Carlyle Group

None of the warning signs we check for were found.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 27 Feb 2026, plus the 10-Q filed 10 Aug 2026 and 4 later 8-Ks.

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• Regulatory initiatives in jurisdictions outside the United States could adversely affect our business.

  Could happen

  UK Anti-Fraud Laws . The UK’s Economic Crime and Corporate Transparency Act 2023 (“ECCTA”) has created a new offense of “failure to prevent fraud” (“FTPF”), which came into effect on September 1, 2025. This new offense is broadly modeled on existing offenses for “failure to prevent bribery” and “failure to prevent the facilitation of tax evasion.” The FTPF offense imposes criminal liability on bodies corporate and partnerships meeting specified size thresholds (i.e. “large organizations”) where an “associate” (i.e., employee, agent, subsidiary undertaking, or person who provides services for or on behalf of the organization) commits a UK fraud offense. The relevant body will have a defense where it has in place reasonable fraud prevention policies and procedures (or if it was not reasonable to expect the body to have any prevention procedures in place). ECCTA uses complex definitions and, as such, certain of our fund structures and portfolio companies could be in scope.

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

  Could happen

  Over the twelve months ending on December 31, 2025, the S&P 500 rose by 16.4% , while the MSCI All Country World Index (MSCI ACWI) increased by 20.6% . This robust full-year performance masks interim volatility and fragile underlying public equity market dynamics. After the April 2nd “Liberation Day” tariff announcements in the United States, the S&P 500 fell by over 12% peak-to-trough in the six days that followed. The market rebounded strongly in the weeks that followed and regained its prior peak by mid-summer. In the process of this rebound, both the S&P 500 and global indices have become ever more concentrated in a handful of AI-related or AI-adjacent stocks. The top ten largest stocks now account for over 40% of the market capitalization of the S&P 500, and eight of those ten companies are exposed to roughly the same AI risks. A change in the outlook for AI-related company earnings, or a reassessment of these companies’ valuations, could drive significant market movements. Overall, factors that impact global markets, including growth expectations, inflation, interest rates, trade barriers such as tariffs, regulatory, and political environments, can be unpredictable and investor sentiment could change quickly in the future, while market volatility could accelerate in the face of negative macro, monetary, or geopolitical developments. If global markets become unstable, it is possible sellers of assets may readjust their valuations and attractive investment opportunities may become available. On the other hand, the valuations of certain assets we planned to sell in the near future could be negatively impacted, as well as the valuations of our portfolio companies and, as a result, our accrued performance revenues.

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• Our real estate funds are subject to risks inherent in the ownership and operation of real estate and the construction and

  Could happen

  Moreover, there is increased political attention at the state and national level on home ownership and housing affordability. In this regard, the U.S. government, and the governments of several U.S. states, are evaluating, implementing, and/or have implemented measures to regulate institutional and corporate investment in and ownership of residential property and it is expected that other similar actions may be taken by the states or other levels of government and that additional federal level actions could be taken in this regard (collectively, “Residential Ownership Laws”). For example, on January 20, 2026, the U.S. President issued Executive Order 14376, which sets forth a policy that large institutional investors not buy single-family homes that could otherwise be purchased by families, and directs or requests various administrative, rulemaking, and legislative processes be initiated to effectuate such policy. These Residential Ownership Laws could have a negative impact on a fund’s ability to implement its investment approach and achieve its objective, including with respect to certain categories of residential property or within certain U.S. states implementing such laws.

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• The asset management business is intensely competitive.

  We also may lose investment opportunities in the future if we do not match investment prices, structures, products, or terms offered by competitors. Alternatively, we may experience decreased rates of return and increased risks of loss if we match investment prices, structures, products, and terms offered by competitors. Moreover, if we are forced to compete with other asset managers on the basis of price, we may not be able to maintain our current fund fee and carried interest terms. We have historically competed primarily on the performance of our funds, and not on the level of our fees or carried interest relative to those of our competitors. However, there is a risk that fees and carried interest in the investment management industry will decline, without regard to the historical performance of a manager. In addition, as part of a shift in the distribution arrangements in the private wealth industry, certain third-party intermediaries have sought to revise existing, or implement new, fee arrangements that align their fees with the initial amount or ongoing net asset value of capital invested through the intermediary in the applicable vehicle. While the extent of this shift going forward is uncertain, the costs associated with the distribution of certain of our private wealth products have increased, and there may be further increases in distribution costs for these and future products. The reduction of net management fees or performance allocations we receive, including as a result of new fee arrangements, or the incurrence of higher costs in connection with product distribution, without corresponding decreases in our cost structure, would adversely affect the profitability of impacted products. Certain of the third-party intermediaries on whom we rely to distribute our investment products also sell their own competing proprietary investment products, which could limit the distribution of our products.

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• Regulatory initiatives in jurisdictions outside the United States could adversely affect our business.

  Could happen

  EU Market Integration Package . On December 4, 2025, the European Commission published a set of wide-ranging legislative proposals which have collectively been labelled the “Market Integration Package” or “MIP.” The MIP proposals have the overall objective of further integrating EU financial markets by breaking down barriers to cross-border business. In addition, the MIP proposals set out to amend (amongst other legislation) AIFMD and the CBDF Directive and the CBDF Regulation. The MIP proposals are also aimed at harmonizing key obligations that affect market participants operating in the EU, including marketing and pre-marketing, cross border management of AIFs, delegation and operating requirements, and investor disclosures and reporting. Although the MIP proposals are intended to reduce complexity, they could have an impact on the operating requirements of EU AIFMs, including CIM Europe and AlpInvest BV, with respect to potential rules of conduct and prudential rules, which if implemented in their current form, could increase our compliance costs in future. The MIP proposals are expected to come into effect, at the earliest, in the second half of 2027.

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