Carlyle taps Lee to replace Petrick as head of $34 bln GMS unit

Carlyle Group shuffled top management at both its $34-billion-asset Global Market Strategies hedge fund and leveraged finance unit as well as its Energy and Natural Resources group, the firm said.

Kewsong Lee will supervise global market strategies while maintaining his title as deputy chief investment officer, Carlyle said. Lee brings about 25 years of experience in financial services, including launching and supervising the capital-market operations at Warburg Pincus with a focus on leveraged finance.

He also served on three outside investment committees for Arch Insurance, Lincoln Center and Choate, where assets are deployed primarily in credit, fixed income and structured debt products.

Mitch Petrick steps down as managing director of global market strategies to become a senior adviser to the firm. Petrick plans to form his own investment-management company.

Carlyle didn’t provide the name of Petrick’s company and a spokesman declined to comment on whether Carlyle would invest in it. Petrick could not be reached for comment.

Petrick, who joined Carlyle from Morgan Stanley in 2010, worked at global market strategies during a time of growth in the unit to $34 billion of assets under management this year from $20.5 billion in 2011.

Among his milestones at the firm: a collateralized-loan-obligation business at global market strategies second only to Blackstone Group; a solid-performing business-development company called Carlyle GMS Finance and healthy distressed and mezzanine loan business, according to a person familiar with the firm. Petrick also helped Carlyle launch a new Asia credit business.

Petrick also worked on Carlyle’s 2011 purchase of Churchill Financial Group, although much of Churchill’s senior leadership left the firm by the end of 2014. Last year, TIAA-CREF relaunched Churchill with ex-Carlyle executives such as Ken Kencel.

But under Petrick’s leadership, global market strategies ran into trouble with its hedge-fund units such as Claren Road Asset Management and Vermillion Asset Management. Carlyle’s hedge funds reported $1.8 billion in redemptions for the first quarter.

Overall, the global market strategies unit’s funds returned negative 12 percent in the first quarter, compared with a gain of 3 percent in the year-ago period.

Natural Resources performance falls

Meanwhile, the firm’s natural resources fund portfolio dropped 2 percent in the first quarter and its legacy energy portfolio dropped by 3 percent.

Glenn Youngkin will supervise the firm’s energy and natural resources group, in addition to his current role as president and chief operating officer of the firm, Carlyle said.

Kenneth Hersh, who formerly led the natural resources group, becomes deputy chief investment officer for energy and natural resources, reporting to Bill Conway, co-CEO of Carlyle.

Hersh, also chairman and CEO of NGP Energy Capital Management, will begin on May 31 as CEO of the George W. Bush Presidential Center. His role at NGP will stay the same.

Action Item: Carlyle’s most recent results, http://bit.ly/1SRsLrF

Photo of Kewsong Lee courtesy of Carlyle Group