Carlyle Group Looks To Big Blue For Inspiration –

The Carlyle Group last month announced the hiring of former IBM Corp. CEO Louis V. Gerstner as its new chairman, replacing Frank C. Carlucci, who will move on to become chairman emeritus of the firm. The move will be effective Jan. 7.

Gerstner currently sits as chairman of IBM, although he will step down from that position at the end of this year. He previously headed the computer giant as CEO until his retirement last March.

Carlyle approached Gerstner earlier this year about being a keynote speaker at an investor conference the firm was sponsoring, and from that meeting the relationship between the two sides evolved. Daniel D’Aniello, a managing director and co-founder at Carlyle, said the transition does not represent a new direction for the firm. “The model will be the same, but Lou will help make it better,” he said, citing Gerstner’s business acumen and his experience in integration as two of the primary factors in the decision.

Carlyle outlined in a statement that Gerstner will commit approximately 20% of his time providing strategic guidance on Carlyle’s global business, adding management input to the firm’s portfolio companies and helping to review and approve Carlyle’s global investments.

This is not Gerstner’s first foray into the buyout world. Prior to IBM, Gerstner served as Kohlberg Kravis Roberts & Co.’s handpicked successor to head RJR Nabisco after their highly publicized buyout of the company, still the largest LBO of all time. Prior to that, Gerstner served as the second in command at American Express.

Gerstner’s hiring signals a divergence from previous Carlyle appointments, as he is not professionally involved in politics. Frank Carlucci had served as Secretary of Defense under the Reagan Administration, and former President George Herbert Walker Bush has previously been a senior advisor to the firm. Right now, James Baker III, the secretary of state under the Bush administration, serves as the firm’s senior counselor, while Arthur Levitt, SEC chairman from 1993 to 2001, serves as a senior advisor. Additionally, Former Prime Minister of England the Rt. Honorable John Major is the chairman of Carlyle Europe.

The Carlyle Group is among the world’s largest private equity firms with over $13.9 billion of capital under management committed to 23 different funds. Carlyle focuses on a number of industries, including aerospace and defense, consumer and industrial, energy, healthcare, IT, transportation, telecommunications, media and financial services.