Good day, ladies and gentlemen, and welcome to The Carlyle Group’s Second Quarter 2017 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] I would now like to introduce your host for today’s conference, Head of Investor Relations, Mr. Daniel Harris. Sir, you may begin.

Thank you, James. Good morning and welcome to Carlyle’s second quarter 2017 earnings call. With me on the call today are our Co-Chief Executive Officers, David Rubenstein; Bill Conway; and our Chief Financial Officer, Curt Buser. Earlier this morning, we issued a press release and detailed earnings presentation with our second quarter results, a copy of which is available on our Investor Relations website. Following our remarks, we will hold a question-and-answer session for analysts and institutional investors. To ensure participation by all those on the call, please limit yourself to one question and return to the queue for any follow-ups. 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 reconciliations of these measures to GAAP in our earnings release. 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 identified in the Risk Factor 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. With that, let me turn it over to David for his remarks.

Thank you, Dan. We’re pleased to discuss our strong second quarter results, which we believe demonstrate the continued positive momentum in our business. Last quarter, Bill highlighted our firm’s four goals for this year and beyond. Continuing to invest wisely, raising $100 billion, building our global credit business and resolving some of the legacy issues that have negatively impacted some parts of our firm. In the second quarter, we made great progress against each of these goals. First, our investments created substantial value once again this quarter. We generated nearly $300 million in performance fees, driven by 5% appreciation across our carry funds, and our net accrued carry balance increased 9% to $1.6 billion. Second, we had an exceptional fundraising quarter with $8.4 billion raised in the second quarter and we have substantial fundraising momentum heading into the second-half of this year, when some of our large buyout funds, for which it is already clear there is robust interest, will be in the market. Third, in our global credit business, we made several key hires and raised funds, which will be quite helpful as we further develop and expand that business. And fourth, we have resolved our legacy commodities issues. Drilling down on each of these key themes. Similar to our results in the first quarter, the main story of this quarter was the continued impressive performance of our portfolio. Broad-based fund appreciation drove $300 million in second quarter economic net income. ENI was $0.81 per unit after-tax. In the first six months of this year, we generated $700 million in ENI, about the amount we created in all of 2015 and 2016 combined. Our net accrued carry balance grew by $131 million in the second quarter, notwithstanding $182 million in net performance fees realized during the quarter. In the…

Thank you, David. Last quarter, we reported our results shortly after a weak official U.S. GDP first quarter growth estimate of 0.7%. We noted that our proprietary portfolio data suggested a more robust growth than that reported by the commerce department. Subsequently, the official U.S. GDP first quarter report was revised upwards to a 1.4%, and the initial estimate of second quarter growth of 2.6% was recently announced. Today, we continue to see synchronized global growth led by industrial orders and manufacturing trade volumes. Globally, industrial orders appear to be growing at the fastest rate in six years, with particular strength evident in the euro zone and emerging Asia. The improved economic backdrop has been reflected in the performance of our more than 200 portfolio companies. Trend growth for both sales and earnings has averaged roughly 10% across our global portfolio. This in turn has led to rapid appreciation of our $64 billion portfolio at the existing corporate private equity, real asset and GMS carry fund investments. Our overall carry fund portfolio appreciated by 5% in the second quarter and has appreciated 11% in the first six months and 19% in the last 12 months. Our Corporate Private Equity segment appreciated even more 8% in the quarter, 18% for the first six months, and 23% over the past months. We saw particular strength in our industrial, healthcare and technology investments. We also produced significant appreciation in real estate and natural resources, both of which appreciated 6% in the quarter. Importantly, we realized the strongest depreciation in those funds that are already in carry. These include Carlyle Partners VI, Carlyle Asia Partners IV, Carlyle Realty Partners VII and NGP XI. In terms of new investments, we invested $3.4 billion for the quarter and have more than $6 billion in investments that…

Thank you, Bill. Our performance across the firm was solid once again and we are well-positioned for the future. For the first six months of this year, we generated economic net income of $700 million, or $1.90 per unit after-tax, over three times the per unit amount we earned in the first-half of 2016. Economic net income this quarter was up 90% from Q2 last year, with nearly $300 million generated in net performing fees, up 159% from the second quarter of last year. Year-to-date, 65% of our net performing fees were generated by funds that are still in our investment phase. In other words, these are relatively young funds. And as a fund, that will produce a substantial amount of our realized carry over the coming years. I would be remiss, as a CFO, if I did not remind everyone that ENI is inherently unpredictable due to the nature of mark-to-market accounting. Fee-related earnings were $6 million for the quarter after fundraising costs and the commodities charge. Fundraising costs were $15 million more than the first quarter of 2017 and the second quarter of 2016, due to the significant fundraising activity in the quarter. We expect elevated fundraising levels in the near-term and accordingly expect to see continued high-levels of fundraising costs. Raising large amounts of new capital will produce benefits for years to come, but we incur the costs immediately. This quarter’s fundraising was primarily accomplished to our internal team, our most economical way to raise capital. Future quarters maybe relatively more expensive as we augment our internal team with external fundraising efforts. Expenses this quarter were largely flat compared to the first quarter of 2017 and the second quarter of 2016, with the exception of fundraising costs and the commodities charge. Fundraising costs appear in the elevated…

In brief, we had a strong quarter by the metrics that we believe are important in measuring our success and our progress. And we feel that we are well-positioned to build further on our current base and to grow our global platform and our profitability. We’re now ready to take your questions.

Thank you. [Operator Instructions] Our first question comes from Craig Siegenthaler with Credit Suisse. Your line is open.

Good morning.

Good morning.

So I heard your comments you expect first closes in both U.S. and Asia buyout in the second-half. But just given the really strong fundraising environment that we’re seeing and I’m also looking at Apollo’s result this quarter, which had a very big Fund IX close in there. I’m just wondering, do you think we could have final closes in both U.S. and Asia buyout by December 31?

We don’t want to say exactly when the final close will be, we don’t know for sure. We have not historically done one and done kind of closings on these large buyout funds. But there’s no doubt that there’s an enormous amount of interest in it. And I don’t think that the fundraising for either of those funds will be very elongated compared to what we’ve had in the past.

Thank you.

Thank you. Our next question comes from Ken Worthington with JPMorgan. Your line is open.

Hi, good morning. As you think about expenses for both comp and G&A as we look forward in [indiscernible] excluding the fundraising costs, can you help us with an outlook, say, for the next couple of years? The investment teams, I think, are largely in place for your bigger funds that are fundraising. But as we think about costs, Carlyle has been sort of tightening the belt over the last couple of years. Does the big fundraising and the improved outlook for Fee-earning AUM sort of take some of the pressure off your cost containment? And how should we think about those expenses sort of stepping up or ramping up over the next couple of years?

Hey, Ken, it’s Curt. Hey, thanks for your question. Look, we’ve been very focused on cost control definitely over the last two years. And as you look at the numbers, especially as you exclude kind of one-time type charges, exclude the fundraising cost, but you can really see that the cost over that time period have either trended down or worst case kind of flat. So as we look forward, there’s two obvious places where obviously, we’re going to have expense pressure. One is the fundraising cost as we talked about, and the second, we’re going to continue to build out the credit business. And so as we build out the credit business, you’re going to see some costs coming in there, especially as we grow that. We think that that is really going to lay the groundwork for very good future FRE, but it’s going to take up sometime to get there. The other thing that I will say is, I do think, as we go through this fundraising process, I’m optimistic for the results of the fundraising. And I do think that you’re going to see some elevations and some growth in comp here and there, but it’s going to be very controlled and we’re going to be – we remain very cost conscious as we go through the next time period. I’m optimistic in terms of the fee-related earnings potential, especially as we get through this $100 billion fundraise.

Thank you. Our next question comes from Bill Katz with Citigroup. Your line is open.

Okay. Thank you very much for taking my questions and I really appreciate your good disclosures. So, David, in the past, you’ve talked about taking market share and the industry as a whole and Carlyle as well. Just wondered if you had some statistics at your hand that could talk to some of the cross-sell that you’re enjoying. So I’m curious of how much of these sort of stepped up mandates are coming from existing LP base versus maybe the ability to extend the franchise?

Okay. We have – most of our investor – we have such a large investor base that it’s likely that our new funds are going to see – most of those investors in those new funds coming from our existing fundraising base. However, in this quarter alone, we’ve got about 200 new investors in various funds. So we’re always looking for new investors. But if you take the sovereign wealth funds, for example, of the 25 largest sovereign wealth funds, of the 23 of them that invest in alternative assets or private equity, I think, we’ve got 22 or 23 of them. So it’s hard to get a lot of new investors, I’d say, for example, in that space. The same would be true in most of a large U.S. public pension funds, we have a very, very large share of them. However, we’re always looking for new investors and we’re always traveling the world for them. I would say right now, we have a pretty happy investor base. And we’re finding that, what I’ll call, the cross-sell does sort of work and that was the premise of much of what we did when we built the firm, which is to say, if you like Carlyle on Fund I, you might fund area A, you might like Carlyle in fund area B. And so, we find now, for example, that 60% of our funds have investors that are, I think, the statistic is that, 60% of our investors are in six or more of our funds, and about 10% of our investors are in 20 or more of our funds, they’re very loyal. So there are very few investors we have now who are only in one fund. And so the most effective way to get an investor into a fund is to get an existing investor, it’s a lot less expensive to get an existing investor than a new investor. But we are still trying to find new investors. And I’d say, just for the quarter, I think about 230 individual or organization new investors came into our various funds.

Thank you. Our next question comes from Patrick Davitt with Autonomous Research. Your line is open.

Good morning. Thanks. So you’ve seen a pickup in fairly sizable realization announcements, and obviously, I think you have another part of PPD coming through. So could you frame maybe a range or size of expected cash carry from these pretty lumpy deals most notably, I guess, PPD, Nature’s Bounty, and EPIC this week?

Patrick, it’s Curt. Hey, thanks for your question. The – what we don’t like to do is, obviously, give specifics on items that are really hard to predict. We make an assessment of carry at the time of each realization. Generally speaking, we’ll be on the front-end of a new fund that’s in carry initial realizations. We’ll generally tend to be a little conservative in terms of our carry decisions, because we don’t want to be in a situation we have clawback. We’re very focused on managing clawback risk. But generally, the gain fund is generally to try to be in a place, so on average, take about 20% of the gain in carry. But again, you’re looking at different things and times you might even be in a more of a catch-up mode, we’ve actually taken a little bit more than the 20%. The right way I think to kind of think about realization of carry is the following. We’ve been able to grow accrued carry. We’re now at about $1.6 billion of net accrued carry, that’s up 46% from the end of the year. The – we have about $64 billion in remaining fair value in our carry funds, excluding investment solutions. Of that $64 billion, about 27% of it is over four years old. So generally speaking, about ready to be monetized. When I think about path on performance realizations, especially over that accrued carry balance, I generally think, on average, it takes us about three to four years to realize carry to realize the net accrued carry number once a fund is fully invested. So, obviously, earlier while still in the investment period, it’s been obviously a longer time period. The other key step I’d point you to that we have shared many times is that, over the last five plus years, our realization of net performances fees is generally been ranging from 40% to 55% of our beginning of the year accrued carry balance. Now, that’s not statistically whatever, it’s just happened to be that way, but it’s over 5.5 years of kind of doing that. I would say, that’s a pretty good way to think about things with those following exception. Right now, we have a lot of our accrued carry is in funds that are relatively new, 65%, in fact, of the carry generated this year from an accrual perspective is in funds that are still in an investment period. So if you’re going to use that last metric of 40% to 60%, or 40% to 55%, I’d look at it on the lower-end of that range simply because so much of that carry is still relatively new. But that’s, I think, a good way to overall frame kind of carry realizations.

And I clarify something I said earlier, David, I think, I didn’t quite reflect accurately what the situation was. We had in the quarter probably 30 new institutional investors, probably several hundred overall individual new investors. But when you have a feeder fund, you may get a few hundred individual investors in there, and we don’t really probably count each of those. But we did have a lot of feeder funds in the quarter that produce money and they probably each had a few hundred individual investors. But institutional investors that were new for the quarter, we’ve got 30 of them, they committed a total of about $320 million.

Thank you. Our next question comes from Michael Carrier with Bank of America. Your line is open.

Thanks, guys. Just given the strong performance this quarter, you gave the update on the portfolio companies. Just wanted to get a sense, I know, there’s the performance, there’s the amount that it can generate carry. Was there much in terms of the acceleration of carry? And in real assets, it seems like there’s been a fairly consistent strain, so any kind of granularity, what’s been driving that, because it’s obviously been building on the accrued carry as well, so just some detail there?

Mike, it’s Curt. Hey, the underlying driver has really been the consistent strong performance across the portfolio. So in corporate private equity sector, 8% in the quarter, and as Bill said in his prepared remarks, really coming from many of the big funds. So it’s been continued appreciation in U.S. buyout, Asia buyout for the big funds, et cetera. So, this quarter wasn’t so much about new funds coming into carry, but was really more about continued strong appreciation of funds that were in carry. Now, having said that, there’s a lot more funds in carry this quarter than, say, a year ago, and that also helps on the year-over-year comparison. In real assets, keep in mind, that we have a very diverse portfolio, particularly in real estate. So well over a 100 individual assets in that portfolio, very focused on appreciation and picking our spots asset by asset, geography by geography, and we’ve just really just had a very good run of very strong performance across that portfolio. Rob Stuckey who runs that that particular fund does a great job of kind of looking at piece by piece and really kind of very focused on fund construction in terms of how to manage things, looking at for key trends, key drivers and both from a specific area, but also asset type. And then in the energy piece, again, kind of a similar story in terms of being able to look at it from a asset by asset place as opposed to kind of a broad across the Board. Both in real estate and in energy, we benefited from a number of exits of recent, not only did that show up in realized number, but it really also helps you from really setting the valuations, but you have very good comparable marks upon which had a value of the portfolio. I don’t know, if you have anything to add to that.

No.

Thank you. Our next question comes from Chris Kotowski with Oppenheimer. Your line is open.

Good morning. CPE VI is now about five years old and more than 70% invested, and by my calculations, you must have had about like over $2.5 billion of realizations out of the fund. So the net IRR kind of must be coming into focus. And I wonder if you can kind of tell us roughly where that is tracking and whether it’s in for carry?

So if you – on CP VI, there’s a couple of key steps to obviously look at. We have about $9.7 billion of remaining fair value, you’ll see that on page 29 of the press release. It’s a total – multiple of invested capital of about 1.3 times, 72% invested. If you also look on page 24 of the press release, you’ll see a gross IRR for CP VI of 19%, and a net internal rate of return of a 11%, hence why that fund is doing well and isn’t in accrued carry.

Okay, great. Thank you.

Thank you. Our next question comes from Alex Blostein with Goldman Sachs. Your line is open.

Hey, good morning, everybody. Another one around just a fundraising dynamic. So, obviously, it seems like returns are great and the institutional appetite remains quite robust. How do you guys think about the opportunity to potentially upsize the $100 billion target? And if so, any areas in particular, were you’re seeing a lot more incremental demand could – that could drive that upside?

Well, I’d say, if we had a higher number, we probably wouldn’t want to disclose it publicly. I’d say that, there’s no advantage in having a higher number. $100 billion is a pretty awesome amount of money to raise. We think we can do it. We’re pretty confident we can do it. There are – it probably will be excess demand in most of our funds that are in the market today. But we’ve tried over the years not to take more money than we can invest. So we’ve set the targets at levels that we actually think we can invest prudently and wisely. So while it might be possible to raise more than we’re targeting in large buyout funds, we don’t actually think it’s necessarily a great idea to get more AUM just for the sake of having it if we can’t invest it wisely. So we’re pretty comfortable with a $100 billion target and pretty comfortable with the targets we put in each of the funds. And I think we’ll probably stay there for the time being unless something unforseen happens.

I think that the ability to invest the money, if we were just a contest to see how much more – how much money we could raise, we could raise more than $100 billion. I don’t think that’s what it’s all about. We tend to size our funds relative to what we see the strengths of our team, the market opportunities, competitive dynamics, whatever it may be over the life of Carlyle, but 30 years, I think, there may be two funds in that period of time that we didn’t really – didn’t reach, at least, 80% of that fund invested. So we generally are sizing the funds what we think we can invest. There are times when it’s easy to invest the money than it is to raise it, and the times when it’s easy to raise it than it is to invest it, obviously, the time to raise it is when people want to give you the money. And right now people I think want to entrust firms like Carlyle with their money and we’ve done a pretty good job.

The internal targets that we have for our three large buyout funds would take us roughly to about $25 billion for those three funds; U.S., Europe, Asia to be slightly more than that – around that range and we divided ours, as some organizations have one big global fund, we have it done differently. But we think that that amount of money is the level that we’re comfortable investing over the period – the investment period.

Thank you. Our next question comes from Gerald O’Hara with Jefferies. Your line is open. Gerald O’Hara: Great, thanks. Just circling back to real assets and maybe just if you wouldn’t mind providing a little bit of color on the performance fee energy portfolio in the quarter. It looks like, there’s some headwinds just broadly speaking with commodity pricing and your funds look like they’ve done quite well, including the international energy fund that was up, it looks like 19% in the quarter. Could you perhaps just talk a little bit about some of the puts and takes or dynamics there that have been able to perform so well during the quarter and of late? Thank you.

Sure, this is Bill. I’d say, that the – our energy business did perform very well. And we’re not, however, immune to the headwinds that are going on in the energy world. As you know, we don’t actually invest in funds. We’re not an ETF or something like that. We invest on an asset by asset basis. So the things that effected the second quarter and made it an excellent quarter from energy appreciation were one, in international energy, which as you pointed out, was up double digits. We have there a relatively high percentage of infrastructure spending – energy infrastructure spending in the international energy funds. And infrastructure assets are more immune to what goes on with regard to the price of the underlying commodity. So that was a relatively big factor in the performance of the international energy business. In domestic energy business, NGP, which is a fabulous business. As you know, we’re raising the XII fund now. The first XI funds all reached a carry, we expect that will happen to XI and XII as well and hopefully, it will continue for the future. And that’s been done in markets of good times and bad, good demand, high and low prices, they’re not immune. But as they tend to be invested in the very best basins in the United States, the Permian and related basins is one of the areas really strong investments and asset prices in that part of the market have been relatively strong. So that’s been another factor. On the other hand to give you an example of where maybe we’re not immune, our energy mezzanine lending business, which is now carried at 0.9 times our money. So anytime you’re lending money against a commodity there, whose price has been cut in half, obviously, you can have some effect on valuations in that part of the market. To relatively smaller fund, new investments is being done, and that fund of course are benefiting from investments at the lower energy prices. But those done before they – the price fell from a 100 to roughly 50, they obviously can be affected by what’s going on in the market.

Thank you. Our next question comes from Glenn Schorr with Evercore. Your line is open.

Hi, thanks very much. Maybe a two-part. The first part is, I agree with your assessment on the low rates and high valuations impacting nominal returns, this is a question. But I’m assuming LPs are moderating their expectations for forward returns and our eyes wide open to your assessment. I mean, they’re giving you tons of money anyway, but I’m just curious if they’re fully aware if it’s part of the conversation?

Our investors are sophisticated, yes, they are aware of it. Let me explain. I would say, in the 1980s and the 1990s on average, private equity funds in the United States probably had net internal rates of return in the high-teens or low 20s, on average, obviously top quartile were better. Today, the average returns that people are getting are roughly in the 14%, 15% range net. And I think investors say at 14% or 15%, we’d be very happy today, given low inflation rates and low interest rates. Obviously, if inflation change the next couple of years, those rates won’t they go up. Today, investors are pretty comfortable with those rates of return of 14% 15% net. Obviously, they expect in a top quartile fund, it might do somewhat better. But if the industry is averaging 14%, 15% net, which is what it’s doing, investors saying, that’s pretty good compared to everything else they see. So yes, they are fairly familiar with it.

And I would say, if we can do 14% to 15%, we can raise $200 billion or $300 billion or $500 billion, because in these markets it is just a – it’s really, really tough to continue to earn the types of returns that have been earned in the past, I think it is. When the government makes the – the central banks have gone really all rates head towards zero, the rates even in private equity begin to go down as well. So I think, we’ll retain – we’ll be able – I believe to achieve double-digit maybe mid-teen double-digit kind of rates of return depends on the fund and the timing and everything else. But I think, it’s really tough for us to do the kinds of returns we did over the 10, 20 years ago.

I think, final comment, what I’d call the paradox of private equity is that returns are coming down, prices are high. There’s a lot of dry powder by normal standards. So why are so many people giving so much money to people like us? Because they see everything else being less attractive. So at 14% or 15% net, if we can achieve that, I think, people think that probably we can, they’re pretty happy given everything else they have.

I appreciate that. That actually leads to my follow-up of, I noticed a report out last week talking about insatiable demand for products like yours and how the industry is able to charge either higher management fees, or get more interesting terms. Are you seeing much in the way of pricing and/or extend the terms longer locks, anything like that?

Some people are, I think, maybe perhaps trying to take advantage of the situation, there’s no doubt. It’s a seller’s market in a sense that you probably have stronger marketing advantage. In their own case, we’ve been through this through good and bad times and we’re trying to basically say to our investors, we’re going to basically have largely the same terms we’ve had before. We’re not trying to take advantage of a situation. I’d say that fees are probably roughly in the range they’ve been in the last couple years, transactions, these have largely gone away. But preferred returns are still reasonably high and that’s in fact, the disguised fee and co-investment is still very important to people and that’s in effect a disguised fee discount. So I’d say that, maybe some smaller funds that are trying to raise money, you can probably take advantage of some situations if they really want to and they have a good track record. But if you’re trying to raise as much money as we are, I think, it’s probably a good policy to kind of stick with your standard rules, and in terms of transaction fees, or terms of preferred returns and co-investments, and that’s what we’re really trying to do. We’re saying to our investors, look, with the good and bad times, we’re basically going to have the same terms with modest exceptions.

Thank you. Our next question comes from Brian Bedell with Deutstche Bank. Your line is open.

Great, thanks. Good morning. Maybe just part off and maybe just a clarification a little bit on the acceleration comment, David, that you made on this – on the fundraising pace for the second-half, just is that on 2Q, or first-half? And in other words, if it was on the 2Q pace that you’d be implying about $30 billion total roughly for the year, if it was on the first-half, it would be more like a $25 billion number, which I think is your annual run rate. And then just, Bill, I appreciate your comments on the ability to deploy that and your sort of $25 billion of framing from the U.S., European, and Asian fundraise in terms of what you feel like is a good amount for what you see as the opportunities. I guess, was that as you raise the funds over the course of the back-half of the year if we do get a substantial market correction later in the year? Would that change your sort of deployment outlook that would then therefore circle back and potentially raise what you could do and, say, CP VII?

Well, I’ll answer that first, and Bill can comment on it. I don’t know if there was disguised question to get me to change my earlier answer. But we expect that we’ll raise the money at roughly the levels I discussed and we discussed earlier for those buyout funds, and it will be somewhere in that range for those three buyout funds. Now, if the market were to go down and making prices much cheaper would we go raise more money? I don’t think we would do that. We tend to – don’t get – we don’t change our fundraising targets based on things that might happen over one or two months. There maybe people might want to give us more money, because it might be seen that prices are cheaper. But we have, for example, in the U.S. buyout, Bill can comment on this. I think over the recent years, we’ve been averaging roughly $3 billion a year or something like that. And we think that we can probably deploy roughly $3 billion a year and that’s why they targeted that fund of that size. But Bill, you want to comment on that further.

Yes, I’d say, $15 billion is a good number for the U.S. buyout fund. We’ve got a big team, 60 people. We don’t tend to do giant deals. In fact, in the second quarter of the – I guess, roughly $3.5 billion or $4 billion we invested in the second quarter. There were only two deals and the other over $300 million in size. So we tend to do a lot of deals, that’s why we have the relatively big teams. In terms of the impact of a market correction on the business, well, first of all, we have the existing portfolio what happens to the value of the existing portfolio. And then you have the availability of doing new deals. Interestingly, when a market correction happens, generally, you don’t do a lot of new deals either you’re afraid, is it going to continue, is it going to get worse or the sellers think this is very temporary, it’s going to bounce right back. And therefore, they don’t – they’re not really anxious to sell. So by the way, I’m not expecting a market correction. But of course, you’re never expecting it until it occurs. So I think that we can still find suitable deals to do, but it’s really hard. I think we’ve moved to do a lot more structured deals, deals that would give us some downside protection. Sometimes we’ve done more pipes. We’ve been more in deals that might have a debt component even in our private equity funds, or a preferred component in various ways to improve our structure, we might sit on top of the founder or something like that. But it’s – I don’t want to underestimate how tough it is to put the money to work in today’s market conditions.

On the buyout funds, we’ve talked about them. But I don’t want to ignore our credit funds, and our real asset funds, and our solutions funds. They are all receiving pretty good receptivity in the market, and we expect that they will do quite well as well. And we make sure that our fundraising team doesn’t lose focus on that either, because it’s obviously probably a little easier to sell a U.S. buyout fund, it’s – when it’s 8th generation or 7th generation or real estate fund, I want to say, 8th generation, some of our credit funds are newer, but they’re doing pretty well also. And I think, we’re pretty comfortable with the fundraising environment and the fundraising capabilities we have to get the $100 billion.

Thank you [Operator Instructions]. I’m not showing any follow-up questions. I’d like to go ahead and hand the call back over for closing remarks.

Thank you, James, and thank you, everyone, today for joining our call. We look forward to speaking with you next quarter. If you have any additional questions, feel free to call Investor Relations at any time.

Thank you, ladies and gentlemen. That does conclude today’s conference. Thank you very much for your participation. You may all disconnect. Have a wonderful day.