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Sarkozy Discusses Carlyle Move
In an exclusive interview with IDD, Sarkozy talks about his decision to leave UBS for Carlyle.
March 5, 2008
Oliver Sarkozy’s move to The Carlyle Group from UBS contains a hint of irony.
When Sarkozy assumes his new role as managing director and co-head of Carlyle’s global financial services group on April 1, his team will include Keith Taylor, a former FIG investment banker at Goldman Sachs and JPMorgan. While at JPMorgan in 2004, Taylor worked with Sarkozy on SunTrust Banks’ $7 billion acquisition of National Commerce Financial, on which they advised the seller. “I thought extremely highly of him, and when Carlyle hired him, I was trying to hire him and convince him to stay in investment banking,” says Sarkozy, adding with a laugh, “He proved himself to be smarter than me.”
Sarkozy will work out of the private equity firm’s New York office and work closely with David Zwiener, the global financial services group’s other co-head. Carlyle formed the team, comprised of nine professionals including Sarkozy, in June 2007. Besides Sarkozy and Zwiener, former chief financial officer of The Hartford Financial Services Group, the division includes David Moffett, who used to be vice chairman and CFO of US Bancorp; Randal Quarles, a former US Treasury undersecretary for domestic finance; and John Redett, with whom Sarkozy worked at Credit Suisse First Boston.
Oliver Sarkozy
“I feel extremely comfortable with the team Carlyle has and I think we’ll be able to hit the ground running without having to be distracted by building a team or infrastructure,” says Sarkozy. “Depending on the size of the opportunities that ultimately manifest themselves, we may need to selectively add to the team, but I view that as a small part of what we have to do.”
Sarkozy is currently joint global head of FIG investment banking at UBS and plans to maintain his affiliation with the Swiss bank via an advisory role. “Whenever you move, you’re upsetting ongoing projects and assignments,” he says. “Some clients and their boards, while they have hired UBS, are used to a specific person, in this case me, giving them advice. The idea here is to give the UBS clients who might be impacted a very real sense that I will continue to be available to them through UBS for whatever their needs might be.”
Although he is leaving the firm, Sarkozy expects to work with his UBS colleagues on Carlyle mandates. “We will need help from investment banks in sourcing potential opportunities, and the hope is that the UBS team that I spent years working with will be well-positioned to help us through some of those issues.”
UBS has strong ties to Carlyle, in part because its wealth management division is one of the largest distributors of Carlyle’s seeder funds. Despite Carlyle’s relationship with UBS, Sarkozy says he only began closely interacting with co-founder David Rubenstein and other senior partners over the course of the past three weeks. “Historically, private equity just wasn’t that prevalent a component of what we did here in FIG because the environment wasn’t conducive to it.”
The situation is changing, however, and that metamorphosis is one of the reasons Sarkozy decided to make the leap to Carlyle. “Private equity is going to have a role to play in the recapitalization and restructuring of this industry,” he says. In the past, financial institutions were not common targets for buyout shops due to regulatory restrictions and because they did not lend themselves to additional leverage. Today, “issues surrounding the industry relate directly to an excess of leverage, whether it be subprime or something else, and as a result, I think there are going to be attractive risk-adjusted returns that can be garnered here, without bringing more leverage to bear.”
As for regulatory limitations, “this industry is in a crisis, and I think the regulatory agencies will look towards private equity to help address some of these issues because the public markets will have a hard time doing that.” Sarkozy adds, “Clearly, there’s a need for capital and there is investor interest in providing that capital, as evidenced by all the recaps that have occurred to date. I think there’s a demonstrated need for expertise in how these investments ought to be priced and structured, given that many of the recaps undertaken to date haven’t worked out quite as well as the investors would have liked. For all those reasons, I felt this was a unique time and a unique opportunity as I thought through my alternatives.”
Find out more information about people mentioned in this article from our People Database:
P. Oliver Sarkozy
Edouard de Vitry
David Rubenstein
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