Thirty years after The Carlyle Group was formed, the buyout giant has announced that co-founders David Rubenstein and William Conway will step away from their positions as co-CEOs at the end of the year, becoming the latest major PE shop to publicly reveal a plan of succession. Glenn Youngkin and Kewsong Lee will take over as co-CEOs, with Rubenstein and Conway becoming co-executive chairmen of the firm’s board.
Youngkin, 50, is currently Carlyle's president and COO. He's worked at the firm for 23 years, previously leading the industrials team and both the US and UK buyout units. Lee, 52, joined Carlyle in 2013. He's currently the head of the firm's global market strategies credit arm and a deputy CIO in the corporate private equity unit.
In additional personnel shifts, Conway will give up his duties as sole CIO, taking a co-CIO role alongside newly promoted Peter Clare, a 25-year Carlyle veteran who currently works alongside Lee as a deputy CIO of the corporate PE unit. Clare will also join the firm's board of directors alongside Youngkin and Lee. Current Carlyle chairman and firm co-founder Daniel D'Aniello, meanwhile, will become chairman emeritus.
The news comes more than three months after KKR announced the choice of Joe Bae and Scott Nuttall to assume control of daily operations from firm founders Henry Kravis and George Roberts. With many of the world's largest buyout shops now entering their third or fourth decades, the question of who will take control of their multibillion-dollar portfolios has increasingly been raised—and, in many cases, answered.
Rubenstein and Conway have shepherded Carlyle to a remarkable run during their three decades of leadership. After closing its first buyout fund on $100 million in 1990, the firm now claims around $162 billion in AUM, employing more than 1,500 people across six continents.
Once known mainly for its work in the defense sector—and its connections to political luminaries like George H.W. Bush and former US Secretary of Defense Frank Carlucci—the Carlyle name is now ubiquitous in every facet of private equity and asset management. Since the start of 2015, the firm has completed 248 private equity investments, according to the PitchBook Platform, third-most of any PE firm in the US.
Already a prolific investor, Carlyle has gone to new heights in recent years, completing a decade-most 93 investments in 2015 and following it up with 92 transactions last year. Here's a full look at the firm's recent annual activity:
And those deals have occurred in every corner of the world. While nearly 50% of Carlyle's activity in the past 10 years has been in the US and another 32% of its targets have been European, the firm has also completed more than 15 deals each in Canada, Oceania, South America and Asia.
So far in 2017, Carlyle's 63 completed investments include the $2.08 billion takeover of the McDonald's China business alongside CITIC Capital and an investment in streetwear provider Supreme that valued the company at $1 billion. In recent years, the firm has been rather averse to the mega-deal: Since the start of 2011, only four of its investments have been $4 billion or larger, per PitchBook data. But Carlyle is still gathering ever-larger pools of capital. The firm is currently seeking $15 billion in commitments for its latest vehicle, per a Bloomberg report from July.
That's what The Carlyle Group is today. What the firm will look like in the future is now up to Youngkin and Lee.
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*David Rubenstein image from the World Economic Forum in Davos, Switzerland, in 2009, © Monika Flueckiger
Article by Kevin Dowd, PitchBook