The new leaders at the Carlyle Group, from left: Peter Clare, Kewsong Lee and Glenn Youngkin © FT montage; Reuters; company
The changing of the guard at Carlyle was revealed on Wednesday, as the founders stepped back in a rare public succession move for the private equity industry. Here is a closer look at the founders and the men who are set to replace them.
David Rubenstein
Co-chief executive, co-founder
The co-founder of Carlyle, Mr Rubenstein, 68, has helped shape the private equity industry in several fundamental ways.
For example, he turned the art of fundraising from an after-thought, something founders did every now and then, to a full-time obsession; he would go anywhere any time to meet potential investors.
Once he showed up in the Libyan Desert for the wedding of a figure close to the then Libyan Investment Authority, sure that by turning up when none of his rivals would bother, he would get lots of money for Carlyle funds, only to find his counterpart, Blackstone’s Steve Schwarzman had also made the trek.
The annual meetings in Washington for investors were the most sought after of any firm; both to hear Mr Rubenstein’s views and those of the most celebrated politicians on the planet.
For one such meeting he tried to rap, having employed a celebrity to master the art. He was told, “Mr Rubenstein, you are the whitest white man ever,” an anecdote he relished conveying — he was always self-deprecating in a world known for its large egos.
And while Mr Schwarzman was concerned about over-diversification, Mr Rubenstein was ready to start a new fund the moment a particular geography was hot. The company’s slogan “One Carlyle” was adopted precisely because the group was disorganised and lacked consistency; more a franchise than an integrated institution made up of people who had worked together over many years. Mr Rubenstein would hire a team to run the new fund, then, when they did not work out, he would as swiftly move to replace the failed managers.
Some of these efforts at diversification proved disastrous, such as several attempts to launch a hedge fund business to rival Blackstone’s fund of fund operation or Carlyle Capital. The latter was meant to manage the money investors committed to deals that had not yet been completed. Carlyle Capital went bust in March, 2008, one of the early casualties of the implosion of the mortgage-backed securities market.
Mr Rubenstein, while greedy for Carlyle, was never greedy for himself. He was disappointed that his peers never signed the manifesto of Bill Gates and Warren Buffett to give away most of their fortunes in their lifetime. His legacy will ultimately be his philanthropy more than Carlyle itself.
Bill Conway
Co-chief executive, co-founder
During the great tech bubble almost 20 years ago, Bill Conway, 68, co-founder of Carlyle, was on the board of a rather smart telecoms company. Concerned by the somewhat questionable practices, he quietly resigned, telling associates that “if I can’t stop these practices, at least I don’t have to legitimise them by being part of this company.”
Mr Conway has never sought the limelight but he has always been the assurance of integrity for Carlyle’s investors. As the chief investment officer of the company, he has been responsible for the fact that its flagship US funds have always boasted high returns. Before Carlyle listed and he was a (somewhat reluctant) participant in earnings calls, making his take on the markets more widely accessible, his annual investment letters to investors were highly sought after.
Daniel D’Aniello
Chairman, co-founder
Daniel D’Aniello may not be in the news as much as the other two founders but he has been the glue that kept them together for the past three decades. He has been in charge of running the day to day operations for most of those years with a focus on energy and real estate.
Raised by a single mother and his grandmother in rural Pennsylvania, he worked at a local fruit market at the age of 9. He had plans to join the navy, but health issues got in the way. Instead, Mr D’Aniello won a scholarship and attended Syracuse University and was in the gymnastics team there. He eventually served in the navy doing logistics before going to Harvard. The 71-year-old chairman of Carlyle has also been involved in a number of charities, most recently giving $20m away to American Enterprise Institute, a conservative think-tank.
At the time he said his donation came about because the institute’s thinking mirrored his own. He said: “It’s all about freedom, opportunity and enterprise.”
Kewsong Lee
Appointed co-chief executive
Cleaning up somebody else’s mess may not be the most glamorous job but in the case of Kewsong Lee it paid off.
A relative newcomer to Carlyle, Mr Lee, 52, was parachuted into the company to clean up its hedge fund. The US buyout fund took a multimillion dollar hit as a result of its exposure to commodities hedge fund manager Vermillion Asset Management in 2012. The following year, Mr Lee, who had been a lifer at rival Warburg Pincus, joined Carlyle to help unwind its entire exposure.
The Harvard graduate has also been instrumental in building Carlyle’s global credit business and has in recent years made key hires to enhance that business.
Since joining the company, the deputy chief investment officer of Carlyle’s corporate private equity segment and head of the global market strategies has been active in fundraising and investment activities. He has also served on several investment and credit committees with an active role in the strategic direction of the company.
Glenn Youngkin
Appointed co-chief executive
A 23-year veteran at Carlyle, the basketball-loving Glenn Youngkin has been the key man in building and growing some of the company’s key businesses as its president and chief operating officer.
Before taking on the role of president in 2014, Mr Youngkin, 50, has been at the company since his mid twenties in a number of roles, including head of the buyout business in the UK, global head of the industrial sector investment team and part of the US buyout team.
He has been responsible for developing Carlyle’s energy investment business, leading the acquisition of a $424m stake in NGP Energy Capital Management. He was also the key rainmaker in Carlyle’s acquisition of Dutch fund of funds AlpInvest.
More crucially, Mr Youngkin, who has long been hailed as a rising star at the group, stepped in as temporary chief financial officer in 2010 following the departure of Peter Nachtwey, who had been hired to spearhead preparations for Carlyle’s public listing. Since then Mr Youngkin was instrumental in taking the group public.
Before joining Carlyle, the Harvard graduate was a management consultant at McKinsey & Company. Earlier this year, Mr Youngkin -alongside Mr Lee — took on the additional roles. Mr Youngkin as overseer of the energy and natural resources group and Mr Lee as supervisor of the global market strategies.
Peter Clare
Appointed co-chief investment officer
The 52-year-old Peter Clare has been featured in multiple “ones to watch” lists of dealmakers and for a good reason.
He has been credited with building one of the best investment track records at Carlyle since joining in 1992. And from January next year he will wear the hat of Carlyle’s co-investment guru alongside founder Bill Conway.
Mr Clare is currently deputy chief investment officer of Carlyle’s corporate private equity segment and co-head of its $13bn US buyout fund. As a member of the group’s management committee Mr Clare has played a leading role in several of Carlyle’s most successful investments, including the acquisition of a number of aviation companies such as Texas-based supplier of aircraft parts Aviall and contractor United Defense Industries.
From 1999 to 2001, he was based in Hong Kong and led the opening of Carlyle’s operations in Asia. In 2001 and 2002, he launched Carlyle’s initial investments in distressed debt, which led to the creation of Carlyle Strategic Partners. From 2004 to 2011, he was the global head of the aerospace and defence. Before joining Carlyle, the Wharton school graduate was with First City Capital Corporation and the Merchant Banking Group of Prudential-Bache.
This article has been amended since original publication to remove a reference to Bill Conway’s retirement plans.
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