What The Carlyle Group Inc. told the SEC could break it.

Carlyle depends on its senior investment professionals, including its CEO; losing them or investor confidence in them — amid a tougher recruiting/retention environment — could materially harm the business and fundraising.

“We depend on our senior Carlyle professionals, including our Chief Executive Officer, and the loss of their services or investor confidence in such personnel could have a material adverse effect on our business, results of operations, and financial condition.”

Carlyle's carry-fund returns rely heavily on leverage — indebtedness has historically been up to 70%+ of a portfolio company's or real-estate asset's total capitalization; tighter or costlier credit markets would impair returns.

“Many of our carry funds' investments rely heavily on the use of leverage, and our ability to achieve attractive rates of return on investments will depend on our ability to access sufficient sources of indebtedness at attractive rates. For example, in many private equity investments, indebtedness may constitute and historically has constituted up to 70% or more of a portfolio company's or real estate asset's total debt and equity capitalization, including debt that may be incurred in connection with the”

Carlyle's subsidiaries are SEC-registered investment advisers subject to extensive and intensifying regulation by the SEC, CFTC and global regulators (plus the UK FCA's Consumer Duty regime and Chinese CSRC rules), raising compliance cost and risk.

“Our businesses, as well as the financial services industry generally, are subject to extensive regulation in the United States and elsewhere. In general, the SEC, Commodity Futures Trading Commission (the “CFTC”), and other regulators around the globe have in recent years significantly increased their regulatory activities with respect to global investment firms. Certain of our subsidiaries are registered as investment advisers with the SEC.”