1、January 2024Global Insights5 QUESTIONS FOR 20242No single question seems likely to dominate the 2024 macro discourse to the extent the debate over a“hard”or“soft”landing commanded our attention in 2023.But last years developments raise a new set of questions for the year ahead,including the timing a

2、nd magnitude of rate cuts and the state of the economy likely to give rise to them.We also wonder:If office attendance at roughly half of pre-pandemic levels is the new equilibrium,will the market value of office properties be transferred to residential real estate in proportion to the shift in the

3、underlying economic activity?What does Chinas emergence as the worlds top auto-exporting economy in 2023 portend for the future of competition in the sector and value of legacy production networks?And what will the likely policy response mean for the future of global trade and capital flows?We expec

4、t to see broad productivity gains as businesses operating across the economy embrace Generative AI,but will investors increasing reluctance to fund losses place constraints on the growth of new firms in the space that were largely absent during the QE era?3Figure 1.Source:Carlyle Analysis of Portfol

5、io Company Data;BLS,November 2023.Presented for illustrative purposes only.There is no guarantee any trends will continue.In the press conference following the November 1 FOMC Meeting,Fed Chair Powell indicated that further rate hikes wouldnt be necessary if financial conditions remained tight.Marke

6、t participants heard the first part but largely ignored the second.Stock prices soared,credit spreads narrowed,and longer-term bond yields fell.In other words,financial conditions eased massively.But instead of threatening to hike rates to counteract the unwelcome market repricing,Powell egged it on

7、.First by describing short-term interest rates as“well into restrictive territory”and then acknowledging that the Federal Open Market Committee(FOMC)had begun to consider rate cuts.Inflation eased massively over the course of 2023,with outright declines in the prices of components,parts,and other ke

8、y inputs like chemicals and chips that fueled so much of inflations rise in 2021-22.Pricing power also returned to more normal levels across most of the economy(Figure 1).By August 2023,our portfolio data indicated that there was no case for additional rate hikes.But with total spending in the econo

9、my still above levels the Fed believed was consistent with its 2%inflation target,it seemed that rates might need to remain near current levels for some time to come.What if the Fed doesnt cut rates in March?1Figure 1.Sharp Fall in Inflation Rates 1TRADE SECRET AND STRICTLY CONFIDENTIALCARLYLE PRICI

10、NG POWER INDEXCARLYLE INPUT PRICE COMPOSITEFigure 1:Sharp Fall in Inflation Rates Source:Carlyle Analysis of Portfolio Company Data,BLS,November 2023.Presented for illustrative purposes only.There is no guarantee any trends will continue.-7%-2%4%9%14%19%24%-20%0%20%40%60%80%Jan-21Apr-21Jul-21Oct-21J

11、an-22Apr-22Jul-22Oct-22Jan-23Apr-23Jul-23Oct-23Jan-24U.S.Manufacturing PPI(YoY%)Carlyle Intermediate Goods Prices(YoY%)Carlyle Input Price IndexU.S.Manufacturing PPI(Advanced 2 Months)8%9%10%11%12%13%14%15%16%17%18%-2%0%2%4%6%8%10%12%14%16%18%Mar-16Sep-16Mar-17Sep-17Mar-18Sep-18Mar-19Sep-19Mar-20Sep

12、-20Mar-21Sep-21Mar-22Sep-22Mar-23Sep-23Operating MarginMark Ups(YoY%)Mark UpsProfit Margins(Lagged)4In the intervening months,the Fed began to worry that if inflation continued to decline(as policymakers want and expect),real short-term interest rates would reach levels that badly dent economic acti

13、vity(as policymakers wish to avoid).This makes sense.If annual inflation were to fall to 2%,real interest rates would reach nearly 3.5%if the fed funds rate remained at current levels.That would put it 400bp above the average for the decade prior to the pandemic and well north of any estimate for th

14、e“equilibrium”rate necessary to stabilize inflation at full employment(Figure 2).If you believe contemporary macroeconomic models,substantial demand destruction would seem inevitable at such high real rates.But how well have these models captured the recent disinflation?Tight policy is supposed to r

15、estrain spending,deter investment,and depress labor demand.There are signs of all three,but not of the magnitude necessary to explain the easing of price pressures,which seems mainly the result of rebuilt capacity and shifts in consumption patterns.Aggressive discounting to liquidate unwanted goods

16、inventories has been the main driver of the overall fall in inflation.Now that spending patterns have normalized and inventories have stabilized at long-term averages(Figure 3,page 5),were likely to get a truer sense of the inflation and growth to expect at these interest rates.Multiple rate cuts sh

17、ould be in everyones“base case”for 2024.But six,as implied by the futures markets?Arriving in the context of“consensus”expectations for 1.5%GDP growth and an 11%increase in corporate earnings(Figure 4,page 5)?These outcomes may not be mutually exclusive,but they dont typically arrive simultaneously.

18、Markets seem to be priced for a growth scare that forces decisive Fed action but doesnt materialize.Figure 2.Source:Carlyle Analysis;Federal Reserve Data,December 2023.There is no guarantee any trends will continue.Figure 2.Fed Worried Real Interest Rates May be Too High2TRADE SECRET AND STRICTLY CO

19、NFIDENTIALESTIMATES OF NEUTRAL REAL INTEREST RATEU.S.REAL INTEREST RATES1.033.262.771.85-8.00-6.00-4.00-2.000.002.004.00Nov-18Feb-19May-19Aug-19Nov-19Feb-20May-20Aug-20Nov-20Feb-21May-21Aug-21Nov-21Feb-22May-22Aug-22Nov-22Feb-23May-23Aug-23Nov-23Real One-Year Interest Rate(Percent)Forward Real Rate(

20、from TIPS)Backward Real Rate(Realized Inflation)0.0%1.3%2.3%-2.5%-2.0%-1.5%-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%Mar-82Dec-84Sep-87Jun-90Mar-93Dec-95Sep-98Jun-01Mar-04Dec-06Sep-09Jun-12Mar-15Dec-17Sep-20Jun-23Mar-265Figure 3.Aggressive Discounting May Have EndedFigure 4.Markets Priced for Aggressive

21、 Easing&Impressive Earnings Growth Figure 3.Source:Carlyle Analysis of Portfolio Company Data;Bloomberg,Federal Reserve Data,December 2023.There is no guarantee any trends will continue.Figure 4.Source:Carlyle Analysis;Bloomberg,FactSet,December 2023.There is no guarantee any trends will continue.4T

22、RADE SECRET AND STRICTLY CONFIDENTIALS&P 500 EARNINGS ESTIMATES3M SOFR FUTURES2.50%3.00%3.50%4.00%4.50%5.00%5.50%6.00%Dec-23Feb-24Apr-24Jun-24Aug-24Oct-24Dec-24Feb-25Apr-25Jun-25Aug-25Oct-25Dec-25Short-Term Interest Rate$219$221$245$0$50$100$150$200$250$3002015 2016 2017 2018 2019 2020 2021 2022 202

23、3(Est)2024(Est)+11%61.Bureau of Economic Analysis,GDP by Industry,December 2023.2.CNBC,“People are over the 40-hour workweek,”March 2023.3.S&P Office REIT Index,December 2023.4.Bankrate,“Average cost of commuting in 2023.”U.S.Census Bureau,New Residential Sales,December 2023.Bureau of Labor Statisti

24、cs,Consumer Price Index,December 2023.5.Forbes,“CEOs Predict a 5 Day Work Week by 2026,”O(jiān)ctober 2023.The market value of commercial real estate(CRE)varies with the market value of economic activity that occurs on premise.That may seem obvious.Yet many CRE investors operate in an alternate paradigm t

25、hat assigns value to the structure itself.Such thinking achieves its fullest expression in the“replacement cost method.”If you could buy a building for$50 million that would cost$100 million to construct today,you might have a steal.Or you may instead discover the discount was illusory because the s

26、tructure no longer attracts the economic activity that would justify rebuilding it for even$30 million.Some CRE assets have an easier time retaining tenants than others and this is surely the result of property-specific amenities.But lets peel back this onion a bit:if a high-end mall or fashionable

27、shopping center succeeds in an era when online sales have disrupted much of the retail sector,thats thanks to the gross receipts still generated on that square footage,not something intrinsic to the structure.Maybe the aesthetics and location are what draws the foot traffic and commerce,but its the

28、commerce itself that ultimately matters for the value of the asset.Conceiving of the value of CRE assets as derivative of on-premises economic activity holds some sobering implications for the future of the office sector.While theres no cash register to measure office commerce directly,the value of

29、office properties is predicated on the$10 trillion in annual revenue generated by office-consuming sectors of the economy.1 That economic activity is still occurring indeed,the revenues of these sectors increased by 6%in 2023 but much less of it happens at the office.U.S.office attendance finished 2

30、023 at half of levels that prevailed prior to the onset of the pandemic,and people spend far less time at the office when they do go.2 Job postings indicate that higher income employees presumably those responsible for a larger share of the revenue generated by office-consuming sectors are far more

31、likely to work from home(Figure 5,page 7).In many cases,the decline in in-person economic activity hasnt yet manifested in property cash flows.Leases are long-term contracts.Going concerns cant stop paying their rent any more than they can stop paying the coupons on their bonds and loans.But when th

32、ose leases expire,some property owners may face a reckoning.The market value of office REITs has declined by about 40%since the onset of the pandemic.3 We may find that value hasnt been destroyed so much as transferred.What once distinguished residential from commercial real estate was the absence o

33、f economic activity on premises.Rent(primary or imputed)reflected the market value of“shelter services.”Today,residences not only consume household income but facilitate its generation.That should be reflected in higher residential real estate values.Fully capitalizing savings from two fewer days co

34、mmuting would imply 15%upside to residential real estate.4 And one would expect savings on office rent to be at least partly reflected in higher employee compensation,which could further increase the value of residential real estate at constant rent-to-income ratios.Surveys suggest CEOs want their e

35、mployees back at the office,5 and many firms have announced a resumption of five-day workweeks.But these statements seem aspirational and have rarely been corroborated by attendance data.The real-world business continuity test of 2020 proved that much office work can be done from home and this lesso

36、n is not likely to be unlearned.Has the market value of office space been transferred to residential real estate?27Figure 5.Shift in Economic Activity from Offices to ResidencesFigure 5.Source:Carlyle Analysis;Kastle Systems Data,OpenTable,Harvard Business Review,December 2023.There is no guarantee

37、any trends will continue.5TRADE SECRET AND STRICTLY CONFIDENTIALSHARE OF JOBS OFFERING WORK FROM HOMEOFFICE ATTENDANCE VS SEATED DININGFigure 5:Shift in Economic Activity from Offices to ResidencesSource:Carlyle Analysis;Federal Reserve,Bloomberg,December 2023.There is no guarantee any trends will c

38、ontinue.51.64020406080100120Feb-20May-20Aug-20Nov-20Feb-21May-21Aug-21Nov-21Feb-22May-22Aug-22Nov-22Feb-23May-23Aug-23Nov-23Index(February 2020=100)Office Occupancy IndexDining Index0%5%10%15%20%25%30%35%$20,000$120,000$220,000Share of Postings Offering Remote/Hybrid WorkAnnual Earnings202320198What

39、 are the market implications of the emergence of Chinas electric vehicle sector?3In 2023,China overtook Japan as the worlds largest auto exporter thanks to a four-fold increase in foreign sales since the pandemic(Figure 6).Over the same period,Chinese automakers increased their domestic market share

40、 by 20 percentage points and now account for over half of all passenger vehicle sales in China.The sectors growth is closely tied to the energy transition.Electric vehicles(EVs)comprise one quarter of Chinas auto exports and more than a third of domestic auto sales.Over half of global EV sales invol

41、ve Chinese brands.6In many markets,EV adoption has been constrained by high prices(and,in many places,concerns about charging infrastructure).EV sales are growing,with more than one million units sold in the U.S.in 2023,up 50%from the prior year.Unfortunately,production of new EVs has grown even fas

42、ter,causing EV inventory-to-sales ratios to double over the past year to levels that are 60%higher than for the U.S.new car market as a whole.7 As Ford noted in a statement accompanying its Q3-2023 earnings,“many North American customers interested in buying EVs are unwilling to pay premiums for the

43、m over gas or hybrid vehicles.”8,9EV sales in China generally do not depend on consumers willingness to pay such premiums.The cheapest EV in Europe and the U.S.costs about twice as much as the cheapest internal combustion engine(ICE)vehicle;in China the cheapest EV sells at an 8%discount.10 And Chin

44、ese EV manufacturers Figure 6.Source:Carlyle Analysis;CEIC,Lowy Institute,Bloomberg,December 2023.There is no guarantee any trends will continue.6.Bloomberg,November 1,2023.7.Cox Automotive Report,December 14,2023.8.Reuters,October 27,2023.9.In the U.S.,limitations on sourcing battery components fro

45、m Chinese suppliers may complicate EV adoption further as such requirements are directly tied to which models are eligible for the credit.Another complicating factor is Beijings recent ban on the export of technology needed to mine and separate rare earth minerals.Figure 6.Growth of Chinese Automoti

46、ve Sector6TRADE SECRET AND STRICTLY CONFIDENTIALCHINA AUTO MARKET SHARE BY BRAND ORIGINAUTO EXPORTS BY ECONOMY0123456Jan-17May-17Sep-17Jan-18May-18Sep-18Jan-19May-19Sep-19Jan-20May-20Sep-20Jan-21May-21Sep-21Jan-22May-22Sep-22Jan-23May-23Auto Exports(Units,12-Month Sum.Millions)ChinaJapanUSGermanySou

47、th Korea0%5%10%15%20%25%30%35%40%45%50%Mar-08Dec-08Sep-09Jun-10Mar-11Dec-11Sep-12Jun-13Mar-14Dec-14Sep-15Jun-16Mar-17Dec-17Sep-18Jun-19Mar-20Dec-20Sep-21Jun-22Mar-23ChinaJapanU.S.GermanySouth Korea9can deliver these EVs profitably.Market-leading BYD reported that it earned$1.4 billion in Q3-2023,an

48、82%increase from the prior year.11 Affordability also explains export performance,especially in Emerging Markets.The manufacture of EVs requires a mix of human and physical capital than differs from the endowed stock of ICE incumbents.While EVs have roughly the same suspension,tires,and wheels as IC

49、E vehicles,they share little else in common.EVs employ an entirely different form of propulsion,with motors that transform electrical energy from batteries into mechanical energy rather than engines that convert hydrocarbons into mechanical force.A unified computer architecture replaces a patchwork

50、of separate processors and control systems.EVs rely on 60%fewer components and parts than ICE counterparts(13,000 compared to over 30,000),with no exhaust systems,alternators,fuel injectors,starters,or(multi-speed)transmissions.Theres little overlap between basic materials,supply chains,and assembly

51、 processes.Focusing exclusively on EVs has allowed some Chinese firms to engineer integrated production processes that deliver a 25%cost advantage relative to Western competitors.12 Some of this is attributable to cheaper lithium-ion battery packs,which cost$126 per kilowatt hour in China compared t

52、o$141 to$150 in the U.S.and Europe.13 Cross-border trade in EV battery packs is constrained by their weight and bulk,which means they generally need to be manufactured near vehicle assembly lines.About 80%of EV battery cells are manufactured in China,backed by a domestic value chain that mines,refin

53、es,and processes the requisite metals and materials.Chinas dominance in EV battery packs is just an extension of the economys market lead in overall battery production(Figure 7).14Its no coincidence that BYD started as a battery manufacturer before transitioning into autos.In some ways,EVs look like

54、 a more natural adjacency for battery or software companies than for ICE vehicle manufacturers.And that may become even more obvious over time as EV manufacturers compete on battery performance,vehicle range,and self-driving systems and other AI applications.Incumbent automakers are hardly out of th

55、e game,but changing consumer preferences and EV mandates pose a difficult question:if the future is electric and ICE vehicle production and supply networks have a limited role to play in it,are these just“stranded assets,”akin to coal-fired power plants?Figure 7.Chinas Dominance of Battery MarketFig

56、ure 7.Source:Carlyle Analysis;Bloomberg,December 2023.There is no guarantee any trends will continue.10.JATO Dynamics,“EV price gap:A divide in the global automotive industry,”O(jiān)ctober 2023.11.Reuters,October 30,2023.12.Patrick Hummel and Paul Gong,UBS,August 31,2023.13.BloombergNEF,November 26,2023.

57、14.Chinas Dominance in Strategic Minerals Goes Beyond Ore,November 1,2023.7TRADE SECRET AND STRICTLY CONFIDENTIALCHINAS SHARE IN BATTERY PRODUCTIONGLOBAL EV BATTERY MARKET SHAREFigure 7:Chinas Dominance of Battery Markethttps:/ SDISK OnPanasonicLG Energy SolutionBYDCATL60%65%65%68%71%90%0%50%100%Lit

58、hium RefiningNickel RefiningBattery ComponentsCobalt RefiningBattery CellsRare Earth Element Refining10About one-third of Chinas EV exports go to Europe.In September,the EU launched a probe into Chinas EV subsidies to address the“flood”of“artificially low”-priced autos entering the bloc.Though many

59、models of Chinese EVs are priced twice as high in Europe as in their domestic market,they still sell at a 20%average discount to the offerings of European rivals,a price disparity expected to cause Chinas share of the European EV market to double to 15%over the next two years(these figures include T

60、esla EVs manufactured in China).EU tariffs on Chinese EVs could be announced by July,would be set in proportion to size of the estimated subsidies,and come on top of an already-imposed 10%import duty.15Chinas trade balance in autos flipped from$35 billion deficit in 2020 to nearly$30 billion surplus

61、 last year.This remarkable turnaround has not gone unnoticed by European Union officials,as it has been part of a broader shift in bilateral trade balances.Since the onset of the pandemic,Chinas exports to the EU have grown more than 70%and the EUs trade deficit with China has doubled to 400 billion

62、(Figure 8).EU leaders see this deficit as“unsustainable”and have threatened tariffs and even a trade war if left unaddressed.and will it accelerate the fracture of global trade?4Figure 8.Shifting Trade Balances Figure 8.Source:Carlyle Analysis;CSIS,Eurostat,December 2023.There is no guarantee any tr

63、ends will continue.15.All data from Bloomberg,December 2023.8TRADE SECRET AND STRICTLY CONFIDENTIALEU TRADE WITH CHINACHINA TRADE IN AUTOS-500-300-100100300500700201820192020202120222023ETrade(Billions)ImportsExportsBalance$0$10$20$30$40$50$60$70$80201820192020202120222023ETrade(Billions)ExportsImpo

64、rts11The main driver of the widened bilateral deficit has been EU imports of other“green industry”products like solar modules and batteries.Since the onset of the pandemic,European imports of Chinese solar modules have grown nearly five-fold,to 111 GW of capacity in the 12 months ending June 2023(Fi

65、gure 9,page 12),roughly equivalent to the entire installed PV solar capacity of the United States.Over the past two years,the share of Chinese batteries in EU imports increased by 50%.16 A recent European Commission report warned that at current trends,the EU could become as dependent on China for b

66、atteries and fuel cells as it was on Russia for oil and gas prior to the war in Ukraine.17Europe absorbs nearly 60%of all Chinas solar module exports.Chinese firms have focused on Europe because the U.S.market has become so inhospitable to them.Due largely to tariffs,U.S.imports of solar modules fro

67、m China stood at just 0.5%of EU levels in 2023.Tariffs similarly limited U.S.imports of Chinese EVs to 8.5%of EU levels.18 Recent news reports suggest U.S.tariffs on Chinese solar modules,EVs,and lithium-ion batteries could be raised further in 2024.19 And while the U.S.Inflation Reduction Act(IRA)w

68、elcomes Japanese and Korean investment in domestic battery manufacturing capacity,its“foreign entity of concern”provisions make similar investment from Chinese firms impracticable.As a result,much of their foreign direct investment(FDI)has been directed to Europe(Figure 9,page 12).It is difficult to

69、 overstate the complexity that the simultaneous intersection of geopolitical rivalry,energy transition,and industrial transformation introduces to the global economic picture.U.S.efforts to limit Chinese firms access to its market have redirected Chinese trade and investment flows to Europe to an ex

70、tent thats not likely to prove politically tenable.The looming EU response is now likely to introduce third and fourth order effects.Governments wish to transition to clean energy fast and cheap enough to meet net zero commitments,but also slow and expensive enough to protect domestic industries.Sub

71、sidies,mandates,and trade barriers are embraced to counteract subsidies,mandates,and trade barriers.“Free trade”has always been more of an idea than a reality.But the era of relatively unfettered global trade and capital flows premised on that idea facilitated an unprecedented rise in global prosper

72、ity.Since the agreement to establish the World Trade Organization(WTO)was signed in 1994,global incomes rose 2.75x in real terms,the price of durable goods declined by nearly 40%,and the U.S.share(25%)of this much larger global pie was roughly unchanged from the pre-globalization days of 1980(Figure

73、 10,page 12).Times dont always change for the better.16.Carlyle Analysis,EuroStat Data.Rhodium Group,“Opening Salvo:The EUs Electric Vehicle Probe and What Comes Next,”O(jiān)ctober 2023.17.Reuters,September 2023.18.Bloomberg,December 2023.China exported 48,000 EVs to the U.S.through October 2023,compared

74、 to 564,000 to the EU.19.Wall Street Journal,“Biden Administration Explores Raising Tariffs on Chinese EVs,”December 21,2023.“It is difficult to overstate the complexity that the simultaneous intersection of geopolitical rivalry,energy transition,and industrial transformation introduces to the globa

75、l economic picture.”12Figure 9.Green Industry Trade&Investment FlowsFigure 10.Impact of GlobalizationFigure 9.Source:Carlyle Analysis;Eurostat,Rhodium Group,December 2023.There is no guarantee any trends will continue.Figure 10.Source:Carlyle Analysis;IMF WEO Database,Federal Reserve Data,December 2

76、023.There is no guarantee any trends will continue.9TRADE SECRET AND STRICTLY CONFIDENTIALPLANNED BATTERY CAPACITY ADDITIONS IN EUROPECHINAS SOLAR MODULE EXPORTS TO EUROPEFigure 9:Green Industry Trade&Investment Flowshttps:/ Basis050100150200250300350Czech RepublicSlovakiaPortugalItalySpainPolandSwe

77、denFranceAdditional EuropeHungaryGermanyGWhNon-Chinese FirmsNon-Chinese FirmsChinese FirmsChinese FirmsCurrent CapacityPlanned Capacity13to“chase”stocks that grow without respect to their underlying fundamentals.23Whether or not this amounts to a“subsidy,”investors became increasingly willing to fun

78、d operating losses at more mature companies with promising technologies.From 2017 to 2022,only about one-fifth of IPOs involved companies with positive net income(Figure 11,page 14).Among tech companies with a valuation in excess of$1 billion prior to the IPO,about half had losses greater than 20%of

79、 revenues and one-fourth had losses equal to more than 40%of revenue.24 The amount of equity capital raised to cover cumulative operating losses has been staggering,ranging from$5 billion to$32 billion in the cases of many high-profile businesses.Now that QE has turned into QT(quantitative tightenin

80、g),that gravy train has ended.Cumulative layoffs in the tech sector since the first Fed rate hike have reached 400,000 as companies conserve cash and narrow losses in anticipation that that next round of equity funding might not be forthcoming.While public equity prices of loss-making businesses hav

81、e rebounded sharply,in many cases,since the November 1 FOMC meeting,it would be cavalier to expect a swift return to 2021 market conditions.Management teams require a more conservative approach involving a clearer path to profitability.What does this mean for the boom in Generative AI and related te

82、chnologies?While the sharp decline in exits has negatively impacted VC fundraising and overall investment,capital deployment in AI remains robust,with the vertical receiving more capital than start-ups in any other sector last year,up 16%from prior-year levels(Figure 12,page 14).Will investors not o

83、nly be willing to incubate promising The EUs investigation into Chinas EV subsidies will focus mainly on purchase subsidies paid to manufacturers,direct government support in the founding of over 500 EV manufacturers,and exemptions from the vehicle purchase tax assessed on ICE vehicles.But most anal

84、ysts agree that the biggest source of subsidization in China comes from below-market debt and equity financing.20 Satisfactorily proving the existence of these subsides can be challenging.The petitioner must stipulate a counterfactual expected return that the bank or equity investor would have deman

85、ded had the transaction occurred on more neutral terms.At the 2010 Jackson Hole Symposium,Fed Chair Ben Bernanke described quantitative easing(QE)as a de facto subsidy for private borrowers and equity issuers.By buying longer-dated Treasury bonds and mortgage-backed securities(MBS),the Fed reduced t

86、heir availability,pushing private portfolios into other types of assets and depressing their expected returns.21 Bernanke believed this“portfolio balance channel”would not only affect close substitutes for Treasuries,like high-grade corporate bonds,but also filter through to higher stock prices and

87、tighter credit spreads.22While empirical work has had difficulty disentangling the portfolio balance channel from the effects of sustained periods of zero interest rates,there is broad evidence of an increase in risk-seeking behavior.If investors return targets are anchored at some fixed level,lower

88、 returns on safe assets naturally push them to assume greater risk and adjust strategies in response to the Fed-induced repricing.Of particular interest has been the markets affinity for“growth”stocks,which some researchers see as evidence of a distortion in price signals that led investors How will

89、 post-QE era influence AI business models?520.OECD,“Measuring distortions in international markets:Below-market finance,”May 2021.21.Bernanke,B.“The Economic Outlook and Monetary Policy,”August 27,2010.22.C.f.Bernanke.B.(2010),“What the Fed did and why:supporting the recovery and sustaining price st

90、ability,”Washington Post and“Monetary Policy since the Onset of the Crisis,”August 31,2012.23.See literature review in Tawadros,G.and I.A.Moosa(2022),“A Structural Time Series Analysis of the Effect of Quantitative Easing on Stock Prices,”International Journal of Financial Studies.24.“Most Unicorn S

91、tartups Will Not Overcome Their Cumulative Losses,”July 2021.14technologies,but also fund losses for more than a decade as companies scale their customer base and revenue?Or will sobriety prevail,forcing these companies to accept a discipline that was absent among compatriots in cloud computing,fint

92、ech,and e-commerce during the QE era?This year is likely to see productivity gains as AI gets embraced more fully by businesses operating across the economy,25 but we may also get signs as to whether 2022-23 was a blip on the screen or a reversion to market conditions more recognizable to the audien

93、ce of Bernankes 2010 address.Figure 11.Source:Carlyle Analysis;SEC Data,Prof.Ritter,University of Florida,Layoffs.fyi,December 2023.There is no guarantee any trends will continue.Figure 12.Source:Carlyle Analysis;Preqin,Dealogic,December 2023.There is no guarantee any trends will continue.25.For ful

94、ler discussion on this point,see:https:/ 11.Swings in the Market for GrowthFigure 12.Exits&Capital Deployment in VC Markets11TRADE SECRET AND STRICTLY CONFIDENTIALTECH LAYOFFSIPOS WITH POSITIVE NET INCOME20.3%20.7%0%10%20%30%40%50%60%70%80%90%100%19801982198419861988199019921994199619982000200220042

95、00620082010201220142016201820202022Share of IPOs w/Positive TTM Net Income 050100150200250300050,000100,000150,000200,000250,000300,000350,000400,000Jan-22Mar-22May-22Jul-22Sep-22Nov-22Jan-23Mar-23May-23Jul-23Sep-23Tech Companies Announcing Layoffs Each MonthCumulative LayoffsTech Companies Announci

96、ng Layoffs Each MonthCumulative Layoffs12TRADE SECRET AND STRICTLY CONFIDENTIALVC CAPITAL DEPLOYMENT BY SECTORVC/GROWTH EXITS020406080100120140160Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22Jul-22Sep-22Nov-22Jan-23Mar-23May-23Jul-23Sep-23Q3-20-Q1-22 Average=10

97、0$0$10$20$30$40$50$60$70$80$90$100AIBlockchainCloudComputingE-CommerceFinTechHealthTechMobile AppsCleanTechCapital Deployment(Billions)20182019202020212022202315Economic and market views and forecasts reflect our judgment as of the date of this presentation and are subject to change without notice.I

98、n particular,forecasts are estimated,based on assumptions,and may change materially as economic and market conditions change.The Carlyle Group has no obligation to provide updates or changes to these forecasts.Certain information contained herein has been obtained from sources prepared by other part

99、ies,which in certain cases have not been updated through the date hereof.While such information is believed to be reliable for the purpose used herein,The Carlyle Group and its affiliates assume no responsibility for the accuracy,completeness or fairness of such information.References to particular

100、portfolio companies are not intended as,and should not be construed as,recommendations for any particular company,investment,or security.The investments described herein were not made by a single investment fund or other product and do not represent all of the investments purchased or sold by any fu

101、nd or product.This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.We are not soliciting any action based on this material.It is for the general information of clients of

102、 The Carlyle Group.It does not constitute a personal recommendation or take into account the particular investment objectives,financial situations,or needs of individual investors.Jason ThomasJason Thomas is the Head of Global Research&Investment Strategy at Carlyle,focusing on economic and statisti

103、cal analysis of Carlyle portfolio data,asset prices,and broader trends in the global economy.Prior to joining Carlyle,Mr.Thomas served on the White House staff as Special Assistant to the President and Director for Policy Development at the National Economic Council.In this capacity,Mr.Thomas acted

104、as the primary adviser to the President for public finance.HEAD OF GLOBAL RESEARCH&INVESTMENT STRATEGY received a BA from Claremont McKenna College and an MS and PhD in finance from George Washington University,where he studied as a Bank of America Foundation,Leo and Lillian Goodwin Foundation,and School of Business Fellow.Mr.Thomas has earned the chartered financial analyst designation and is a Financial Risk Manager certified by the Global Association of Risk Professionals.