Tuesday, March 25, 2014

Dimon Protege to Diversify Carlyle Group

Bloomberg reported:

When former JPMorgan Chase & Co. (JPM) executive Mike Cavanagh arrives at Carlyle Group LP (CG) this summer, he’ll be asked to expand a firm that’s fallen behind rivals even as it delivers some of the best returns in private equity.

Carlyle, the second-largest manager of alternative investments such as private-equity funds and real estate, has increased its assets at a 13 percent annual rate in the past two years, the slowest pace among peers, according to calculations by Bloomberg. Blackstone Group LP (BX), the largest private-equity manager, expanded at a 26 percent pace, the same as KKR & Co. and Apollo Global Management LLC (APO) grew at a 46 percent rate. 

Cavanagh, 48, until today co-chief of investment banking at JPMorgan and a close deputy to Chief Executive Officer Jamie Dimon, will need to find ways to further diversify Carlyle from private equity and expand assets. He will share a co-president role with Glenn Youngkin, a 19-year veteran of the firm, Washington-based Carlyle said in a statement. 

Fortune added:

Moreover, there are fewer regulatory headaches at a private equity firm than at a Wall Street bank -- not to mention fewer Congressional hearings (Cavanagh didn't get rave reviews for his performance last March at a Senate hearing on the London Whale).
Cavanagh looks like he'll fit in well with the Great Whites. May there be chum in PEU waters.

Update 3-29-14:  Cavanagh will earn $7 million per year as Carlyle's co-President.  Carlyle submitted an SEC filing detailing Cavanagh's pay.