakeholder scrutiny.
- 90% rewrittenRisks Related to Taxation
Our effective tax rate and tax liability is based on the application of current income tax laws, regulations, and treaties
Tax risk now adds uncertain tax positions, possible retrospective tax-law changes, and challenges across jurisdictions where Carlyle operates, advises, promotes, or invests.
- 90% rewrittenRisks Related to Our Common Stock
The market price of our common stock may decline due to the large number of shares of stock eligible for future sale
The stock-sale risk retains the potential price decline but removes specific discussion of freely tradable shares, registration rights, and issuance timing.
Was: The market price of our common stock may decline due to the large number of shares of common stock eligible for future sale
- 90% rewrittenRisks Related to Regulation and Litigation
CBDF Directive and CBDF Regulation
CBDF requirements now state that AlpInvest BV is covered and that some EEA jurisdictions may accept non-EU pre-marketing notifications.
- 87% rewrittenRisks Related to the Assets We Manage
Trade negotiations and related government actions may create regulatory uncertainty for our funds’ portfolio companies and our investment strategies and adversely affect the profitability of our funds’ portfolio companies
Trade risk now specifically identifies possible higher tariffs on goods from China, Canada, Mexico, and Europe, alongside universal and reciprocal tariffs.
- 83% rewrittenRisks Related to the Assets We Manage
Industry Risks Related to the Assets We Manage Our real estate funds are subject to risks inherent in the ownership and operation of real estate and the construction and development of real estate
- 83% rewrittenRisks Related to Regulation and Litigation
Swiss Marketing Regulations
- 79% rewrittenRisks Related to Our Common Stock
The consolidation of investment funds, holding companies, or operating businesses of our portfolio companies could make it more difficult to understand the operating performance of the Company and could create operational risks for the Company
- 66% rewrittenRisks Related to Regulation and Litigation
ESG and Sustainable Finance Regulation
- 61% rewrittenRisks Related to Regulation and Litigation
Our failure to deal appropriately with conflicts of interest in our investment business could damage our reputation and adversely affect our businesses
- 60% rewrittenRisks Related to the Assets We Manage
Our CLO business and investment into CLOs involves certain risks
- 55% rewrittenRisks Related to the Assets We Manage
Our funds make investments in companies that are based outside of the United States, which may expose us to additional risks not typically associated with investing in companies that are based in the United States
- 50% rewrittenRisks Related to Regulation and Litigation
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), enacted in 2010, has imposed significant changes on almost every aspect of the U.S. financial services industry, including aspects of our business
- 49% rewrittenRisks Related to Regulation and Litigation
Our affiliated subsidiaries serve as the general partners of many of our managed funds and could have liability for certain fund obligations
- 49% rewrittenRisks Related to the Assets We Manage
The asset management business is intensely competitive
- 49% rewrittenRisks Related to Regulation and Litigation
The current regulatory environment in the United States may be impacted by future legislative developments
- 46% rewrittenRisks Related to Regulation and Litigation
Extensive regulation of our business affects our activities and creates the potential for significant liabilities and penalties, and could result in additional burdens on our business
- 45% rewrittenRisks Related to the Assets We Manage
Our funds’ investments in the life sciences industry may expose us to increased risks
Was: Our investments in the life sciences industry may expose us to increased risks
- 45% rewrittenRisks Related to the Assets We Manage—Our investors may negotiate to pay us lower management fees and the economic
Recruiting and retaining our professionals has become more difficult and may continue to be difficult in the future, which could adversely affect our business, results of operations, and financial condition
- 43% rewrittenRisks Related to Regulation and Litigation
Laws and regulations on foreign direct investment applicable to us and our funds’ portfolio companies, both within and outside the United States, may make it more difficult for us to deploy capital in certain jurisdictions or to sell assets to certain buyers
- 40% rewrittenRisks Related to the Assets We Manage
Our relationship with Fortitude may not generate a meaningful contribution to our revenue and our indirect ownership of Fortitude could give rise to real or apparent conflicts of interest
- 40% rewrittenRisks Related to the Assets We Manage
The aviation leasing industry is subject to significant volatility and may expose us to additional risks
- 38% rewrittenRisks Related to Our Company
Our revenue, earnings, net income, and cash flow can all vary materially due to our reliance on performance revenues
- 37% rewrittenRisks Related to the Assets We Manage
Our private equity funds’ performance, and our performance, has been and may in the future be adversely affected by the financial performance of our portfolio companies and the industries in which our funds invest
- 36% rewrittenRisks Related to the Assets We Manage
We have increasingly undertaken business initiatives to increase the number and type of investment products we offer to individual investors, which could expose us to new and greater levels of risk
Was: We have increasingly undertaken business initiatives to increase the number and type of investment products we offer to retail investors, which could expose us to new and greater levels of risk
- 31% rewrittenRisks Related to Our Company
The current U.S. political environment and the resulting uncertainties regarding actual and potential shifts in U.S
- 28% rewrittenRisks Related to the Assets We Manage
We may need to pay “giveback” obligations if and when they are triggered under the governing agreements with our investors
- 28% rewrittenRisks Related to Regulation and Litigation
Appointed Representative Arrangements
- 26% rewrittenRisks Related to Regulation and Litigation
Regulatory initiatives in jurisdictions outside the United States could adversely affect our business
- 24% rewrittenRisks Related to Our Common Stock
Our amended and restated certificate of incorporation does not limit the ability of our former general partner, co-founders, directors, officers, or stockholders to compete with us
- 22% rewrittenRisks Related to Our Company
Our use of leverage may expose us to substantial risks
- 21% rewrittenRisks Related to the Assets We Manage—Our investors may negotiate to pay us lower management fees and the economic
Use of artificial intelligence technology by us could lead to the exposure of our data or other adverse effects and increase competitive, operational, legal, and regulatory risks in ways that we cannot predict
- 21% rewrittenRisks Related to Our Common Stock
Certain of our co-founders have the right to designate members of our Board of Directors
Was: Our co-founders have the right to designate members of our Board of Directors
All 82 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Company
- 01The current U.S. political environment and the resulting uncertainties regarding actual and potential shifts in U.S31% rewritten
- 02Moreover, during adverse economic and market conditions, we may not be able to renew or refinance all or part of our credit facility or find alternate financing on commercially reasonable terms. As a result, our uses of cash may exceed our sources of cash, thereby potentially affecting our liquidity positionNew
- 03Our use of leverage may expose us to substantial risks22% rewritten
- 04Our revenue, earnings, net income, and cash flow can all vary materially due to our reliance on performance revenues38% rewritten
Risks Related to the Assets We Manage—Our investors may negotiate to pay us lower management fees and the economic
- 05We depend on the efforts, skill, reputations, and business contacts of our Chief Executive Officer, Harvey M
- 06Recruiting and retaining our professionals has become more difficult and may continue to be difficult in the future, which could adversely affect our business, results of operations, and financial condition45% rewritten
- 07We may expand into new investment strategies, geographic markets, businesses, and types of investors, or seek to expand our business or change our strategic focus with new strategic initiatives, which may result in additional risks and uncertainties in our businesses
- 08Failure to maintain the security of our information and technology networks, including personally identifiable information, intellectual property, and proprietary business information, could have a material adverse effect on us
- 09Use of artificial intelligence technology by us could lead to the exposure of our data or other adverse effects and increase competitive, operational, legal, and regulatory risks in ways that we cannot predict21% rewritten
Risks Related to Regulation and Litigation
- 10Rapidly developing and changing global data security and privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damageNew
- 11Extensive regulation of our business affects our activities and creates the potential for significant liabilities and penalties, and could result in additional burdens on our business46% rewritten
- 12The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), enacted in 2010, has imposed significant changes on almost every aspect of the U.S. financial services industry, including aspects of our business50% rewritten
- 13The current regulatory environment in the United States may be impacted by future legislative developments49% rewritten
- 14Regulatory initiatives in jurisdictions outside the United States could adversely affect our business26% rewritten
- 15CBDF Directive and CBDF Regulation90% rewritten
- 16EU Market Integration PackageNew
- 17Swiss Marketing Regulations83% rewritten
- 18UK Anti-Fraud LawsNew
- 19We continue to consider the potential impact of FTPF on our business and policies and procedures via our periodic risk assessment processesNew
- 20ESG and Sustainable Finance Regulation66% rewritten
- 21Appointed Representative Arrangements28% rewritten
- 22Hong Kong Security Law
- 23Other Similar Measures
- 24Laws and regulations on foreign direct investment applicable to us and our funds’ portfolio companies, both within and outside the United States, may make it more difficult for us to deploy capital in certain jurisdictions or to sell assets to certain buyers43% rewritten
- 25Increasing scrutiny from stakeholders on sustainability matters, including our ESG reporting, exposes us to reputational and other risks
- 26We are subject to substantial risk of litigation and regulatory proceedings and may face significant liabilities and damage to our reputation as a result of allegations of improper conduct and negative publicity
- 27Our affiliated subsidiaries serve as the general partners of many of our managed funds and could have liability for certain fund obligations49% rewritten
- 28Certain policies and procedures implemented to mitigate potential conflicts of interest and address certain regulatory requirements may reduce the synergies across our various businesses and inhibit our ability to maintain our collaborative culture
- 29Our failure to deal appropriately with conflicts of interest in our investment business could damage our reputation and adversely affect our businesses61% rewritten
- 30Moreover, the perception of noncompliance with such requirements or policies could harm our reputation with fund investorsNew
Risks Related to the Assets We Manage
- 31The asset management business is intensely competitive49% rewritten
- 32Poor performance of our investment funds would cause a decline in our revenue, income, and cash flow, may obligate us to repay carried interest previously paid to us, and could adversely affect our ability to raise capital for future funds
- 33The historical returns attributable to our funds, including those presented in this Annual Report on Form 10-K, should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in our common stock
- 34Risk management activities may adversely affect the return on our and our funds’ investments
- 35Trade negotiations and related government actions may create regulatory uncertainty for our funds’ portfolio companies and our investment strategies and adversely affect the profitability of our funds’ portfolio companies87% rewritten
- 36Moreover, there is uncertainty as to further actions that may be taken under the current U.S. Presidential administration with respect to U.S. trade policy, including with respect to tariffs on goods from Canada and Mexico, among other countriesNew
- 37We have increasingly undertaken business initiatives to increase the number and type of investment products we offer to individual investors, which could expose us to new and greater levels of risk36% rewritten
- 38Such allegations or actions may be with respect to, among other things, product suitability, distributor eligibility, investor classification, compliance with securities laws, conflicts of interest, and the adequacy of disclosure to investors to whom our products are distributed through those channelsNew
- 39Our investors may negotiate to pay us lower management fees and the economic terms of our future funds may be less favorable to us than those of our existing funds, which could adversely affect our revenues
- 40We may need to pay “giveback” obligations if and when they are triggered under the governing agreements with our investors28% rewritten
- 41Third-party investors in our investment funds with commitment-based structures may not satisfy their contractual obligation to fund capital calls when requested by us, which could adversely affect a fund’s operations and performance
- 42Valuation methodologies for certain assets in our funds can involve subjective judgments, and the fair value of assets established pursuant to such methodologies may be incorrect, which could result in the misstatement of fund performance and accrued performance allocations
- 43The due diligence process that we undertake in connection with investments by our funds may not reveal all facts that may be relevant in connection with an investment94% rewritten
- 44We may, from time to time, seek to engage in selective development or acquisition of asset management businesses or other businesses complementary to our business where we think we can add substantial value or generate substantial returns
- 45Dependence on significant leverage in investments by our funds could adversely affect our ability to achieve attractive rates of return on those investments
- 46Any of the foregoing circumstances could have a material adverse effect on our results of operations, financial condition, and cash flow
- 47Our asset management activities involve investments in relatively illiquid assets, and we may fail to realize any profits from these activities for a considerable period of time
- 48Our investment funds make investments in companies that we do not control
- 49Our investment funds may invest in assets denominated in currencies that differ from the currency in which the fund is denominated
- 50Our funds make investments in companies that are based outside of the United States, which may expose us to additional risks not typically associated with investing in companies that are based in the United States55% rewritten
- 51Our equity investments and some of our debt investments rank junior to investments made by others, exposing us to a greater risk of losing our investment
- 52Certain of our fund investments may be concentrated in particular asset types or geographic regions, which could exacerbate any negative performance of those funds to the extent those concentrated investments perform poorly
- 53Certain of our investment funds may invest in securities of companies that are experiencing significant financial or business difficulties, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Such investments are subject to a greater risk of poor performance or loss
- 54We are reliant on third-party service providers for certain aspects of our business and are subject to risks in using prime brokers, custodians, counterparties, administrators, and other agents
- 55Our results are highly dependent on our continued ability to generate attractive returns from our investments
- 56Our funds may be forced to dispose of investments at a disadvantageous timeNew
- 57Our private equity funds’ performance, and our performance, has been and may in the future be adversely affected by the financial performance of our portfolio companies and the industries in which our funds invest37% rewritten
- 58Our CLO business and investment into CLOs involves certain risks60% rewritten
- 59Underwriting, syndicating, and securities placement activities expose us to risks
- 60Our Carlyle AlpInvest business is subject to additional risksNew
- 61Industry Risks Related to the Assets We Manage Our real estate funds are subject to risks inherent in the ownership and operation of real estate and the construction and development of real estate83% rewritten
- 62Our energy business is involved in oil and gas investments (i.e, exploration, production, storage, transportation, logistics, refining, marketing, trading, petrochemicals, energy services, and other opportunistic investments), which entail a high degree of risk93% rewritten
- 63Our natural resources, infrastructure, energy, power, and renewables investments involve significant construction, operational, regulatory, environmental, and market risks, any of which could materially affect performance and value100% rewritten
- 64Energy and Power99% rewritten
- 65Climate change and regulatory and other efforts to reduce climate change could adversely affect our business
- 66Investments in the insurance industry (including our investment in Fortitude) could be adversely impacted by insurance regulations and potential regulatory reforms
- 67Our relationship with Fortitude may not generate a meaningful contribution to our revenue and our indirect ownership of Fortitude could give rise to real or apparent conflicts of interest40% rewritten
- 68Carlyle FRL owns a controlling interest in Fortitude and has the right to appoint a majority of its board of directors
- 69Our funds’ investments in the life sciences industry may expose us to increased risks45% rewritten
- 70The aviation leasing industry is subject to significant volatility and may expose us to additional risks40% rewritten
Risks Related to Our Common Stock
- 71The market price of our common stock may decline due to the large number of shares of stock eligible for future sale90% rewritten
- 72Subject, in some cases, to compliance with our insider trading policy, minimum retained ownership requirements, transfer restrictions, and limitations applicable to affiliates under Rule 144 of the Securities Act, all of these shares are freely tradableNew
- 73The market price and trading volume of our common stock has been and may continue to be volatile, which could cause the value of your investment to decline
- 74Certain of our co-founders have the right to designate members of our Board of Directors21% rewritten
- 75Our amended and restated certificate of incorporation does not limit the ability of our former general partner, co-founders, directors, officers, or stockholders to compete with us24% rewritten
- 76Anti-takeover provisions in our organizational documents could delay or prevent a change in controlNew
- 77The provision of our amended and restated certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against us and our directors, officers, and stockholders
- 78If The Carlyle Group Inc. were deemed to be an “investment company” under the Investment Company Act, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business
- 79The consolidation of investment funds, holding companies, or operating businesses of our portfolio companies could make it more difficult to understand the operating performance of the Company and could create operational risks for the Company79% rewritten
Risks Related to Taxation
- 80Our effective tax rate and tax liability is based on the application of current income tax laws, regulations, and treaties90% rewritten
- 81In addition, failure to properly manage these obligations could expose us to penalties, additional assessments, or other regulatory consequencesNew
- 82U.S. and foreign tax regulations could adversely affect our ability to raise funds from certain foreign investors and increase compliance costs
Other Carlyle Group 10-Ks
- FY2024 10-K risk factors81 risks
Carlyle’s results depend heavily on investment performance, realizations, fundraising, and carried-interest economics.
Filed Feb 27, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.