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Summary
A Morgan Stanley Research document titled 'North America Insight' analyzing The Carlyle Group (CG). It presents a Sum-of-the-Parts (SOTP) valuation and sensitivity analysis for CG, specifically examining the financial impact of a potential C-Corp conversion. The document includes financial tables projecting 2018 earnings, balance sheet assets as of 3Q17, and estimated share prices under different market multiples. The document bears the Bates stamp HOUSE_OVERSIGHT_025575, indicating it is part of a congressional investigation production.
Organizations (5)
| Name | Type | Context |
|---|---|---|
| Morgan Stanley | ||
| The Carlyle Group | ||
| CG | ||
| Thomson Reuters | ||
| House Oversight Committee |
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| Location | Context |
|---|---|
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Morgan Stanley Research report analyzing The Carlyle Group financials.
Full Extracted Text
Complete text extracted from the document (2,013 characters)
Morgan Stanley | RESEARCH
NORTH AMERICA INSIGHT
NORTH AMERICA INSIGHT
The Carlyle Group Management SOTP and Sensitivity Analysis
Exhibit 39:
SOTP for CG
The Carlyle Group (CG)
SOTP for CG
The Carlyle Group (CG)
[Table Header]
Sum-of-the-Parts Components (CG) | Current Price SOTP | Downside Case C-Corp Conversion | Change | Upside Case C-Corp Conversion | Change
Sum-of-the-Parts Components (CG) | Current Price SOTP | Downside Case C-Corp Conversion | Change | Upside Case C-Corp Conversion | Change
[Section: Fee Related Earnings]
2018e Pre-Tax Core FRE / Sh | $0.29 | $0.29 | 0% | $0.29 | 0%
Tax Rate | 24% | 24% | 0% | 24% | 0%
2018e After-Tax Core FRE / Sh | $0.22 | $0.22 | 0% | $0.22 | 0%
FRE Multiple | 15.0x | 15.0x | 0.0x | 22.5x | 7.5x
Core FRE Value | $3.34 | $3.34 | 0% | $5.01 | 50%
2018e Pre-Tax Core FRE / Sh | $0.29 | $0.29 | 0% | $0.29 | 0%
Tax Rate | 24% | 24% | 0% | 24% | 0%
2018e After-Tax Core FRE / Sh | $0.22 | $0.22 | 0% | $0.22 | 0%
FRE Multiple | 15.0x | 15.0x | 0.0x | 22.5x | 7.5x
Core FRE Value | $3.34 | $3.34 | 0% | $5.01 | 50%
[Section: Balance Sheet]
+ Balance Sheet Net Cash and Investments / Sh (as of 3Q17) | $0.85 | $0.85 | 0% | $0.85 | 0%
+ Balance Sheet Net Cash and Investments / Sh (as of 3Q17) | $0.85 | $0.85 | 0% | $0.85 | 0%
[Section: Accrued Carry]
+ Net Accrued Carry / Sh (as of 3Q17) | $4.40 | $4.40 | 0% | $4.40 | 0%
+ Net Accrued Carry / Sh (as of 3Q17) | $4.40 | $4.40 | 0% | $4.40 | 0%
[Section: Market Implied Carry Value]
Avg Net Carried interest / Sh (2018e-2020e) | $2.85 | $2.17 | -24% | $2.17 | -24%
Multiple | 6.0x | 6.9x | 1.0x | 8.0x | 2.0x
Market Implied Carry Value | $17.01 | $15.03 | -12% | $17.26 | 1%
Avg Net Carried interest / Sh (2018e-2020e) | $2.85 | $2.17 | -24% | $2.17 | -24%
Multiple | 6.0x | 6.9x | 1.0x | 8.0x | 2.0x
Market Implied Carry Value | $17.01 | $15.03 | -12% | $17.26 | 1%
[Section: Valuation]
= Total Value | $25.60 | $23.62 | -8% | $27.52 | 8%
2018e EPS | $3.03 | $2.80 | -8% | $2.80 | -8%
P/E | 8.5x | 8.5x | 0.0x | 9.8x | 1.4x
= Total Value | $25.60 | $23.62 | -8% | $27.52 | 8%
2018e EPS | $3.03 | $2.80 | -8% | $2.80 | -8%
P/E | 8.5x | 8.5x | 0.0x | 9.8x | 1.4x
Source: Company Data, Morgan Stanley Research estimates
Exhibit 40:
CG Estimated Potential Share Price in C-corp Conversion
Multiple on Future Performance Fees
[Table Axis: Fee Related Earnings Multiple (10.0x - 30.0x) vs Multiple on Future Performance Fees (5.0x - 11.0x)]
[Data Grid showing share prices ranging from 19 to 36]
Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates
CG Estimated Potential Share Price in C-corp Conversion
Multiple on Future Performance Fees
[Table Axis: Fee Related Earnings Multiple (10.0x - 30.0x) vs Multiple on Future Performance Fees (5.0x - 11.0x)]
[Data Grid showing share prices ranging from 19 to 36]
Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates
Exhibit 41:
CG Estimated % Change in Current Share Price
Multiple on Future Performance Fees
[Table Axis: Fee Related Earnings Multiple (12.5x - 30.0x) vs Multiple on Future Performance Fees (5.0x - 11.0x)]
[Data Grid showing percentage changes ranging from -26% to 40%]
Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates
CG Estimated % Change in Current Share Price
Multiple on Future Performance Fees
[Table Axis: Fee Related Earnings Multiple (12.5x - 30.0x) vs Multiple on Future Performance Fees (5.0x - 11.0x)]
[Data Grid showing percentage changes ranging from -26% to 40%]
Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates
MORGAN STANLEY RESEARCH
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