Chappuis, 43, will run the re-branded Solutions business at Carlyle, the second-largest U.S. private-equity firm, according to a statement today from the Washington-based company. Arthur Lev will replace Chappuis as head of Morgan Stanley’s AIP, according to a memo sent to the bank’s employees.
Carlyle is seeking to have Chappuis expand the fund-of- funds business in the same way Michael “Mitch” Petrick, 51, who joined from Morgan Stanley in 2010, has built Carlyle’s Global Markets Strategies segment, which manages hedge-fund and structured-credit investments. The fund-of-funds unit started in 2011 with the acquisition of a 60 percent stake in AlpInvest Partners BV, a Dutch money manager and Europe’s largest investor in private-equity funds at the time.
“Jacques has an extraordinary track record of innovation in the development and delivery of products and services that meet and anticipate investor needs,” Carlyle co-CEO David M. Rubenstein, 63, said in an e-mailed statement. “We are delighted that he will bring his experience and energy to take our solutions business to a new level of success.”
Carlyle bought the AlpInvest stake as part of its broader effort to diversify beyond leveraged buyouts, which produce volatile earnings and delivered lower returns following the U.S. financial crisis. Chappuis will be charged with creating new offerings for Carlyle’s limited partners, including customized accounts, fund-of-funds investments, portfolio advice and risk management, Carlyle said in the statement.
“Demand for investment product customization and specialization increases by the day,” Chappuis said.
Carlyle’s fund-of-funds business has $44 billion of assets under management, according to the firm’s most recent earnings report. It produced 2.6 percent -- or $18 million -- of the company’s $688 million in distributable earnings last year. Global market strategies, which has been the fastest-growing division for Carlyle, earned $168 million in 2012.
Chappuis joined Morgan Stanley in 2006, after working at Citigroup Inc. and Boston Consulting Group Inc. He served as head of alternative investments for Morgan Stanley’s retail brokerage division before heading AIP.
Lev, 51, will take on leadership of AIP in addition to his role leading the long-only asset-management business, according to the memo from Greg Fleming, 49, who oversees the New York- based bank’s asset-management division. Matt Burkhard, a Morgan Stanley spokesman, confirmed the contents of the memo, a copy of which was obtained by Bloomberg News.
Morgan Stanley Chief Executive Officer James Gorman, 54, said soon after he took over in 2010 that “there’s no reason” the firm couldn’t have the world’s largest fund-of-funds business. AIP has about $29 billion of assets under management and advisement, a 53 percent increase over the last three years, according to the memo. Blackstone Group LP (BX)’s Alternative Asset Management, which has $46 billion in assets under management, calls itself the world’s biggest.
AIP manages portfolios of hedge funds, private-equity and real-estate funds, helping investors spread their money across holdings. Mustafa Jama leads AIP’s hedge-fund group, while Thomas Dorr heads private-equity investments and David Boyle and Paul Vosper run the real estate group. Rui De Figueiredo leads AIP’s portfolio solutions group.
Lev previously held roles as chief strategy officer of Morgan Stanley’s traditional asset-management unit and general counsel of Morgan Stanley Investment Management. He left Morgan Stanley in 2002 to join Greenwich, Connecticut-based FrontPoint Partners LLC, returning in 2006 when the bank bought the hedge fund.
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