Carlyle Chief Executive to Step Down

Carlyle CG -1.10%▼ Group Inc. Chief Executive Kewsong Lee is leaving the private-equity firm, as it struggles to expand and its shares lag.

Carlyle said late Sunday after The Wall Street Journal inquired about the matter that Mr. Lee will step down as CEO immediately and will leave the firm when his five-year employment agreement ends at the end of this year. William Conway, a co-founder and former co-CEO of the firm, will serve as interim chief executive until a permanent successor can be found.

Shares of the Washington, D.C., firm have lagged behind its publicly traded peers since its 2012 initial public offering. Carlyle was slow to branch out beyond the volatile private-equity business and into others, such as credit and insurance, that generate the steady, predictable management fees prized by shareholders.

Mr. Lee’s departure marks a rare instance in which a handpicked successor to a private-equity firm’s founders has been shown the door. Firms such as Blackstone Inc. and KKR & Co. worked for years on their succession planning, telegraphing it to fund investors and shareholders long before a formal announcement was made.

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