Feb 6 (Reuters) – Carlyle Group Inc on Monday appointed former Goldman Sachs Inc executive Harvey Schwartz as its chief executive officer, tasked with leading the firm’s earnings private equity, which increases its assets under management and which strengthens its stock price.
Schwartz’s appointment, after a six-month search, takes effect on February 15. Kewsong Lee stepped down as CEO last August after his turnaround efforts fell short of expectations. David Rubenstein, William Conway and Daniel D’Aniello – founders of Carlyle who still control 26% of the firm – also felt that Lee did not adequately consult them on key decisions.
Schwartz, 58, retired as Goldman Sachs’ president and chief operating officer in 2018 after a 20-year career at the bank, where he held other leadership roles including chief financial officer and co- global head of its trading division. Unlike most Wall Street executives with Ivy League pedigrees, Schwartz graduated from Rutgers University before earning an MBA at Columbia. He joined Goldman in 1997.
He was a leading contender to replace former Goldman Sachs CEO Lloyd Blankfein, but lost to David Solomon. Schwartz is set to earn $1 million in base salary and up to $3 million in annual bonus. He will be given Carlyle stock valued at $180 million at his start-up, regulatory filings showed.
Carlyle shares closed 2.91% lower at $36.31 per share after Monday’s announcement. Carlyle, which has $369 billion in assets under management, is due to report its fourth-quarter earnings on February 7.
Investors will be watching closely how Schwartz leads Carlyle, which is seen as underperforming rivals Blackstone Inc, Apollo Global Management Inc and KKR & Co Inc in recent years.
“We consider the conclusion of this (CEO) search to be positive,” Jefferies analysts wrote in a note, adding that there will be “a grace period necessary to better understand any new strategic initiatives .”
(Reporting by Chibuike Oguh in New York and Niket Nishant in Bengaluru; Editing by Will Dunham and Marguerita Choy)
