Carlyle names IBM’s Louis Gerstner Chairman

Louis Grestner is to replace Frank Carlucci as chairman of US private equity firm Carlyle Group.

(PrivateEquityCentral.net) US private equity firm The Carlyle Group today announced the appointment of former IBM chairman Louis Gerstner as chairman to replace Frank Carlucci, who is becoming chairman emeritus after a nine year tenure at the helm of the firm.

 

Gerstner will become chairman of Carlyle in January 2003. Although Gerstner is co-chair of Achieve, an organization created by US governors and business leaders to push for higher academic standards in public schools, he has no direct political experience. The appointment of a career businessman as chairman thus marks a departure from Carlyle’s policy of recruiting high-profile political figures for key positions.

 

Significant appointments at Carlyle from the world of politics include George Bush, US President from 1989 to 1993; Anand Panyarachun, Prime Minister of Thailand from 1991 to 1992; Fidel Ramos, President of the Philippines from 1992 to 1998; John Major, Prime Minister of the UK from 1990 to 1997; Arthur Levitt, chairman of the Securities and Exchange Commission from 1993 to 2001; and William Kennard, chairman of the Federal Communications Commission from 1997 to 2001.

 

According to a press release, Gerstner will commit approximately 20 per cent of his time to his new role, providing strategic guidance on Carlyle’s global business activities, giving management input to Carlyle portfolio companies, and serving on the committees that review and approve Carlyle’s global investments.

 

Gerstner served as chief executive officer of IBM from 1993 until March this year, and has been chairman of IBM since 1993. He is scheduled to retire at the end of the year. Under Gerstner’s leadership through year-end 2001, IBM’s share price increased more than 800 per cent, and its market value grew by $180bn.

 

Prior to joining IBM, Gerstner served for four years as chairman and chief executive officer of RJR Nabisco. This was preceded by an eleven year career at American Express, where he was president of the parent company and chairman and chief executive officer of its largest subsidiary, American Express Travel Related Services.  Prior to that, Gerstner was a director of the management consulting firm of McKinsey & Co, which he joined in 1965.

  

With more than $13.9bn under management, The Carlyle Group invests in buyouts, real estate, high yield, and venture in the United States, Europe, Japan, and Asia, focusing on aerospace and defence, consumer, industrial, energy, healthcare, technology, and telecommunications and media. Since 1987, the firm has invested $7.2bn and achieved a realized internal rate of return of 36 per cent. The Carlyle Group employs 510 people in 21 offices in eleven countries.