Carlyle Said to Hire Ex-Morgan Stanley Trading Chief Petrick

March 9 (Bloomberg) -- Mitch Petrick, Morgan Stanley’s former sales and trading chief, will join private-equity firm Carlyle Group to head the company’s distressed debt and leveraged finance business, said people briefed on his move.

Petrick, 48, left Morgan Stanley after two decades earlier this year following his demotion in December, said one of the people, who declined to be named because the talks are private.

Carlyle, the world’s second-biggest private-equity firm, is seeking to profit outside the traditional leveraged buyout business after a two-year dealmaking slump. Larger competitor Blackstone Group LP is expanding its debt business through its GSO Capital unit, and KKR & Co. has formed a group to underwrite debt and equity offerings.

Carlyle’s leveraged-finance team manages 22 funds with about $13 billion of assets under management, according to the firm’s Web site. Carlyle, based in Washington, has raised two funds that invest in debt and equity of “financially distressed companies,” according to the site.

Petrick had been Morgan Stanley’s head of sales and trading for two years before being ousted as part of a broader management shuffle in December. Revenue from sales and trading was $8.6 billion in 2009, which was reduced by $5.5 billion of charges related to the firm’s credit spreads. That fell short of rivals including Goldman Sachs Group Inc. and JPMorgan Chase & Co. Petrick had previously been co-head of global high yield and leveraged finance and co-head of the global credit group.

Neal Shear, another former Morgan Stanley trading chief, was hired by Leon Black’s private-equity firm Apollo Management LP in May 2008 to help start its commodities business. He left Apollo slightly more than a year later and joined UBS AG this January.

Announced private-equity deals worldwide dropped 71 percent to $84.6 billion last year from 2008, according to data compiled by Bloomberg.

Carlyle spokesman Christopher Ullman said he couldn’t comment. The Wall Street Journal reported Petrick’s hiring earlier today.

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net; Jason Kelly in New York at jkelly14@bloomberg.net.