Carlyle Turnaround Halts $1T Merger Talks With Macquarie Group

The talks regarding the potential merger of The Carlyle Group Inc. CG and Australia-based Macquarie Group, which could have formed a $1 trillion investment powerhouse, have been stalled. After Harvey Schwartz became the CEO of Carlyle, investors gained confidence in the firm’s improving performance, which reduced the rationale for the merger. This was first reported by Semafor, citing people familiar with the matter.

Details of Carlyle-Macquarie Discussions

The Carlyle and Macquarie merger would have instantly created a global alternatives giant spanning private equity, credit, real estate and Macquarie’s traditional strength in infrastructure.

A deal would have ranked the combined firm ahead of its peers, including KKR & Co. Inc. KKR and Ares Management Corporation ARES in terms of assets under management (AUM).
 
Carlyle’s vulnerability to a merger emerged in 2022. While a Fortitude Re advisory agreement in April 2022 boosted its AUM and fee-earning AUM by $50 billion, the abrupt departure of CEO Kewsong Lee made Carlyle vulnerable to a takeover. The contentious departure of Lee led to internal instability. With peers like KKR and Ares aggressively expanding into credit, insurance, and infrastructure, Carlyle’s valuation began to lag, leaving the firm more vulnerable to a potential takeover.

This narrative shifted in February 2023, when Goldman Sachs veteran Harvey Schwartz was appointed CEO of Carlyle. Since then, investor sentiment has improved meaningfully. Over the past year, CG has raised $51 billion in fresh capital, largely in high-growth areas such as credit and secondaries, while fee-earning AUM continued to expand through the first half of 2025.

To build on this momentum, Carlyle pursued additional growth initiatives. In March 2025, Carlyle Secured Lending, a subsidiary of Carlyle, merged with Carlyle Secured Lending III, adding $480 million in investments and $324 million in net asset value. Three months later, the firm partnered with Citigroup to scale its asset-backed finance platform.

With these steps strengthening its franchise and supporting long-term revenue growth, Carlyle’s need for a transformational merger has diminished, making a deal with Macquarie far less appealing in the near term.

Carlyle’s Zacks Rank & Price Performance

Over the past year, CG’s shares have gained 58.8%, outperforming the industry’s 11.3% growth.

Currently, Carlyle carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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