Carlyle, the favorite private equity firm of Washington D.C. and the "military industrial complex", has named two executives as successors to the ageing founders of the $158 billion fund, the latest rare move in an industry where similar succession plans are not usually telegraphed in advance. Kewsong Lee and Glenn Youngkin have been appointed as co-chief executive officers, while Peter Clare will become co-chief investment officer alongside one of the founders.

Rubenstein, right, and Conway, left, will give up their CEO roles while Daniel 
D’Aniello, will relinquish chairmanship.

They replace current co-CEOs David Rubenstein and Bill Conway, both 68, who relinquish their roles and become co-executive chairmen of the board, according to the FT. Conway will continue in his role as co-chief investment officer while Daniel D’Aniello, 71, will relinquish his role as chairman and will become chairman emeritus. D’Aniello will continue to be on Carlyle’s board and executive group. They will both continue to be members of Carlyle’s executive group.

Lee will focus on the company’s corporate private equity and global credit businesses, as well as corporate strategy and development, and capital markets. Youngkin will oversee Carlyle’s real estate, energy and infrastructure businesses, the investment solutions segment as well as investor relations and external affairs.

The new appointees have been groomed for years by the founders and the succession planning has been in the works at Carlyle for months. The promotions follow a similar move by KKR which in July elevated two executives to leadership roles.

Although KKR positioned the roles as potentially succeeding the founders in their roles of chief executives, Carlyle is giving the new co-CEOs leading and full responsibility of the running of the company, people familiar with the appointments said.

As the FT adds, the promotions were timed to coincide with Carlyle disposing of its poorly performing hedge fund businesses and after a group of company executives, including Mr Conway, were exonerated in a case linked to their decisions during the financial crisis.

Carlyle is set to emphasise that it has cleaned up its act and it is offering a clean sheet to the new co-CEOs, people familiar with the thinking behind the appointments said. The promotions also come at a time when the company has performed well. Over the summer it posted better than expected results and it is reporting quarterly earnings in the next few days.

Carlyle is expected to say in a statement that Mr Lee and Mr Youngkin will have “full responsibility, authority and accountability for the firm’s performance”. Only a few people know internally at Carlyle about the promotions and crucial investors have been notified of the move.

The move is likely to add extra pressure on their listed rivals in the US as investors in private equity raise concerns over who is taking control of these fundraising houses with 12% of funds set to close in less than a decade. In recent years, private equity investors — which typically include pension funds and sovereign wealth funds — have been cutting back on under-performing managers, which only adds to the pressure to set out a clear succession plan.