Carlyle’s co-chief executive Glenn Youngkin is to step down, leaving Kewsong Lee in sole charge of the US private equity firm.
Mr Youngkin, a 25-year veteran at the buyout group, became co-chief alongside Mr Lee in 2018 after the company’s founders said they would step back from the day-to-day running of the business.
“As the world continues to face so many challenges . . . now is a natural point to focus my full-time efforts on community and public service efforts,” Mr Youngkin said on Tuesday.
The decision comes months after Carlyle recorded a $1.2bn investment loss and said it was withdrawing all earlier financial guidance, citing the fallout from the coronavirus pandemic.
Those losses wiped out carried interest on three of Carlyle’s funds, meaning that if investments were realised at current valuations its executives would receive little in performance fees.
Mr Youngkin, who will leave the firm at the end of September, had recently struck an optimistic note about business prospects following the coronavirus shutdown.
Carlyle had experienced an “economic rebound in China [that] has been very V-shaped”, he told a Morgan Stanley investor conference last month, although progress in the US and Europe would come in fits and starts, and some sectors would take longer to recover.
Mr Youngkin and Mr Lee — who joined from Warburg Pincus in 2013 — had split their areas of focus, with Mr Youngkin overseeing Carlyle’s energy businesses, which has been heavily exposed to a downturn in the sector, along with real estate and infrastructure.
Units in Mr Lee’s remit, which included corporate private equity and capital markets businesses, were seen as drivers of profits and growth, according to a person familiar with the matter.
The co-CEO model was set up as David Rubenstein, William Conway and Daniel D’Aniello, who founded the firm in 1987, sought to hand the reins to a new generation of leaders. Mr Rubenstein and Mr Conway became co-executive chairmen and Mr D’Aniello the chairman emeritus.
“We did not view the co-CEO structure as a permanent solution,” Craig Siegenthaler, an analyst at Credit Suisse, wrote in a note after the announcement. He said he was “impressed with Kew’s leadership and focus on growing the firm — including its expansion into credit and insurance”.
Last month Mr Youngkin launched the Virginia Ready initiative, which writes $1,000 cheques to “motivated, unemployed Virginians” who complete a course of study at a local community college.
The programme is intended to provide incentives to retrain for some of the 875,000 Virginians who have filed for unemployment since the beginning of the pandemic.