Carlyle CEO is stepping down

The Washington, DC, company’s stock has lagged behind its publicly traded peers since its initial public offering in 2012. Carlisle has been slow to branch out beyond the volatile private equity business and into other businesses, such as credit and insurance, which generate stable and predictable management fees charged by shareholders.

Mr. Lee’s departure is a rare example in which a carefully selected successor has been shown to the founders of a private equity firm. Companies like

Black stone a company

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KKR

For years she and Associates worked on succession planning, sending a telegram to fund investors and shareholders long before an official announcement was made.

Mr. Conway and fellow co-founder David Rubinstein served as co-CEOs of the company until 2018 when they handed the title to Mr. Lee and veteran Glenn Yongkin. Daniel Danielo, the third co-founder, was chairman of the board until the beginning of 2018. Mr. Lee, 56, became the only CEO in 2020 when Mr. Yongkin, now Virginia’s governor, resigned to focus on public service.

At the time, Mr. Rubinstein said Mr. Lee was “in a very good position to serve as our CEO”.

Mr. Lee began work on streamlining the company’s structure and streamlining the sprawling private equity business, cutting back on funds and integrating infrastructure and energy businesses into one platform. He focused on expanding the Carlyle fiduciary platform and bringing the company into the insurance asset management business by acquiring a significant stake in Fortitude Re.

Mr. Lee successfully launched the Carlyle Fund’s long-term strategy, and in 2015, the founders gave him authority over the direction of the credit business. The following year, Mr. Lee orchestrated an exit from the troubled Carlisle hedge fund business and hired Mark Jenkins of the Canadian Pension Plan Investment Board to build and lead a stand-alone credit investment platform.

Carlisle’s credit segment assets under management nearly doubled year-over-year to $143 billion in the second quarter, outpacing the company’s private equity segment for the first time. Fee-related earnings rose 65% to $236 million.

Despite these efforts, Carlyle’s stock has underperformed its peers since Mr. Lee took first place. Carlyle’s stock, including dividends, nearly doubled during the period, beating the S&P 500 but didn’t live up to the performance of KKR and Blackstone, whose shares nearly tripled and quadrupled, respectively.

A relative newcomer to Carlisle, having joined in 2013 from private equity firm Warburg Pincus LLC, Mr. Lee’s rise and strategic turnaround has sparked some feathers in the hiding company. A handful of top investment professionals – some with tenures of two decades or more – have left amid the changes.

Before Mr. Lee reached Carlisle, Messrs. Rubinstein, Conway, and Daniello made most of the big decisions. The men remain on the Board of Directors, with Messrs. Conway and Rubinstein serving as non-executive co-chairs and Mr. D’Aniello as non-executive co-chairs.

write to Miriam Gottfried at [email protected]