Good morning Hubsters. MK Flynn here with today’s Wire.
Mega Merger Monday. The week kicks off with a big pharma deal: Pfizer just announced it is buying Global Blood Therapeutics for $5.4 billion. GBT makes Oxbryta, a daily pill for patients with sickle cell disease.
In May, Pfizer agreed to buy migraine pill maker Biohaven Pharmaceutical for $11.6 billion.
Succession. Finding and retaining talent is the Number One challenge for private equity firms these days, and apparently that holds true even at the top spot of the biggest PE firms.
In a surprising move, Carlyle announced last night that CEO Kewsong Lee is stepping down.
The abrupt departure comes months before Lee’s five-year contract was due to finish at the end of 2022, Private Equity International’s Carmela Mendoza points out.
Carlyle named Lee sole CEO in 2020, less than three years after the firm’s founders – William Conway, David Rubenstein and Daniel D’Aniello – handed over the reins to Glenn Youngkin and Lee.
Lee joined Carlyle in 2013 as deputy CIO for corporate private equity and was previously a dealmaker at Warburg Pincus.
Conway will serve as interim chief while the search for a new candidate takes place. Lee will assist in the leadership transition, according to Carlyle. An office of the CEO has been established, comprised of Peter Clare, CIO for corporate private equity and chairman of Americas PE; Mark Jenkins, head of global credit; Ruulke Bagijn, head of global investment solutions; Curtis Buser, CFO; Christopher Finn, COO; and Bruce Larson, chief human resources officer.
ESG under siege. Lynn Forester de Rothschild, or Lady de Rothschild, as she’s referred to in the UK, has had an incredible career, perhaps best known as the former chief executive of the EL Rothschild family office, which includes The Economist as one of its holdings. In recent years, she has been a leading voice for the ESG movement. Putting her money where her beliefs are, she founded Inclusive Capital Partners, an investment firm focused on generating long-term returns while making a positive impact on the environment and society.
Buyouts’ Gregg Gethard interviewed Forester de Rothschild recently. Here’s a brief excerpt:
ESG appears to be at an inflection point. There are still many questions about how to actually implement change.
ESG is under siege. Some of the criticism is very well deserved. Attacks on ESG are justified, like the extreme case we recently saw at a financial institution in Germany where there was an actual misrepresentation of ESG.
But even beyond flagrant misrepresentation, there is way too much ESG product being shopped. There are a lot of ESG products presented by managers to make pension systems feel good by putting on an ESG label and there is nothing in the investment process that actually advances those goals. Shame on the asset management industry for not taking the legitimate desires of pension systems to invest in ESG seriously.
Read the full Q&A here.
And also check out "In defense of ESG: A response to The Economist," in which the founder of affiliate publication Responsible Investor responds to the latest high-profile critique of the concept.
Recommended reading: Carried interest is safe from a tax increase, thanks in part to Senator Kyrsten Sinema (D., Ariz.) -– at least for the moment. If you want to learn more about the lobbying efforts that went on behind the scenes in the last few weeks, as well as the history of how the American Investment Council evolved over the last 15 years, check out the Wall Street Journal’s story on the “tax-code provision with nine lives.”
That wraps up today’s Wire. I’ll be back with more tomorrow.
Happy dealmaking,
MK
Read the full wire commentary on PE Hub ...
