The employees will join the US private equity group’s financial services group, which was formed only a few months ago and is considering raising a fund dedicated to investments in the sector.
The mix of backgrounds among the six, including both banking industry expertise and regulatory know-how, signals that Carlyle may be looking to take advantage of troubles in parts of the financial services industry hit by the mortgage meltdown.
“The dislocation in the mortgage industry generates distress, which historically has created opportunities,” said Ned Kelly, co-head of Carlyle’s financial services team. “We are most interested in companies that we believe will have strong prospects going forward and not so much in temporary disruptions in asset values.”
Mr Warner, the 61-year old Ohio native who engineered the $31bn merger of JPMorgan and Chase in 2000, will be a senior adviser at Carlyle. The other hires include David Moffett, former vice-chairman and chief financial officer of US Bancorp, who will be a senior adviser, and Randal Quarles, former under secretary of the US Treasury for domestic finance, who will be a managing director.
Mr Warner’s move, which is expected to be announced Monday, is a sign that the credit squeeze, while dramatically slowing the pace of new buy-out deals, is not deterring executives from joining private equity firms.
“Private equity has shown itself to be resilient through up-and-down markets, so I’m confident the industry will continue to play an important role in the global economy going forward,” said Mr. Warner.
In the past, private equity groups have shied away from investing in financial services companies because of the tight regulatory requirements and the difficulty in applying debt to portfolio companies.
But recently, financial services buy-outs have become more popular. In April, JC Flowers, a New York-based private equity group, sealed the largest private equity deal in the sector, worth $26bn, when it led a consortium to acquire SLM, the parent company of Sallie Mae, the US student lender.