Carlyle hires ex-Goldman executive Harvey Schwartz as CEO

Carlyle Group is set to announce it has hired former Goldman Sachs executive Harvey Schwartz to be the private equity group’s next chief executive, completing its search for a new leader after Kewsong Lee’s abrupt resignation in August.

Schwartz, a two-decade veteran of Goldman who left the Wall Street bank in 2018, has been offered Carlyle’s top job and accepted, said sources briefed on the matter.

Carlyle’s board met on Sunday to vote on the appointment, said the sources. The appointment will be announced on Monday morning. The Financial Times reported last week on his talks over the role.

Carlyle declined to comment, while Schwartz did not respond to a request for comment.

Schwartz will take the helm of one of the world’s largest private equity groups with $369bn in assets under management, but whose growth and stock price have lagged behind competitors like Blackstone Group and KKR in recent years.

Schwartz departed Goldman five years ago after losing out to David Solomon in a contest to take over from Lloyd Blankfein as CEO. He had held several top roles at the bank, including chief financial officer, co-head of the securities division, and co-president and chief operating officer alongside Solomon.

His appointment comes after a lengthy search during which Carlyle considered internal candidates and reached out to a number of high-profile financial executives outside the company.

The group’s search committee had sounded out Goldman president John Waldron, former Morgan Stanley chief operating officer Jonathan Pruzan and Citigroup chief financial officer Mark Mason, people briefed on the search said.

Top internal candidates were Peter Clare, chief investment officer of Carlyle’s private equity unit, and Mark Jenkins, head of its expanding credit investment operations.

“We believe the absence of a CEO has been an overhang on the stock, so a new CEO, particularly of the calibre of Mr Schwartz, would be positive for shares,” said Brian McKenna, an analyst at JMP Group.

Schwartz will have the task of stabilising Carlyle after a period of leadership uncertainty and setting strategy as a decade of benign financial markets for private equity firms makes way for more challenging conditions.

Fundraising industry-wide has slowed as investors weigh their exposure to private markets, forcing Carlyle to seek an extension in raising cash for its newest buyout fund. Carlyle also trails peers in expanding beyond corporate buyouts and into real estate, infrastructure and credit-based investments to grow overall assets.

Schwartz has experience in overseeing large operations during times of uncertainty.

While at Goldman, Schwartz was best known for his operational and risk management skills in steering the bank’s trading division through the financial turmoil of the 2008 financial crisis.

He was co-head of Goldman’s securities division in the years during and immediately after that period, becoming CFO in 2013.

As CFO, he helped Goldman adapt its overall operations for a stricter regulatory environment in the wake of the financial tumult.

He held the role for four years before being promoted to co-president in January 2017, working alongside Solomon.

A year later, Goldman’s succession plans for Blankfein were clarified when Solomon was named the bank’s sole president, while Schwartz announced his decision to retire from the bank.

Additional reporting by Joshua Franklin in New York and Kaye Wiggins in Hong Kong