Carlyle Finance Chief Peter Nachtwey Leaves Firm

Peter Nachtwey, the chief financial officer of Carlyle Group, is leaving the world’s second-biggest private-equity firm as it plans a public share sale to meet the challenge of raising money for buyout funds.

Glenn Youngkin will assume the role of interim CFO, Christopher Ullman, a spokesman for Washington-based Carlyle, said in a telephone interview yesterday. Nachtwey will become CFO of Legg Mason Inc., the Baltimore-based asset management firm that oversees $668 billion, Legg Mason said today.

“Pete decided to pursue a great new opportunity for him,” Ullman said. “We thank him for his service to Carlyle and wish him continued success.”

Carlyle is gearing up for an initial public offering to amass permanent capital as wealthy individuals and institutions that traditionally backed private equity firms become more reluctant to commit fresh capital. Nachtwey, a former Deloitte & Touche LLP partner, joined Carlyle in 2007, when the firm first considered an initial public offering.

Carlyle plans to file IPO papers late in 2011, people with knowledge of the matter said earlier this month. The stock sale may not occur until the following year, said the people, who asked not to be identified because the plans are private.

Photographer: David Rogowski/Bloomberg

Carlyle Group headquarters in Washington, D.C.. Close

Carlyle Group headquarters in Washington, D.C..

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Photographer: David Rogowski/Bloomberg

Carlyle Group headquarters in Washington, D.C..

The firm has considered an IPO since at least June 2007, when larger rival Blackstone Group LP began trading on the New York Stock Exchange. Nachtwey’s clients at Deloitte included Blackstone.

Reluctant Investors

Investors have been reluctant to pony up for new buyout pools, given that the industry has $461 billion in committed, unspent capital already, according to London researcher Preqin Ltd. Half of the private-equity funds worldwide that started investing in 2006 through 2009 were posting a loss of at least 4 percent as of the end of June, according to Preqin data.

Washington-based Carlyle has participated in 33 deals this year, with a total value of $16 billion, higher than any rivals, Bloomberg Businessweek reported in its Dec. 13 edition. It beat out Blackstone and TPG Capital to buy NBTY, maker of Nature’s Bounty, MET-Rx and Solgar nutritional supplements, for $3.8 billion in July. In October, Carlyle agreed to buy CommScope, a manufacturer of fiber-optic networks, for $3.9 billion.

Carlyle returned $5.7 billion to clients through the third quarter -- more than Blackstone and KKR & Co. combined -- compared with $2.4 billion in all of 2009. It funded the payouts by selling nine companies and adding debt to others.

Carlyle says it has raised $3.7 billion in 2010. That’s up from $1 billion last year but nowhere near the $20 billion it raised in 2008.

Blackstone

When Blackstone went public, it said having stock would give it a currency to buy companies, recruit and retain employees and enable founders Stephen Schwarzman and Peter G. Peterson to convert their ownership stakes into shares and cash. The New York-based company has fallen 45 percent from the $31 IPO price.

Carlyle’s plans for an IPO were put on hold when debt markets froze during the financial crisis. The firm instead sold a 7.5 percent stake to Mubadala Development Co., an arm of the Abu Dhabi government, in September 2007.

Nachtwey’s departure from Carlyle was previously reported by the Financial Times.

Carlyle, which was founded in 1987 by William Conway, David Rubenstein and Daniel D’Aniello with $5 million in seed capital, would use proceeds from the IPO to invest in its funds and continue to expand beyond corporate buyouts.

Earlier this month, Carlyle bought a 55 percent stake in Claren Road Asset Management, a $4.5 billion hedge fund. The firm has also hired several high-level bankers, including Mitch Petrick, Morgan Stanley’s former sales and trading chief, to help raise funds and move into new markets.

KKR, which also weighed going public during the IPO boom, later merged with a European-listed affiliate and moved the stock to New York. It has gained 22 percent since the switch to the New York Stock Exchange in July.

To contact the reporters on this story: Cristina Alesci in New York at Calesci2@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net.

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