Carlyle is integrating its buyouts and growth teams to turbocharge its investment strategy. Meet 13 of the top investors leading the $43 billion vision. The Carlyle Group is integrating its buyouts and growth-investing strategies in the US. Brian Bernasek, a Carlyle exec, is also set to become a cohead of US buyouts and growth. The integrated approach goes into effect the same day Bernasek takes on his new role: June 1. See more stories on Insider’s business page.
The Carlyle Group, a global private-equity firm with $246 billion in assets under management, is taking steps to integrate its buyouts and growth strategies in the US.
The private-equity giant, known for megadeals across sectors from industrial to technology and consumer retail, is bringing together the two approaches, which have previously been more siloed, to form a strategy with $43 billion in assets.
The integrated approach is an outgrowth of CEO Kewsong Lee’s vision to enhance the firm’s operations and deepen its ability to make smart plays.
Lee characterized his philosophy on making changes to Carlyle’s investing approaches as “thinking bigger, performing better, and moving faster” in his first letter to shareholders as the sole chief executive in September.
He reiterated the message at the firm’s 2021 Investor Day, where he outlined a four-year plan to “accelerate growth and deliver enhanced shareholder value,” the company said in February.
The approach toward integrating buyouts and growth is one lever that Carlyle is using to enact those plans. Carlyle executed a similar approach in Asia in 2017, with the goal being to deepen sector-driven investments through their industry expertise, rather than focus on the size or scale of the deal type.
Under the integrated strategy in the US, the firm’s six core verticals will drive capital deployments in large buyouts and smaller investments in growth-stage companies.
“You need to have a bigger and broader industry team in order to do it because you’re going to cover twice as much landscape,” Peter Clare, Carlyle’s chief investment officer for corporate private equity, told Insider in an interview.
The changes in the US buyouts and growth team go into effect on June 1. In addition to the integration, Carlyle announced that as of the same date, Brian Bernasek, the head of the industrial and transportation sector, would succeed Clare as the next cohead of US buyouts and growth alongside cohead Sandra Horbach.
In addition to remaining the firm’s chief investment officer, Clare will become chairman of the integrated US buyouts and growth platform.
Horbach, who has been a cohead of the US buyouts team since 2016, told Insider buyouts and growth-focused investing had both been arrows within Carlyle’s quiver over the years. The difference now, she said, is that the firm will be “accelerating” its efforts to bring those strategies under one roof, within each respective deal team.
“Seeing companies when they are young, or in growth-oriented stages, and larger businesses gives us that complete picture and helps us make better decisions,” she said. “That’s where we believe the world is headed, and we want to be forward-thinking and taking advantage of those opportunities.”
Carlyle’s six core investing sectors in the integrated strategy are:
Technology, media, and telecommunications. Healthcare. Industrial and transportation. Consumer, media, and retail. Global financial services. Global aerospace, defense, and government services.
Insider spoke with 13 members of Carlyle’s US buyouts and growth team — the division’s leaders, individual sector heads, and the next generation of talent helping to shape the firm’s future — about industry trends and the challenges of investing in a post-pandemic world.
Meet 13 key people in Carlyle’s newly integrated group: Peter Clare Chief investment officer, corporate private equity Clare is the chief investment officer and a member of the board of directors at the Carlyle Group. The Carlyle Group
In the view of Peter Clare, Carlyle’s chief investment officer for corporate private equity, the key to success lies in people.
Whether it’s those within the firm or people at its portfolio companies, that next step in the evolution of private equity begins and ends with the right minds in positions that enable success.
As Carlyle moves to integrate its US buyouts and growth-investment teams, the private-equity firm is confident it has placed the right people at the helm of six industry verticals.
“The ability to have both specialist teams and operational experts is enhanced by going into a more integrated structure,” Clare told Insider.
Meanwhile, Carlyle’s integration comes amid two external macro trends: an acceleration in dependence on technology, somewhat driven by the pandemic, and a burgeoning universe of companies that are choosing to stay private for greater lengths of time.
As businesses opt to remain private, and private-equity dry powder hovers at record-high levels, investment firms can pounce on lucrative opportunities.
“More new businesses are staying private for a lot longer, and that doubles the number of businesses we have the opportunity to invest in,” Clare said. “Inside those business models, we see technologies and processes that we can seek to apply to traditional industries. That’s a huge area of improvement that hasn’t always existed.”
Clare has spent more than two decades at the Carlyle Group. He is a member of the firm’s executive group and serves on its board of directors.
He previously completed stints with Carlyle in Hong Kong and was a founding member of Carlyle’s Asia buyout team.
Sandra Horbach Cohead of US buyouts and growth Horbach is a cohead of US buyouts and growth at the Carlyle Group. The Carlyle Group
Sandra Horbach is one of the most senior women in private equity.
A trailblazer in a sector long dominated by strong male presences, she now manages about $43 billion of the firm’s $246 billion in assets under management.
Horbach first took over leadership of the US buyouts team in 2016 and now serves as cohead of the US buyout and growth team. She has also mentored many of Carlyle’s next generation of female leadership.
And with the integration of the buyouts and growth-investment strategies, she’s enthused about the future.
“We see it as an acceleration, to take advantage of the opportunities that we see in the marketplace, and we think it starts with our deep sector expertise,” she told Insider. “But it’s really the foundation of how we think about investing.”
She added that the firm’s sector heads had the benefit of “broad networks and resources” within their individual industries, which will help them identify growth-stage investments while young companies are still early in their life cycles.
Throughout her career, Horbach has been a pioneer behind some of Carlyle’s most iconic investments, including its capital deployments into businesses like Beats Electronics, Vogue, and Dunkin’ Brands.
She first joined the Carlyle Group in 2005 and presently sits on the board of the packaging company Novolex. She also sits on Carlyle’s diversity and inclusion council.
Meanwhile, she has also looked to address challenges presented by leading through a pandemic. Being empathetic to employees’ circumstances was key to helping steer the portfolio through it.
“We’ve been very, very effective at working remotely, so now we’re thinking about: How does this change the work going forward?” she said. “I really believe showing more flexibility to our teams is going to be important to continue to be successful and attract the best talent.”
In 2020, Horbach was named to Barron’s list of the 100 most influential women in US finance.
Brian Bernasek Incoming cohead of US buyouts and growth Bernasek is the incoming cohead of buyouts and growth at the Carlyle Group. The Carlyle Group
For Brian Bernasek, the age-old saying that opportunities beget opportunities rings true for the Carlyle veteran at the forefront of the firm’s unification of buyouts and growth.
Bernasek is the incoming cohead of US buyouts and growth and will start that position on June 1. His new role will put him alongside Horbach in helping ensure that the buyouts and growth strategies cascade throughout individual investment sectors.
He comes from the industrial and transportation sector. During his time as the head of the global sector, he has overseen investments in market-leading firms, including Novolex Holdings, Kinder Morgan, and Hertz.
Bernasek said combining Carlyle’s six main verticals would lead to greater collaboration and present the sector heads with lucrative investment opportunities.
“Working at this scale, blurring the lines across verticals, allows us to share resources even better than we have,” Bernasek said. “Take our industrial team — they’ve leveraged learning, particularly with digital capabilities, from the technology team, and it’s moved through our industrial investment-opportunity assessments.”
Bernasek joined Carlyle in 2000. Today he is a board member of the chemical producer Atotech, in which Carlyle invested in 2017.
Patrick McCarter Head of global technology, media, and telecommunications Patrick McCarter is the head of global TMT at the Carlyle Group. The Carlyle Group
As the head of the global technology, media, and telecommunications (TMT) team at Carlyle, Patrick McCarter has been integrally involved in the company’s capital deployments into tech firms like HireVue, ZoomInfo, and Dealogic.
By virtue of tech being omnipresent across deal verticals, McCarter shares CEO Lee’s thesis that “every deal is a tech deal,” a statement which Lee first made in 2019.
And that view has been only reinforced by the events of the past year, in which technology became central to every CEO’s strategy.
“If you look at the pace of innovation during COVID, if you were on the right side of thinking those changes were going to happen, a lot of them accelerated,” McCarter said of the growing adoption of tech to power working from home, among other transitions.
Over the two decades that McCarter has spent at Carlyle, the world has changed.
Much of that evolution has been an outgrowth of strategic bets that tech investors like McCarter have made on everything from hardware to software that have transformed business and everyday life.
Now, as data gatherers within the public and the private sectors develop more sophisticated techniques for harnessing and synthesizing large datasets, McCarter expects that we’ll see a notable influence on the TMT investing landscape, he said.
He named sectors like healthcare as being primed for innovative uses of data that can have real-world implications on people’s lives.
“I think it’s going to be really exciting,” he said, “what people can do with the data that they’re collecting today.”
Ashley Evans Managing director, technology, media, and telecommunications Evans is a managing director in TMT at the Carlyle Group. The Carlyle Group
Ashley Evans is a managing director in the TMT division at Carlyle. She sits on the boards of multiple technology companies, including ZoomInfo, HireVue, and Veritas.
Evans, who works out of the firm’s West Coast offices in Menlo Park, California, is at the intersection of multiple niches within the world of technology investments.
One such example is the health-research company TriNetX, of which Evans sits on the board. Carlyle invested in the company for an undisclosed amount in September.
“We were able to bring together our healthcare team’s knowledge of the workflow of what clinical trial design looks like, and our tech team’s knowledge of how you structure a data business and how you build an exceptional data-driven SaaS product,” Evans said, “so that we can support the business in driving compelling value for the pharma companies that are customers.”
In her private life, Evans is the cofounder of the SynGap Research Fund, a nonprofit organization that has invested more than $1 million to advance research toward the treatment of a rare genetic disorder, SYNGAP1-related nonsyndromic intellectual disability, a condition her son Tony was diagnosed with in 2018.
Anna Tye Managing director, technology, media, and telecommunications Anna Tye is a managing director in TMT at the Carlyle Group. The Carlyle Group
Anna Tye is a managing director in the TMT group at the Carlyle Group, which she joined in 2009.
During her time there, she has been involved in investments in data and technology companies, including Dealogic, Unison, and a variety of software firms.
“As a software investor, it is incredibly valuable that I have colleagues who work at Carlyle who have broad expertise across industries including in healthcare, consumer, and industrial among others,” Tye said. “Because, increasingly, tech is permeating all of these industries.”
As a member of the next generation of Carlyle leadership, Tye said providing a listening ear to more junior talent had been key throughout her rise.
“For me as a leader and an investor, the more perspectives from others that I can benefit from, the better. I really do try to employ that approach of hearing out everybody’s perspective, and that’s both within and outside my team,” Tye said.
“Oftentimes, the most junior people — they’re the ones closest to the data. They might be seeing things that aren’t as obvious to others. I want to create an environment where they feel like they can speak openly about what they’re seeing and raise questions and topics proactively,” she added.
Jay Sammons Head of global consumer, media, and retail Jay Sammons is the head of global consumer, media, and retail at the Carlyle Group. The Carlyle Group
In 2017, Jay Sammons led the Carlyle Group’s $500 million acquisition of a 50% stake in Supreme, the streetwear company that has attracted high-profile fans like Drake and Cara Delevingne, The Wall Street Journal reported at the time.
By 2020, Carlyle roughly doubled its investment when it sold its stake to the apparel conglomerate VF Corp., according to the Journal.
Sammons, the head of Carlyle’s global consumer, media, and retail team, oversees a division that has deployed capital into brands in industries including apparel, electronics, and personal hygiene.
“Instinct and intuition are informed from years and years of experience,” Sammons, who joined Carlyle in 2006, said, speaking about the judgment it takes to assess a smart investment.
Over the years, Sammons has led investments in other brands that have carved out their own niches in popular culture, like the audio brand Beats Electronics and the men’s personal-hygiene brand Every Man Jack.
More recently, his group made an investment in Beautycounter, a skin-care and cosmetics company now valued at $1 billion with the Carlyle Group’s majority investment, which was first reported by The Wall Street Journal on Tuesday.
Looking forward, Sammons said he felt confident about the outlook for consumer retail, including in the luxury sector, which hit some speed bumps over the past year.
“I really do believe that there will always be a place in the consumer market for experiences and products and goods that allow consumers to feel good,” he said. “And consumers will allocate what it takes to get there.”
Steve Wise Global head of healthcare Steve Wise is the head of global healthcare at the Carlyle Group. The Carlyle Group
Private equity has long played in the healthcare space, investing in various parts of the industry, from services to infrastructure.
But in recent years, Carlyle’s strategies have homed in on biopharmaceuticals, diagnostics, and technology-focused providers within the space.
And for Steve Wise, the private-equity firm’s head of global healthcare, the pandemic has accelerated this emphasis on life sciences and pharmaceutical services.
“We like to be part of the solution. And this means investing in areas of healthcare that add value into the system and reducing costs at the same time,” Wise said.
Take Carlyle’s investments in Ortho Clinical Diagnostics, a provider of diagnostics for screening and confirming diseases, or PPD, a global contract research organization. Ortho Clinical, a carve out from Johnson & Johnson, has been integral in the early detection of disease, while PPD has been laser-focused on clinical trials for COVID-19.
“The pandemic has shown how important investing in the biopharmaceutical sector really is,” Wise said. “We view diagnostics as the tip of the spear for the early detection of disease and eventually driving down healthcare costs.”
Carlyle’s interest in the digitization of healthcare is another driver in the firm’s investment in the space. The primary-care system in the US could benefit from a wave of fresh innovation, Wise said, and consumers need a greater understanding of how it works.
Employers have also grown frustrated with the nuances of the system.
“We expect to see consumers being armed with more information, choice, and responsibility for their healthcare,” Wise said. “We are seeing employers, too, enable that change as they see the benefits of efficient, healthier employees. We believe that this desire, in conjunction with technology enablement, is going to drive the industry.”
Will McMullan Partner, global healthcare Will McMullan is a partner in global healthcare at the Carlyle Group. The Carlyle Group
After 14 years with Carlyle, Will McMullan, a partner within the firm’s global healthcare team, reckons being a “culture carrier” is integral to guiding the next generation of investors coming through the ranks of private equity.
He sits on the board for a number of Carlyle’s healthcare investments, including Albany Molecular Research, MedRisk, and Millicent Pharma. He has also worked on investments in Brazil, including Rede D’Or São Luiz.
The Brazilian hospital operator went public in December in an initial public offering that valued Rede D’Or at about $22 billion, Reuters reported at the time.
In McMullan’s view, leadership is best served with a personalized approach.
“I want a personal connection with the people I work with. I want to know what makes them tick and how to get the best out of what they bring to the firm,” he told Insider. “Mentorship is critical to our success. We take that seriously, and it’s part of the firm’s culture.”
That strategy has only heightened since the pandemic forced people out of the office.
Working from home, for all of its efficiencies, can leave a strain on the apprenticeship model of leadership. Tight-knit teams can’t be together on a daily basis to bounce ideas off one another, and they can’t easily travel or learn from senior executives.
“The firm made an effort to keep the focus on culture and maintained that pulse of an organization that understands shifts in morale,” McMullan said. “Our real assets are the people that work here, and you have to have that sense of development and opportunity for all the generations within the firm.”
Martin Sumner Managing director, industrial and transportation Martin Sumner is a managing director at the Carlyle Group who focuses on investment opportunities in the firm’s industrial and transportation sector. The Carlyle Group
For Martin Sumner — a managing director within Carlyle’s industrial and transportation sector who is set to take over the vertical — growth throughout these verticals is evolving from financial windfalls to all-encompassing investments that prioritize returns as well as social gains.
Take Novolex, a Carlyle portfolio company since 2016 that specializes in packaging manufacturing. The firm, through diversity initiatives, has morphed into a company with women and people of color within its highest ranks, Insider reported earlier this year.
Novolex’s revenue soared 35% from 2016 to 2019 as the firm made diverse recruiting a pillar in its growth.
And over the summer, Carlyle announced plans to ensure that 30% of its board members at its portfolio companies were people from underrepresented backgrounds by 2023.
Moreover, the environmental lens continues to zoom in on the industrial and transportation sectors. And for Sumner, this is front and center for Carlyle’s investments within the space and a key discussion topic for the firm’s future investments.
“We invest in companies that make and move things, so for companies we own, how can we help them become more environmentally friendly,” Sumner said. “When we look at companies, we have to put them through that lens and ask, ‘Are they the most efficient in their industry, or can we help them become world class?'”
In recent years, many of these high-carbon-emitting sectors have come under the microscope. Consumers are growing more interested in companies that do their part as good corporate citizens.
“When we take companies public, this is increasingly a key focus for investors,” Sumner said. “A lot of these ESG opportunities are still pretty nascent from a development perspective, but we’ve got to invest the dollars behind the most promising technologies.”
Sumner will succeed Bernasek as the head of global and industrial transportation on June 1.
Tanaka Maswoswe Managing director, industrial and transportation Maswoswe is a managing director in the industrials and transportation sector at the Carlyle Group. The Carlyle Group
Tanaka Maswoswe is a managing director in Carlyle’s industrial and transportation sector. He joined the firm in 2011.
At Carlyle, he focuses on deals in the chemicals sector, one subsector of the broader industrial vertical, as well as other areas like packaging and automotive transport.
Deals he’s worked on include the $3.2 billion acquisition of the chemicals firm Atotech in 2017, as well as the acquisition of the chemical producer Nouryon, where he sits on the company’s board.
“We like to say around here, ‘It’s a quick yes or a quick no, and not a slow maybe,'” he said.
Maswoswe said the coronavirus pandemic had investors and companies taking a closer look at logistics and product distribution, as well as big questions around the future of spaces like the workplace — and all that creates new investment possibilities for industrial investors.
Maswoswe said being able to drill into specific sectors was key to really identifying successful deals.
“We’re doing these large global deals, but we have very specific local knowledge about them. It is knowing the verticals well, knowing where the opportunities are,” he said.
Maswoswe began his career in financial services as an investment-banking analyst in the diversified industrial division at Barclays.
John Redett Cohead of global financial services John Redett is a cohead of global financial services at the Carlyle Group. The Carlyle Group
John Redett, a cohead of the global financial-services group, spearheaded Carlyle’s investments in asset managers, financial accounting, and consultancy firms like TCW and CFGI.
He’s seen the innovation that’s been unleashed throughout the industry over the past 10 years.
“That acceleration of technological innovation has been eye-opening to a lot of executives in financial services throughout the pandemic,” Redett told Insider. “I don’t think there’s a corner, a subsector of financial services that has not been impacted by this tech evolution.”
In the years ahead, one continued theme Redett is counting on is consolidation in the wealth and asset-management space, driven by the generational bifurcation between young and old investors.
“It’s kind of a life cycle. You have younger consumers who don’t have quite the wealth — they’re starting to develop wealth,” he said. “They’re starting to trade. They’re starting to accumulate wealth.”
He added: “I think these younger consumers will require additional services that will require a broader platform, and that’s kind of how we think about it.”
Ian Fujiyama Head of global aerospace, defense, and government services Ian Fujiyama is the head of global aerospace, defense, and government services at the Carlyle Group. The Carlyle Group
Ian Fujiyama is the head of Carlyle’s global aerospace, defense, and government-services team.
He has led all of the firm’s recent investments in the federal-services sector, which includes deals like its former stake in the government-services contractor Booz Allen Hamilton.
Over the years, the team has invested in more than 45 companies, Carlyle said.
Aerospace faced unprecedented turbulence in 2020, as travelers forwent travel plans and the industry had to take on record levels of debt financing to survive.
“The scale and magnitude of this crisis is unlike anything the industry has seen. We’ve had crises before, but they’ve typically been of less magnitude and shorter duration, but probably most importantly, regional,” Fujiyama said.
“The fact that we’ve had a very capital-intensive industry take a global hit all at the same time at the magnitude that it is — you’re in uncharted territory,” he added.
But with incredible challenges come the demands for fresh innovation. Fujiyama said a renewed focus on environmentally conscious initiatives within the industry was already taking flight.
“It’s most likely to play out because of the long development cycles more in next-generation aircraft,” he said. “The thinking there is about, how do you power the engine? That’s going to take a lot of time to ultimately come to market.”
A Hawaii native, Fujiyama has spent more than two decades at Carlyle. He previously led the private-equity firm’s diversity and inclusion council, and he is now a sitting member of the group. The council is now led by CEO Lee.
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