may 2018 presentation to fresno county employees

STRICTLY CONFIDENTIAL

PRESENTATION TO

FRESNO COUNTY

EMPLOYEES’ RETIREMENT

ASSOCIATION (“FCERA”)

MAY 2018

NOTE: ALL DATA CONTAINED HEREIN IS AS OF

DECEMBER 31, 2017, UNLESS OTHERWISE NOTED.

T R A D E S E C R E T A N D S T R I C T L Y C O N F I D E N T I A L

Disclaimer and Forward-Looking Statement

This presentation (the “Presentation”) has been prepared by Carlyle Global Credit Investment Management L.L.C. (“CGCIM”) and AlpInvest Partners B.V. (“AlpInvest” and, together with CGCIM, each an “Investment

Adviser”) and may only be used for informational purposes only. The information contained herein may not be used, reproduced, referenced, quoted, linked by website, or distributed to others, in whole or in part, except

as agreed in writing by each Investment Adviser.

This Presentation provides an overview of information relating to certain funds or accounts managed by CGCIM and AlpInvest is not intended to be taken by, and should not be taken by, any individual recipient as

investment advice, a recommendation to buy, hold or sell, or an offer to sell or a solicitation of offers to purchase, any securities that may be issued by a fund or account managed by CGCIM or AlpInvest, or as legal,

accounting or tax advice. An investment in securities of the type described herein presents certain risks. Any offer or solicitation to buy securities or interests in any fund or investment account managed by an

Investment Adviser (“Mandate”) is made only through the Mandate’s governing and/or offering documents (the “Governing Documents”). The information contained in this Presentation is superseded by, and is qualified

in its entirety by the Governing Documents.

Certain information contained in this Presentation may be non-public, proprietary and confidential information. This Presentation may contain confidential and/or material non-public information, which may restrict the

recipient from initiating transactions in certain securities. By accepting this Presentation, the recipient agrees that it and all of its representatives and advisors will maintain such information in strict confidence and that

the recipient will not be free to act upon any such material non-public information contained herein. This Presentation and the information contained herein may not be reproduced, redistributed in any format, or

disclosed to third parties without each Investment Adviser’s express prior written consent.

Neither Investment Adviser makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein. Certain information contained herein has been obtained

from published and non-published sources prepared by third parties. While such information is believed to be reliable, neither Investment Adviser assumes any responsibility for the accuracy or completeness of the

information, which is based on matters as they exist as of the date of this Presentation and not as of any future date.

Certain statements contained in this Presentation are based on current expectations, estimates, projections, opinions, and/or beliefs constitute “forward-looking statements,” which can be identified by the use of

forward-looking terminology such as “may,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “target,” or “believe” or comparable terminology. No representation or warranty is made with respect to such statements

and future events may differ materially from those reflected or contemplated in such statements. As a result, investors should not rely on such forward-looking statements in making their investment decisions.

An investment in a Mandate entails a high degree of risk and no assurance can be given that a Mandate’s investment objective will be achieved or that investors will receive a return on their capital. Each investor should

consult its own legal, accounting and tax advisors as to the legal, business, tax and related matters concerning the information contained in this Presentation in order to make an independent determination and

consequences of a potential investment in a Mandate, including federal, state, local and foreign tax consequences. Past performance is not necessarily indicative of future results, and there can be no assurance that a

Mandate will achieve comparable results, or that a Mandate will be able to implement its investment strategy or achieve its investment objective. Please see the Risk Factors set forth in the applicable Governing

Documents.

Information throughout the Presentation provided by sources other than each Investment Adviser (including information relating to portfolio companies or other investments) has not been independently verified and,

accordingly, neither Investment Adviser makes no representation or warranty in respect of this information.

The following slides contain summaries of certain financial and statistical information about certain funds or accounts managed by CGCIM and AlpInvest . The information contained in this Presentation is summary

information that is intended to be considered in the context of the Governing Documents and reports provided to investors in connection with a Mandate. We undertake no duty or obligation to publicly update or

revise the information contained in this Presentation.

CGCIM is an SEC-registered investment adviser and a wholly owned subsidiary of The Carlyle Group L.P. (together with its affiliates, “Carlyle”). AlpInvest is an SEC-registered investment adviser an affiliate of CGCIM and

Carlyle. An information barrier has been erected between AlpInvest and the rest of Carlyle (including CGCIM) that restricts certain information from being shared, including information regarding AlpInvest portfolio

investment decisions. All investment programs managed by AlpInvest are intended to operate in accordance with the information barrier protocols and supplemental compliance procedures specific to Carlyle’s

Investment Solutions business segment of which AlpInvest is a part.

This Presentation contains information about the historical performance of certain Mandates. You should not view information related to the past performance of a Mandate as indicative of the Mandate’s future results,

the achievement of which is dependent on many factors, many of which are beyond the control of the Investment Adviser and cannot be assured. There can be no assurances that future dividends will match or exceed

historic rates or will be made at all. Further, an investment in a Mandate is discrete from, and does not represent an interest in, any other Carlyle entity. Nothing contained herein shall be relied upon as a promise or

representation whether as to the past or future performance of a Mandate or any other Carlyle entity.

2


Table of Contents

I. Executive Summary

II. Private Credit Overview

i. Why Private Credit

ii. Why Carlyle Direct Lending

III. FCERA Direct Lending Managed Account Program

IV. FCERA AlpInvest Managed Account Program

V. Summary & Considerations

3


Note: As of December 31, 2017. AUM numbers may not sum to total due to rounding. Past performance is not necessarily indicative of future results.

(1) Amount of unspent commitments to Carlyle investment funds. (2) Includes four Energy & Power and Renewable funds jointly advised with Riverstone Investment Group, L.L.C. and eight funds

advised by NGP Energy Capital Management. (3) Comprised of loans & structured credit, energy credit (Carlyle Energy Mezzanine Opportunities Fund), distressed credit (Carlyle Strategic Partners),

opportunistic credit (Carlyle Credit Opportunities Fund), TCG BDC, and Carlyle Mezzanine Partners invested capital. 4

Established in Washington, D.C. in 1987, Carlyle is one of the world’s largest and most diversified multi-

product global alternative asset management firms:

The Carlyle Group Overview

AUM $195 Billion Total

Active Investment

Vehicles 317 Investment Vehicles

Dry Powder1 $70 Billion

Active Investments275+ Active Portfolio Companies

300+ Active Real Estate Investments

Offices31 Offices

19 Countries

Employees1,600+ Employees Including

650+ Investment Professionals

Investors 1,750+ Active Carry Fund Investors From

83 Countries

Overall Platform Operating Segments

Global Credit3

$33 Billion

AUM58 Funds

Investment

Solutions

$46 Billion

AUM

197 Fund of

Funds Vehicles

Corporate Private

Equity

$73 Billion

AUM33 Funds

Real Assets

$43 Billion

AUM29 Funds2


Carlyle Global Credit Investment Platform

Note: As of December 31, 2017 unless otherwise stated. Not included in the count are Fundraising, Legal, Finance, Operations and Risk Management professionals.

(1) AUM includes $14.4 billion AUM in U.S. Structured Credit, $6.7 billion in European Structured Credit and $0.5 billion in other structured credit. (2) Not reflective of AUM ($2.9Bn as of December

31, 2017). Reflects total capital accessible to Carlyle Direct Lending in the form of current net asset value of our portfolio, equity contributions in strategic partnerships, joint ventures and managed

accounts, as well as committed financing facilities and structured CLOs. Specifically, the figure includes total Net Asset Value of TCG BDC, Inc. as of December 31, 2017, capital commitments to TCG

BDC II, Inc., Carlyle Mezzanine Partners invested capital, third party capital commitments to the Carlyle Unitranche Program, third-party capital commitments to Middle Market Credit Fund, LLC,

capacity provided under the Middle Market Credit Fund CLO, and third-party capital commitments to separately managed accounts, plus the committed financing facilities to TCG BDC, Inc., TCG

BDC II, Inc., Middle Market Credit Fund, LLC, and separately managed accounts. (3) Represents the amount of committed capital Carlyle Credit Opportunities Fund (“CCOF”) will target to raise.

Carlyle Global Credit100+ Credit-Focused Investment Professionals

Private Credit

Solutions

$2.0Bn3

Opportunistic Credit

$3.4Bn

Distressed &

Special Situations

Distressed-for-Control

Debt and Equity

$4.7Bn

Energy Credit

Debt & Equity of

Energy-Related Assets

$5.2Bn2

Direct Lending

Unitranche Loans

Subordinated Debt

Second Lien Loans

First Lien Loans

5

$21.6Bn1

Loans & Structured

Credit

Carlyle Structured

Credit Fund

U.S. and European

Syndicated Loans

Origination Team

Credit Trading Team

Liability Management Team

Workouts Team

Credit Industry Research Team

Energy &

Commodities

Technology, Media,

& TelecomIndustrials

Defense & Business

ServicesConsumer Healthcare

Special Situations

Market Dislocations


Carlyle Investment Solutions Platform

6

Private Market Solutions

Capabilities across primary, secondary and co-investment strategies

Investment Solutions $46B AUMResponsible for asset allocation, portfolio construction, and performance

Global Sector and Investment Strategy TeamsResponsible for manager research, due diligence, oversight and analysis

Private Equity Strategies

U.S. & European Leveraged Buyout

U.S. & European Middle Market

Global Emerging Markets

Mezzanine / Private Debt

Venture Capital

Co-Investments / Secondaries

Real Assets (Energy & Real Estate) Strategies

Real Estate Value-Added

Real Estate Opportunistic

Energy

Real Estate Debt

Co-Investments / Secondaries

Broader Carlyle Investment Platform

Source: Carlyle Investment Solutions. Information is as of December 31, 2017.

Note: Provided for informational purposes only and should not be considered a recommendation of any particular security or investment.

A leading global alternatives investor with $46 billion of AUM focused on private market strategies

Integrated set of multi-alternative capabilities can help support robust deal flow and sourcing capabilities across the entire

platform to be able to provide what we believe are the most attractive opportunities for our managed account clients


Note: For illustrative purposes only. (1) There can be no guarantee that any fund’s portfolio will include all of the target assets. (2) Senior secured dollar one unitranche loans combine typical senior and

junior financing into one tranche. (3) Includes first lien last out unitranche loans, second lien term loans

Overview of FCERA Private Credit Managed Account

7

Direct Lending ProgramCarlyle Global Credit – Carlyle Direct Lending (“CDL”)

Value-Added Features of Managed Account Program

Third Party Private Credit ProgramCarlyle Investment Solutions – AlpInvest

Leading Investment Capabilities

Capital Call Efficiency

Aggregated and Enhanced

Reporting of Investments

Portfolio Management

of New Investments

Cost Effective Program Structure Reduce Administration Burden

(i.e. tax, audit, valuation)

TCG BDC II, Inc.

Commingled Fund

Target Assets1:

• First Lien Senior Secured

• Dollar-One Unitranche2

• First Lien Last Out (Unitranche)

• Second Lien Senior Secured

• Subordinated Debt / Other

Commitment: $150MM

Leverage: ~1.0x Debt-to-Equity

FCERA Managed Account Program

CPC V, L.P.

SMA

Target Assets1:

• First Lien Senior Secured & Dollar-

One Unitranche2 (95%)

• Other3 (5%)

Commitment: $150MM

Leverage: ~0.5x Debt-to-Equity

Highly diversified private credit portfolio universe with a focus on first lien senior secured assets

Broad origination platform with enhanced credit underwriting expertise and track record of very limited defaults

SMA with Carlyle Direct Lending creates fee efficiency across the entire managed account program

Diversification through AlpInvest’s ability to access high quality global mezzanine funds that have historically outperformed the market

Primary Fund Investments

SMA

Target Assets1:

• Managers focused on Mezzanine and Subordinated Debt Investments

• Securities can also include:

• HoldCo Notes

• Uni-tranche securities

Commitment: $100MM

Leverage: None


Key Program Milestones

FCERA Private Credit Managed Account Timeline

The FCERA Managed Account is currently being invested, with the CDL portion of the account ~14%

called and the AlpInvest portion of the account 50% allocated and ~7% called as of March 31, 2018

8

August 2016

RFP Submitted

February 2017

FCERA Mandate Awarded

October 2017

AlpInvest Commitment Signed

Began investing in TCG BDC II, Inc.

The FCERA Private Credit Managed Account is collectively ~12% called through March 31, 2018

CDL has collectively called $42MM of $300MM commitment as of March 31, 2018, which represents 25 individual loans

To date, AlpInvest has committed to two managers on FCERA’s behalf representing ~50% of their $100MM account

AlpInvest has called ~7% of commitments to date

December 2016

Board PresentationSeptember 2017

TCG BDC II, Inc. Commitment Signed

CPC V, L.P. Commitment Signed

November 2017

Commitment to

Mezzanine Fund III

Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q1 2018Q4 2017

January 2018

Commitment to

Mezzanine Fund I

December 2017

Began investing in CPC V, L.P.


Table of Contents








9


Carlyle Global Credit Edge

10

Performance Solutions Scale Growth

• Capture excess risk-

adjusted returns by

investing across the

universe of credit products,

throughout the capital

structure and through

credit cycles

• Deliver consistent

outperformance, at scale,

while prudently managing

downside risk

• Capitalize on periodic

dislocations to generate

outstanding total returns

• Deliver complete

financing solutions to

corporations and

financial sponsors across

sectors and geographies

• Develop differentiated

proprietary deal flow

through consistent, direct

dialogue with borrowers

and integration with

Carlyle’s global

investment network

• Deploy capital at

significant scale across

investment strategies,

leveraging resources

across the credit platform

• Meet the demands of

limited partners who

seek a wide breadth of

investment opportunities

while deploying capital

through a limited

number of asset

managers

• Organically grow existing

strategies by increasing

limited partner

relationships, leveraging

the knowledge base of

the credit team, and

capturing market share

• Pursue new investment

strategies that can

achieve scale and will

benefit from the Carlyle

platform, lead by

experienced investors

A leading global alternative credit platform that captures excess risk-adjusted returns and capitalizes

on market dislocations across credit markets on behalf of our limited partners


Multiple Flavors of Direct Lending

11Note: For illustrative purposes only. Not intended as an exhaustive list of factors to consider in determining a private credit strategy.

There are several varieties of direct lending and risk profiles can vary

significantly depending on the investment strategy:

Carlyle Investment Strategy

CDL believes its strategy to be lower risk than the vast

majority of other managers

VS. Concentrated PortfoliosHighly Diversified

VS. Cyclical CreditsNon-Cyclical Credits

VS. High LTV LoansLow LTV Loans

VS. Non-Sponsored LoansSponsored Loans

VS. “Storied” Credits“Healthy” Credits

VS. Unsecured LoansSenior Secured Loans

VS.Originated Loans Participation Loans


$4 $6$29

$50

$81

$132$151

$113

$0

$50

$100

$150

$200

2010 2011 2012 2013 2014 2015 2016 YTD1Q17

Uninvested U.S. PE Capital by Vintage

2010-1Q17 PE Capital to Deploy: $566Bn

2017-2023 MM Loan

Maturities: $595Bn

($ in Bn)

Middle Market Loan Maturities

($ in Bn)

Significant Demand for Middle Market Loans from Non-Bank Lenders

(1) No assurance is given that such demand will continue. Sources: Uninvested U.S. PE Capital by Vintage from Pitchbook 2017 PE & VC Fundraising & Capital Overhang Report; Total Middle Market

Maturities for U.S. (Sponsored and Non-Sponsored) from Thompson Reuters LPC, as of December 31, 2017; Primary Market for Leveraged Loans by Type from LCD Leveraged Lending Review – 4Q

2017.

Demand for middle market financing continues to experience growth driven by significant PE dry powder

and upcoming loan maturities1, while global and regional banks have progressively exited the middle

market leveraged loan space, thereby presenting a significant opportunity for alternative lenders

Primary Market for Highly Leveraged Loans by

Broad Type

12

$96.2

$114.6 $117.3 $122.8$115.3

$28.2

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

2018E 2019E 2020E 2021E 2022E 2023E

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1994 1999 2004 2009 2012 2015 2016 2017

US Banks Finance Co. Non-US Banks Institutional Investor Securities Firm


Favorable Default and Recovery Rates

Middle market loan cumulative default rate of 7.6% with

recovery rate of 87%, compared to 10.8% and 82%,

respectively, for broadly syndicated loans3

Well Positioned to Capitalize on Middle Market Opportunity

Note: As of December 31, 2017, unless otherwise noted. No assurance is given that the referenced opportunities, trends, or environment will continue. (1) Refers to all operating companies in the

U.S. by revenue generating $20-1,000 million in revenue. Industry criteria includes Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Healthcare, Banks, Diversified Financials,

Insurance and Utilities. Source: S&P CapIQ. (2) Includes all transactions $50 million or greater announced by U.S. private equity sponsors between January 1, 2006 and December 31, 2017. Source:

S&P CapIQ. (3) Standard & Poor’s LCD; 1995-2015.

Middle Market Opportunity How CDL Addresses the Opportunity

Flexible product offerings

Solution provider across the

capital structure

Broad sponsor coverage &

direct origination platform

Disciplined underwriting

Experienced investment team

Largest Target Market

95% of U.S. companies are in the middle market1

72% of transaction volume occurs in the middle market2

Technical Benefits

Illiquidity Premium vs. Public Credit

Floating Rate

Lower Volatility

Greater Downside Protection

Covenanted Deals

Significant Access to Diligence

More conservative capital structures

13


Note: No assurance is given that the Company will invest in any or all of the illustrative structures referenced above. Provided for informational purposes only; not intended as an exhaustive list of

illustrative structures.

Illustrative Capital Structure of Borrower

Substantial downside protection with LTV typically 30-50%

Total Enterprise Value: 10.00x EBITDA

Mu

ltip

le o

f EB

ITD

A

14

0.00x

1.00x

2.00x

3.00x

4.00x

5.00x

6.00x

7.00x

8.00x

9.00x

10.00x

Cash Equity Invested by PE Firm

5.00x

First Lien Senior Secured Loan

3.50x

Second Lien Senior Secured Loan / Mezzanine Debt

1.50x


Table of Contents








15


Key Investment Highlights

As of December 31, 2017. Communications between investment professionals of the Investment Adviser, Direct Lending, and the CGC platform, on the one hand, and other Carlyle private equity,

investment solutions, and real estate investment professionals, on the other hand, are subject to certain restrictions as set forth in the applicable information barrier policies and procedures. (1)

References to Operating Executives refers collectively to Carlyle Operating Executives, Senior Advisors, Operating Advisors and other consultants who are involved in portfolio company value

creation. Operating Executives are consultants who are not considered Carlyle personnel. 16

Strategic Relationships

Expands origination platform & product

offerings

Provides significant scale & full solution offering

Access to more deal flow

Alignment of Interests

Significant Carlyle commitment to TCG BDC II,

Inc. (lesser of $45 million or 3% of commitments)

Attractive fee structure (fees on drawn equity

only; fees not charged on uncalled capital or

leverage)

One Carlyle Advantages

Access to broader Carlyle platform & expertise

Proprietary economic research and sector data

43 in-house Operating Executives1

Scaled Investment Platform

Scale facilitates enhanced economics & terms

Allows investments across the entire capital

structure and large hold sizes

Experienced Investment Team

Investment Committee with average 22 years of

industry experience

29 dedicated investment professionals with

support from 13 U.S. industry research analysts

Market Leading Direct Origination Platform

Broad national coverage with offices in New

York, Chicago, and Los Angeles

Direct coverage of 200+ private equity firms &

150+ lenders

1

2

3

4

5

6


Portfolio Summary – TCG BDC II, Inc. & CPC V, L.P.

(1) Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of period end. Actual yields earned over the life of each

investment could differ materially from the yields presented above. Combined yield is calculated using portfolio yields prorated by portfolio fair value. (2) Investments and commitments for TCG

BDC II, Inc. are prorated to reflect FCERA’s ownership percentage as of March, 31, 2018. Charts shown are based on FCERA’s prorated ownership in the combined portfolio of TCG BDC II, Inc. and

CPC V, L.P. 17

As of March 31, 2018 (Unaudited, subject to change)

0.4%

22.9%

76.7%

Portfolio Characteristics Diversification by Borrower2

Asset Mix2 Industry2

Top 10 Investments Next 10 Investments Remaining Investments

First Lien Debt Second Lien Debt Equity

(Dollar amounts in millions)TCG BDC II2 CPC V Combined

Total Equity Called $24.3 $18.0 $42.3

Total Investments and Commitments $43.1 $33.9 $77.0

Unfunded Commitments $8.9 $13.4 $22.3

Investments at Fair Value $34.2 $20.5 $54.7

Yield at Fair Value of Investments1 9.25% 8.33% 8.91%

Number of Investments 19 9 25

Number of Portfolio Companies 17 9 23

Floating / Fixed 100% / 0% 100% / 0% 100% / 0%

72%

27%

2%

16%

4%

12%12%

11%

11%

3%

25%

Capital Equipment

Forest Products & PaperHotel, Gaming & Leisure

Financial Services

Non-durable GoodsHigh Tech Business Services

Consumer ServicesSoftwareHealthcare & Pharma


($ in MM) TCG BDC

Total Investments & Commitments $2,086

Unfunded Commitments $118

Investments at Fair Value $1,968

WA Yield at Cost of Investments2 8.86%

WA Yield at Fair Value of Investments2 8.90%

Number of Active Investments 107

Fair Value of Non-Accruals $19

Note: As of December 31, 2017, unless otherwise noted. (1) Reflects TCG BDC only. The Company commenced operations in September 2017 and, as of December 31, 2017, has not yet reached a

scale we believe to be representative of the strategy. The Company’s portfolio characteristics may differ materially from those shown here. (2) Weighted average yields include the effect of accretion

of discounts and amortization of premiums and are based on interest rates as of December 31, 2017. Actual yields earned over the life of each investment could differ materially from the yields

presented above. Weighted average yields for TCG BDC do not include TCG BDC’s investment in MMCF. Includes impact of the NF acquisition. (3) Inception is May 2, 2013, the date of TCG BDC’s

initial closing of its private offering. Includes capital deployed by TCG BDC, and excludes duplicative capital deployed by TCG BDC as part of its acquisition of NF (June 9, 2017).

Top 10

Investments

21%

Remaining 82

Investments

46%

Next 11 – 25

Investments

23%

MMCF

10%

Diversification by Borrower Asset Mix Industry

As of December 31, 20171

$4.1BnCapital Deployed Since Inception3

0.4%Annualized Default Rate

78%First Lien Assets

~30Portfolio Industries

18

First Lien Debt

65.7%

First Lien Last Out

12.1%

Second Lien Debt

12.5%

Investment Fund

8.8%

Equity

0.9%

Healthcare &

Pharmaceuticals

12%

High Tech Industries

9%

Business Services

9%

Banking, Finance,

Insurance & Real Estate

9%

Investment Fund

(MMCF)

9%

Consumer Services

6%

Transportation: Cargo

4%

Telecommunications

4%

Aerospace & Defense

3%

Durable Consumer

Goods

3%

Other (18 Industries)

31%

Portfolio Summary – TCG BDC I, Inc.


Liabilities Management

Brokerage Committee

Valuation Committee

Risk Management

Prudent Risk Management Process

Note: For illustrative purposes only; may be subject to change.

Formal quarterly portfolio reviews consisting of individual credit analysis,

and detailed portfolio construction and risk monitoring

Proprietary credit surveillance report to monitor investment

performance

Broad participation includes Investment Committee, Origination,

Underwriting and Portfolio Management

Monthly watchlist reviews focus on all credits downgraded on our internal

risk ratings scale

Quarterly risk review focused on technical analysis of migration of financial

performance and portfolio diversification

Weekly portfolio dashboard focused on exposure by issuer, industry, ratings

and other risk factors

Weekly portfolio leverage and compliance dashboard focused on

projected asset coverage and non-qualifying asset tests

Dedicated workout function to maximize recovery

Robust internal compliance controls and dedicated officer

Multiple layers of checks and balances throughout underwriting

process

Ad Hoc Analysis and Projects led by Chief Risk Officer

Multiple layers of risk review and

oversight

Business continuity plan designed

to allow all critical business

functions to continue in efficiently

in the event of an emergency

Risk Governance

Investment

Committee

Active Risk Management

19


Regular Independent Valuation

Sound valuation framework exercises rigorous oversight including both internal and external

independent review

Valuation Process

Third-Party Valuation Advisor

Reviews the Audit Committee

valuation recommendation

Determines the fair value of the

investment in the portfolio based

on the input of both the investment

team and the third-party valuation

advisor

Board of Directors1

Reviews the assessments of the

Investment Adviser and the third-

party valuation firm

Provides Board of Directors with

recommendation

Audit Committee1

Initially reviewed by both

investment professionals and

finance team

Valuation conclusions documented

and reviewed by a valuation

committee comprised of members

of our senior management

Valuation Committee

In accordance with the valuation policy, portions of middle market loan and equity portfolio are reviewed by a third party

specialist quarterly

• Each loan and equity investment is reviewed at least once on a rolling 12 month basis

Lincoln Partners has been engaged by the Board of Directors to perform third-party review

• Meets with the Audit Committee to discuss valuation methodology and analysis, and provide industry observations

• Conclusion communicated via a formal report to the Audit Committee

Note: For illustrative purposes only; may be subject to change. (1) Applies to TCG BDC II, Inc. only; however, the proposed program will benefit from these committees being in place. 20


As of March 31, 2018, the weighted average Internal Risk Rating of our debt investment portfolios for TCG BDC II, Inc. and CPC V, L.P. was 2.0 and 1.9,

respectively. As of March 31, 2018, none of our investments were assigned an Internal Risk Rating of 4-6 and no investments in the portfolio were on

non-accrual status. All of our first and second lien debt investments were performing and current on their interest payments as of March 31, 2018.

Credit Quality of Investments

21

Rating Definition

1 Performing – Low Risk: Borrower is operating more than 10% ahead of the Base Case

2 Performing – Stable Risk: Borrower is operating within 10% of the Base Case (above or below). This is the initial rating assigned to all new borrowers

3Performing – Management Notice: Borrower is operating more than 10% below the Base Case. A financial covenant default may have occurred, but

there is a low risk of payment default

4Watch List: Borrower is operating more than 20% below the Base Case and there is a high risk of covenant default, or it may have already occurred.

Payments are current although subject to greater uncertainty, and there is moderate to high risk of payment default

5Watch List – Possible Loss: Borrower is operating more than 30% below the Base Case. At the current level of operations and financial condition, the

borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or may

have occurred. Loss of principal is possible

6

Watch List – Probable Loss: Borrower is operating more than 40% below the Base Case, and at the current level of operations and financial condition,

the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or

may have already occurred. Additionally, the prospects for improvement in the borrower’s situation are sufficiently negative that impairment of some or all

principal is probable

Portfolio Risk Ratings – TCG BDC II, Inc.

(Dollar amounts in millions) March 31, 2018

Internal Risk Rating Fair Value % of Fair Value

1 - 0.00%

2 34.2 100.00%

3 - 0.00%

4 - 0.00%

5 - 0.00%

6 - 0.00%

Total 34.2 100.00%

Portfolio Risk Ratings – CPC V, L.P.

(Dollar amounts in millions) March 31, 2018

Internal Risk Rating Fair Value % of Fair Value

1 2.4 11.54%

2 18.1 88.46%

3 - 0.00%

4 - 0.00%

5 - 0.00%

6 - 0.00%

Total 20.5 100.00%

(1) Investments and commitments for TCG BDC II, Inc. are prorated to reflect FCERA’s ownership percentage as of March, 31, 2018. Charts shown are based on FCERA’s prorated ownership in the

combined portfolio of TCG BDC II, Inc. and CPC V, L.P.


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22


AlpInvest Private Credit Fund Program

Note: As of April 2018. For illustrative purposes only. There can be no assurance that AlpInvest will be able to achieve any portfolio construction objectives. AlpInvest may adjust its target allocations

at different times based on market conditions as it deems appropriate. Diversification does not eliminate the risk of loss. 23

$100 million commitment

Target funds primarily focused on mezzanine and other subordinated debt

investments globally

Target 4-5 funds; equally sized commitments of 20-25%

Without prior approval, will not commit to any Carlyle Fund or invest over 30-35% in

any one investment

Portfolio

Components

Selection

Sponsor Composition: Focus on high-quality managers that invest in mezzanine or

subordinated debt like securities with some form of additional equity participation, or

opportunistic credit strategies

Geography: Primary focus on North America and Europe focused funds

Industry: Generalist focus with limited exposure to sector specific funds

Current Program

Three-year investment period starting October 26, 2017

~50% committed and ~7% invested as of March 31, 2018 through two

commitments

Mezzanine Fund III (2017 vintage), and Mezzanine Fund I (2018 vintage)

Currently evaluating a number of additional managers in North America and Europe


Systematic Primary Fund Sourcing Strategy to Ensure Full Visibility for FCERA

24Note: Information as of April 2018. For illustrative purposes only and subject to change. There is no assurance that AlpInvest will be able to make any investment in its pipeline or that any such

investment will be successful. (1) Source Preqin (accessed 04/23/18). Please note amount raised in USD, sample size includes all US and EU funds raised from 2013 through March 31, 2018.

AlpInvest seeks to have full visibility on the institutional quality mezzanine fund universe and fundraising

calendar

Mezzanine Landscape Map Mezzanine Fundraising (Last 5 years)1

Timing Key

2018

2019

2020+

Systematic, pro-active sourcing strategy led by senior team members

Seek full visibility on universe of institutional quality mezzanine and private debt investment opportunities

Proprietary database of sponsors by segment and geography, tracking full set of opportunities

Secure desired access through pro-active relationship building

Pro-actively and systematically target “must have sponsors”

Private Credit landscape maps are updated semi-annually by the team

79%

21%

% of Capital Raised, by Geography

US Europe

80%

10%

10%

# of Funds, by Fund Size

<$500mm $500mm-1Bn >$1Bn


Mezzanine Fund Commitment Case Studies

Note: Case studies are intended to provide examples of the types of transactions AlpInvest pursues and do not represent all investments made AlpInvest or the outcomes achieved. Investment

rationales and other considerations are based on AlpInvest’s internal analysis and views as of the date of the investment commitment and will not be updated. References to a particular investment

should not be considered a recommendation of any security or investment. There can be no assurance that AlpInvest will be able to invest in similar opportunities in the future. 25

Highlights

Attractive history with limited losses and consistent equity

performance

Favorable LP terms similar to other captive mezzanine funds

Immediate capital deployment and interest payments

AlpInvest had an existing relationship with the GP

AlpInvest conducted an on-site due diligence session and completed

extensive analysis of the firm’s representative mezzanine track record

During diligence we focused on the interaction with the GP’s equity

funds and potential conflicts given the fund’s captive strategy

Geography: U.S.

Strategy

Captive mezzanine fund investing

alongside the GP’s equity funds, targeting

middle-market companies in North

America

Target SecuritiesGP primarily seeks debt securities with

minority equity exposure

Investment professionals 25 professionals (at the equity sponsor)

Mezzanine Fund III (Q4 2017 Close)

Investment Rationale

Highlights

Consistent and attractive investment strategy through market cycles

Strong absolute and relative track record with limited losses

Stable and experienced senior team with no turnover

The opportunity was sourced through ongoing market outreach

AlpInvest conducted multiple on-site due diligence sessions,

completed unrealized portfolio analysis, and made numerous

reference calls

During diligence we focused on the historic and unrealized track

record and the GP’s sponsor network and sourcing approach

Geography: U.S.

Strategy

Mezzanine investor targeting sponsor-

backed lower middle-market companies in

North America

Target SecuritiesGP primarily seeks debt securities with

minority equity exposure

Investment professionals 12 professionals

Mezzanine Fund I (Q1 2018 Close)

Investment Rationale


2019 FCERA Forward-Looking Pipeline

Note: For illustrative purposes only and subject to change. No assurance can be given that any pending transaction or other identified investment opportunity will be consummated within the

expected time frame, or at all. References to a particular investment should not be considered a recommendation of any security or investment. There can be no assurance that AlpInvest will be able

to invest in similar opportunities in the future. (1) Estimated fund size in local currency. (2) Refers to AlpInvest’s relationship with the GP across primary, secondary, and co-investment deal teams. 26

2019 FCERA Pipeline

Fund NameAnticipated Fund

Size (mm)1 Geography Transaction Type Security Types AIP Relationship2

Fund A 7,500 Global Mixed Debt Oriented

Fund B 5,000 Global Sponsored Debt Oriented

Fund C 2,000 US Mixed Debt Oriented

Fund D 1,500 Europe Sponsored Debt Oriented

Fund E 1,400 US Sponsored Debt Oriented

Fund F 1,200 US Non-Sponsored Equity Oriented

Fund G 1,200 US Mixed Opportunistic

Fund H 900 US Sponsored Equity Oriented

Fund I 700 US Mixed Opportunistic

Fund J 650 US Sponsored Debt Oriented

Fund K 500 Europe Non-Sponsored Mixed

Fund L 500 US Mixed Mixed

Fund M 400 US Mixed Mixed

Fund N 400 US Non-Sponsored Mixed

Fund O 300 Europe Sponsored Debt Oriented

Key: AIP Relationship with Sponsor

Reviewed transaction

Reviewed / Closed transaction


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27


Summary & Considerations

28

The FCERA Private Credit Managed Account is in the early days of its

investment period

Carlyle and FCERA are working together on FCERA’s Legacy Private Credit

Portfolio to roll-up performance and cash-flow monitoring

AlpInvest is currently handling all new in-bound third party non-Carlyle private

credit managers as directed by FCERA staff

FCERA may consider (over following 6-12 months) how it will work with its

legacy private credit managers going forward, and continue to allocate to the

private credit space in order to achieve and maintain its asset allocation target