Carlyle veteran Pete Clare leaves after Schwartz is named CEO
Pete Clare, a three-decade veteran of Carlyle Group Inc. who has become synonymous with the buyout business, is leaving the company after being passed over for the top position at the private equity firm.
Clare — chief investment officer of corporate private equity, chairman of the Americas and a board member — will step down from the Washington-based company on April 30 after helping with a transition, according to a regulatory filing filed Monday.
Following the abrupt departure of former CEO Kewsong Lee in August, Carlyle board members debated whether to bring on an outside candidate or hire internally, Bloomberg previously reported. Clare emerged as a candidate for the job, but the directors eventually decided that Carlyle would benefit from hiring an entrepreneur and outsider with a new perspective.
“We wish him and his entire family well in his retirement,” Carlyle co-chairs 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 company’s three founders, Conway, Rubenstein and Daniel A. D’Aniello. Clare’s departure paves the way for Carlyle’s new CEO, former co-president of Goldman Sachs Group Inc. Harvey Schwartz, to re-establish the company on his own.
The board expects Schwartz, 58, to focus on financial metrics and initiate a budget review as the company seeks new revenue streams beyond acquisitions. The company is struggling to bolster investor confidence in its growth trajectory, and Carlyle’s shares have underperformed rivals Apollo Global Management Inc. and KKR & Co. over the past year.
Clare helped build Carlyle’s Asia buyout business and launched the firm’s first distressed debt investments before being appointed co-head of US buyouts in 2011.
The American private equity firm he headed was long a powerhouse for the Washington firm, which made high-profile bets on government giants like ManTech and Booz Allen Hamilton. But it’s also facing an increasingly crowded market as more competitors vie with it for dollars and business.
In an attempt to boost returns from Carlyle’s private equity arm, Lee had attempted to push through changes in the group’s leadership.
Lee has asked the company’s growth and buyout teams to work more closely together and has sought to make other organizational changes in the private equity division, people familiar with the matter said. But the unit, partly because of Clare’s grip, sometimes resisted change. Lee’s turnaround offer was cut short when he left Carlyle.
Clare is leaving the company as fundraising for the company’s main private equity fund is slower than expected. His departure was not a so-called key-man event, a clause that would have triggered an automatic suspension of all new deals until certain investors got involved, said a person familiar with the matter.
Sandra Horbach and Brian Bernasek, who jointly lead Carlyle’s US buyout and growth platform, will also act as co-leads for the Americas. Horbach built the firm’s consumer and retail deals practice and is one of the most experienced women in the private equity industry. Bernasek led the company’s industrial team.
–With support from Erin Fuchs.
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