WASHINGTON: Carlyle Group Inc’s Harvey Schwartz says recent volatility in credit markets is on his “worry list” as the firm’s chief executive officer (CEO), but so far he sees nothing that suggests conditions are deteriorating.
Looking at Carlyle’s portfolio companies, “data suggests that companies are growing, employment is steady, inflation is a little sticky, but there’s nothing in the immediate horizon that suggests that things are crumbling,” Schwartz said in an Oct 19 interview on Bloomberg Television.
“Having said that, late cycle, it should be on a worry list.”
Schwartz spoke alongside Oracle Red Bull Racing Principal Laurent Mekies in an interview from the sidelines of the Formula 1 United States Grand Prix in Austin.
Last month, the US$465bil alternative asset manager announced it had formed a multi-year partnership with the Formula 1 team.
Credit markets have been on edge since the implosions of auto lender Tricolor Holdings and car-parts supplier First Brands Group, with JPMorgan Chase & Co CEO Jamie Dimon warning about the potential for more than one “cockroach”.
Shares of two US regional banks fell last Thursday after they said they were victims of loan fraud.
Alternative asset managers have been striking partnerships with sports teams and athletes as they seek to strengthen their brands beyond traditional institutional investors.
Private equity firms are moving into the retirement industry – spurred by President Donald Trump’s executive order over the summer – and are looking to make inroads with individuals who may buy their investment products.
Sixth Street Partners co-chief investment officer Josh Easterly has criticised some peers for focusing more on marketing private investments than performance.
Carlyle’s partnership with Red Bull is important for reaching a global audience but not at the expense of the firm’s investment performance, Schwartz said.
“You don’t have success without performance.
“You can’t sacrifice it. It has to stay number one,” he said.
Schwartz, clad in an Oracle Red Bull Racing jacket, and Mekies touted their partnership.
Both Carlyle and Formula 1 are trying to broaden their reach with consumers, Mekies said.
He added that Red Bull will probably make a call about who will sit in the second seat next year alongside star driver Max Verstappen in “another couple of races”. — Bloomberg
