Many financial firms, from Goldman Sachs to Bain Capital, like to groom their senior talent from within their own ranks. But the Carlyle Group, a private equity giant based in Washington, has shown time and again that it is willing to look elsewhere for its leaders.
The most prominent example yet came on Tuesday, when Carlyle announced that Michael J. Cavanagh, one of the co-heads of JPMorgan Chase's huge investment bank, would leave to become its co-president. In the newly created role, Mr. Cavanagh, 48, will share responsibilities with Glenn A. Youngkin, 47, an insider who has spent nearly two decades at Carlyle.
The hiring of Mr. Cavanagh will ripple through JPMorgan, where he was a top lieutenant to the bank's chief executive, Jamie Dimon.
For Carlyle, the implications are equally profound: With Mr. Cavanagh joining the highest ranks of the private equity firm, an outsider is now in line to possibly take over one day from the firm's three founders, who are well into their 60s.
The founders, David M. Rubenstein, William E. Conway Jr. and Daniel E. D'Aniello, are not planning on stepping down any time soon. And certainly, other Wall Street titans, including Carl C. Icahn and Warren E. Buffett, are still going strong in their 7's and 80s.
But Mr. Cavanagh and Mr. Youngkin, who is currently the chief operating officer, are now in the catbird seat at Carlyle. As co-presidents and co-chief operating officers, their day-to-day responsibilities will be defined broadly, overseeing operations and the development of new products, along with helping to manage the funds and deal with investors.
'Coupling a highly successful senior financial services executive with a proven Carlyle leader possessing deep institutional knowledge will help ensure that Carlyle continues to innovate and grow for another quarter century,' Mr. Rubenstein and Mr. Conway said in a statement on Tuesday. 'Mike's arrival combined with the well-deserved promotion for Glenn provides Carlyle with the incredible opportunity to enable fresh perspectives in an environment that embraces change.'
Mr. Cavanagh joins other senior leaders who went to Carlyle from various corners of Wall Street. To some extent, their diverse backgrounds reflect the institutional changes that Carlyle has experienced in the last few years.
Adena T. Friedman, the chief financial officer, joined Carlyle in 2011, as the private equity firm was preparing to go public. She had formerly held the same title at the Nasdaq OMX Group, and was valued for her experience at a prominent public company.
Michael J. Petrick, the head of global market strategies at Carlyle, a business that includes credit, hedge funds and other investment strategies, joined the firm in 2010 after a 20-year career at Morgan Stanley, where he was the head of institutional sales and trading.
Another Morgan Stanley executive, Jacques P. Chappuis, joined Carlyle last year to run its so-called solutions business, a platform that invests in other funds. At Morgan Stanley, he had similarly run the fund-of-funds business.
Carlyle has also hired from rivals in private equity. Kewsong Lee, Carlyle's deputy chief investment officer in the corporate private equity group, joined the firm last year after 21 years at Warburg Pincus, in prominent investment roles.
Carlyle's founders first reached out to Mr. Cavanagh last year, according to a person briefed on the matter who was not authorized to speak publicly about it. Internally, the decision to create co-presidents was characterized as 'leadership planning,' rather than succession planning.
Throughout months of talks, Mr. Cavanagh got to know the founders and spent time with Mr. Youngkin, to make sure the two would be compatible.
'I'm pleased to welcome Mike to Carlyle as my partner,' Mr. Youngkin said in a statement on Tuesday.
Posted by Unknown on Tuesday, March 25, 2014 - Rating: 4.5
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