The Carlyle Group managing director and chief financial officer, John Harris, is scheduled to leave the firm soon, a spokesman confirmed.
?John has indicated he is going to leave sometime late summer or so,? said Carlyle spokesman Chris Ullman. ?He is leaving for family and personal reasons that are all positive and will enable him to fulfill some personal goals.?
Harris has overall responsibility for the firm's investor reporting, internal controls and financial management. As CFO, Harris is said to have been instrumental in structuring Carlyle's private equity funds and negotiating terms with limited partners. In addition, he has coordinated the development of Carlyle's global compensation programs.
Since its founding in 1987, Carlyle has grown into the largest private equity firm in the world, according to a recent ranking of private equity firms from sister publication Private Equity International's PEI 50 ranking of the world's largest private equity firms. Carlyle has more than $56 billion under management and more than 780 employees across the firm's 19 offices. According to its website, the firm has invested $26.4 billion in 601 transactions.
Before joining Carlyle in April 1997, Harris was a vice president with Golub Capital, a private equity firm. At Golub, Harris focused on middle market transactions. Previously, he was a senior manager with accounting firm Arthur Andersen. Harris graduated from the University of Virginia.
In March, Carlyle co-founder William Conway reportedly criticized the credit decisions of lenders to the private equity industry and suggested that his own firm should start targeting less risky deals with lower returns. The comments were made in an internal memo, seen by trade publication Financial News.
Conway's comments could involve a significant shift in strategy for the firm, which has been expanding to the Middle East and North Africa region, and Asia. ?Liquidity has led to a significant reduction in risk premiums. Our strategy should evolve to take lower risk deals and earn lower returns,? he said in the memo.
The only solution, said Conway, was for Carlyle to take a more cautious approach to investments: ?We should redouble our focus on deals with downside protection ? asset coverage, multiple and early exit paths, strategic partners, government protection, consumer needs, controllable capital expenditures and defensible market positions.?
A search for a new Carlyle CFO is already underway.
?We're looking now, so as soon as we find the right candidate, that person will come on board,? said Ullman.
Harris is expected to continue his association with Carlyle, acting as a senior advisor following his departure.
Blackstone hires Balloch as ?CAO? of private equity group
New York based The Blackstone Group has hired Susan Balloch as executive director in its private equity group. Balloch will be responsible for overall management and administrative aspects of the group's activities. She joins from Welsh, Carson, Anderson & Stowe, where she was in their investor relations group. Before that, she was managing director and chief administrative officer for global investment banking and private equity at Credit Suisse. Tony James, president of Blackstone, said in a statement: ?Her integral involvement in such a wide variety of investment banking and business management functions over the past twenty years gives her a deep understanding of effective management for such a group.?
IMF report adds grist to the mill
The International Monetary Fund's Global Financial Stability report has suggested that leveraged buyouts are one of the biggest threats to global economic stability. The IMF argues that the industry has been lulled into a false sense of security by the benign economic conditions, including the wider availability of debt and historically low interest rates. This has encouraged buyout firms to increase leverage and take greater risks, it says. It is also worried that the due diligence performed by some investors is weakening as the need for deals increases. It believes that the industry's recent success has led to a weakening of credit discipline and to less stringent agreement between lenders and buyout firms. The solution is to improve awareness, the IMF believes.
Barclays hires Mezz Management fundraiser
Barclays Private Equity Partners, one of Europe's largest mid-market investors, has hired Christiian Marriott to grow into the role of head of investor relations. He wil start his new job in May. Marriott spent seven years at Mezzanine Management, where he looked after fundraising and investor relations for the subordinated debt and sponsorless mezzanine provider. Barclays Private Equity's client services are currently managed by Brian Blakemore, a Barclays veteran who has been in the role since 2001. According to market sources, Blakemore is planning to retire in 2008 and will work closely with his chosen successor to ensure a smooth handover. Both firms declined to comment on the move.