Centerbridge co-founder Aronson to give stake back at retirement

Centerbridge Capital co-founder Jeff Aronson will give his ownership stake in the firm back to the company upon his retirement.

Succession planning can be a trickly process for private equity firms, with founders who at times are reluctant to step back and make room for the next generation of leadership. Limited partners are focused on a firm’s plans for a future beyond the founders and lack of such planning can interfere with fundraising and growth.

An industry source confirmed Aronson’s decision to give his stake back to Centerbridge when he steps down, which was discussed at Washington State Investment Board’s private markets committee meeting held on September 7. Buyouts watched a broadcast of the meeting.

The source added that Aronson has no plans to retire.

“If and when he retires, it will be done with notice given to all the stakeholders,” the source said.

Aronson’s decision follows the same path of Centerbridge co-founder Mark Gallogly, who stepped down from his role in 2020, according to the industry source.

“It’s about ensuring the long-term success and generational transfer of the firm,” the source said about Aronson and Gallogly’s decision. “Mark made his announcement about a year before he retired. I might expect the same from Jeff.”

Aronson was joined by senior managing directors Steven Silver and Matthew Kabaker in detailing Centerbridge’s fifth flagship fund at the meeting. The committee approved a $400 million commitment to Fund V.

“The guys running the show are Steve and Mark. I don’t get the vibe he’ll stay much longer and be one of the guys roaming the halls in a robe,” said Kariym McHoney, a member of Washington State’s private equity team in response to a question from a committee member.

Aronson focuses largely on Centerbridge’s private credit business, said Tom Cawkwell, Albourne’s head of private markets at the meeting. Albourne serves as Washington’s consultant.

According to Buyouts’ database, Centerbridge is the GP of four private credit funds.

In its presentation, the firm said it manages $35 billion across its strategies. Its private equity assets total $18 billion, private credit holdings hold $15 billion with real estate comprising $3 billion.

Aronson co-founded Centerbridge in 2005. Previous to that, he led distressed securities and leveraged loan efforts for Angelo, Gordon & Co, according to Centerbridge’s website.

Kabaker has worked at Centerbridge since 2011. Previous to that, he was a senior adviser to former US Treasury Secretary Timothy Geithner and active in the establishment of the Treasury Department’s Office of Capital Markets created in the wake of the 2008 financial crisis.

Silver joined Centerbridge in 2006 after working as a managing director and partner at Vestar Capital Partners.