As an attorney for Covington & Burling, David Marchick focused on international trade and regulation and worked on some big cross-border deals. On Oct. 22, he is going to assume a newly created post as global head of regulatory affairs for The Carlyle Group. So Jeremy Harrell, managing editor of Buyouts magazine (a PE Week sister publication), sat down with Marchick. The following discussion was edited for space and clarity.
Q: How did this job come to be?
With 33 offices in 21 countries, Carlyle’s geographic reach compares to some of the largest companies in the world. So the firm has felt for some time the need for a focused approach to dealing with governments and regulatory issues. They’ve obviously done extremely well, but as they’ve gotten substantially bigger and expanded globally, the complexity of issues has also expanded and they felt it was appropriate to have an in-house regulatory and government affairs specialist who could enhance the way they interact with governments and regulators around the world.
Q: Do you expect to devote any of your time to industry issues—such as the carried interest tax debate—or will you focus solely on Carlyle’s deals?
I see myself working on both Carlyle-specific issues and industry issues. The industry faces a range of issues around the world, not just in the United States, and I expect to play a role in the worldwide industry issues.
I also hope to be a resource to Carlyle’s investment professionals throughout the entire life cycle of their investments—from the due diligence stage to the investment stage to the management stage to the exit stage.
Q: How much of your time will be spent on Carlyle’s overseas activities?
More than 50% of Carlyle’s investments are overseas. So my time and energy will be split domestically and overseas. It depends more on which industry has more regulation. In real estate and consumer products, there’s not a lot of regulation. But there are sectors that are more heavily regulated that will require more of my time.
Q: What’s an example of how a sophisticated regulatory approach by Carlyle would deliver benefits to a deal or portfolio company?
Carlyle sold two aerospace companies to an entity based in Dubai earlier this year, and that required a sophisticated government affairs and regulatory strategy that involved executive branch and congressional outreach, as well as outreach to other stakeholders and other opinion leaders, including the press.
Q: Do you think you’ll be doing more of your work before a deal closes or after it’s closed?
This is a new job and a new function and some of it I’m going to have to make up as I go along. I’m going to focus on the areas where I can add the most value for our investors.