Whether part of a broader succession play, a strategic hire or driven in part by the economic and psychological shift surrounding the ‘Great Resignation’, the industry’s investor and GP communities had a string of surprising movements this year.
The sudden exit of Carlyle Group’s former chief executive is most noteworthy. Kewsong Lee abruptly stepped down from his post in August, months before his five-year contract was due to finish at the end of 2022. His exit was reportedly triggered by negotiations over a new contract which clashed with the wishes of Carlyle’s board. The PE heavyweight remains without a permanent CEO, even as it seeks to raise as much as $22 billion for its eighth North America fund.
In July, Partners Group’s CEO David Layton said he would relinquish the reins on the firm’s private equity business in early 2023 with the appointment of Zurich-based Wolf-Henning Scheider as partner and head of private equity. Scheider is chairman of the board of management at ZF Group, which manufactures systems for passenger cars, commercial vehicles and industrial technology.
Layton told Private Equity International in August that the appointment is part of a consistent message that the firm has been communicating for several years: “That the PE business is no longer a transactional business… That we are evolving our culture… to one that’s much more about operational excellence, strategy and business development.”
MidEuropa founder and former managing partner Thierry Baudon, meanwhile, joined new GP-stakes firm Armen as a senior MD and board member, PEI reported in the summer. He joined heavyweights Dominique Gaillard, who spent over two decades at Ardian, and Laurent Benard, who spent 17 years at Capza, as the firm seeks to raise €400 million for its debut offering.
On the investor side, retention was also a prevalent issue.
Steve Moseley, the former head of alternative investments at Alaska Permanent Fund, departed the sovereign wealth fund and returned to New York in June to join Wafra as a managing director after almost eight years in Juneau. Moseley described the talent crunch in the LP community as “a challenge that will ultimately derail our success” in a Capital Allocators podcast last year.
The $81 billion APFC has witnessed an “unprecedented” number of staff leaving this year, according to a July board meeting. “The root cause is a dated compensation structure that is materially below par,” APFC’s acting chief executive Val Mertz noted during the meeting.
In October, PEI broke the news that Ontario Teachers’ Pension Plan parted ways with Karen Frank, global head of equities, in early December after a roughly two-year stint at the pension. It is unclear where Frank is headed next and who her replacement will be.
Frank had been responsible for a team of more than 140 professionals globally who invested across the equities spectrum, including in direct private capital, high-conviction public equities, and allocations to private equity and other investment vehicles, according to her LinkedIn.
Andrew Claerhout, former partner and co-head of infrastructure at Searchlight Capital Partners, meanwhile, joined Abu Dhabi Investment Authority in July as its head of Americas for private equity. He spent 13 years at OTPP prior to Searchlight.
The California Public Employees’ Retirement System had also seen a series of people moves this year. The pension giant named Anton Orlich as its managing investment director for growth and innovation, a new position at CalPERS. He will be responsible for developing strategies and investment deals focused on higher growth, higher risk and reward opportunities. The pension is merging its growth and innovation programme with its private equity unit under Orlich. He succeeds outgoing private equity head Greg Ruiz, who joined multi-family office Jasper Ridge Partners this month.
In March, public pension veteran Nicole Musicco took over as chief investment officer at CalPERS, following a lengthy search of a replacement for former CIO Ben Meng. She spent the bulk of her career at OTPP and “grew up in the defined benefits industry”, according to her post on LinkedIn about the appointment.
As Gail McManus, founder of executive search firm Private Equity Recruitment, told us earlier this year, the period of “Great Reflection” is making it more difficult for firms and organisations to attract and retain talent in both junior and senior roles. McManus, whose firm has worked with the likes of Hamilton Lane, EQT and Park Hill Group, says the biggest change in the last 12 to 18 months has been that people are really thinking about what matters to them.
“Every move is a well thought through move. With the market tightening dramatically now, people have to have a reason to move; they have to see they are going to something better.”