Pete Clare, a three-decade veteran of Carlyle Group Inc. who has become synonymous with its buyouts business, is leaving after being passed over for the top job at the private equity firm.
Clare — chief investment officer of corporate private equity, chairman of the Americas and a member of the board — will step down from the Washington-based company on April 30, after assisting with a transition, according to a regulatory filing Monday.
After the abrupt departure in August of its previous CEO, Kewsong Lee, members of Carlyle’s board debated whether to tap an external candidate or hire from within, Bloomberg previously reported. Clare emerged as a candidate for the job, but directors ultimately decided Carlyle would benefit from hiring a business operator and outsider with a fresh perspective.
“We wish him and his entire family well in his retirement,” Carlyle Co-Chairmen Bill Conway and David Rubenstein said in a statement.
Clare, 57, has given up his seat on the board of directors, where his voice carried weight with the firm’s three founders, Conway, Rubenstein and Daniel A. D’Aniello. Clare’s departure paves the way for Carlyle’s new CEO, former Goldman Sachs Group Inc. Co-President Harvey Schwartz, to remake the firm in his own right.
The board expects Schwartz, 58, to focus on financial metrics and embark on a budget review while continuing the firm’s push beyond buyouts for new sources of revenue. The firm has struggled to shore up investors’ confidence in its path to growth, and Carlyle shares have underperformed rivals Apollo Global Management Inc. and KKR & Co. over the past year.
Clare helped build Carlyle’s Asia buyout business and launch the firm’s first distressed-debt investments before being appointed co-head of the US buyout division in 2011.
The Americas private equity business he presided over has long been a power center at the Washington firm, making high-profile bets on government contracting giants such as ManTech and Booz Allen Hamilton. But it also faces an increasingly crowded market as more rivals compete with it for dollars and deals.
In an attempt to lift returns at Carlyle’s private equity arm, Lee had tried to push through changes in how the group was run.
Lee asked the firm’s growth and buyout teams to work more closely together and had been attempting to enact further organizational changes in the private equity division, said people familiar with the matter. But the unit, in part because of Clare’s grip, at times resisted change. Lee’s turnaround bid was cut short when he left Carlyle.
Clare is leaving as fundraising for the firm’s main private equity fund is going slower than expected. His departure isn’t a so-called key-man event, a clause that would have triggered an automatic suspension of all new deals until certain investors weighed in, said a person familiar with the matter.
Sandra Horbach and Brian Bernasek, who lead Carlyle’s US buyout and growth platform together, will also step up as co-leads of the Americas. Horbach built the firm’s consumer and retail deal practice and is one of the most senior women in the private equity industry. Bernasek headed the firm’s industrial team.
–With assistance from Erin Fuchs.
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