Private equity firm Carlyle Group Inc said on Sunday Chief Executive Kewsong Lee, 56, has stepped down with immediate effect months before the scheduled end of his five-year contract.

Carlyle said in a statement it and Lee mutually agreed his contract which was due to finish at the end of 2022 would not be renewed, without disclosing their reasons. The firm, which reported earnings two weeks ago without flagging potential leadership changes, said Lee had also stepped down as a board member.

Co-founder Bill Conway will serve as interim CEO while the search for a new candidate takes place, the company said.

Lee, who turns 57 this week, could not immediately be reached for comment. His departure comes 18 months after Carlyle announced a strategic plan to accelerate growth and increase shareholder value.

The CEO search will be undertaken "with a sense of urgency", Conway said in a separate memo to global staff on Sunday that was reviewed by Reuters, adding the firm must continue to execute its business plan.

Conway also said in the memo that the firm had set up a CEO office consisting of key senior leaders, with whom he would work closely.

The senior leaders include Carlyle's Chief Operating Officer Chris Finn, who has delayed his previously announced end-2022 retirement to help with the transition.

A spokeswoman for Carlyle declined to comment on the memo. Conway declined to comment further beyond the announcement.

Lee's departure comes as private equity firms face a challenging macroeconomic and investment environment fraught with geopolitical risks and sharply rising interest rates.

The firm performed better than its peers in the latest earnings. Its corporate private-equity funds were flat during the second quarter, while real estate and credit funds gained 4% and 2% respectively.

By contrast, Blackstone Inc and KKR & Co reported a 6.7% and 7% depreciation in their private-equity portfolio respectively.

Carlyle's share price growth has, however, lagged in the last five years. Blackstone's shares have shot up more than three times since August 2017 while Carlyle's has grown about 80%.

Carlyle has said it is raising an eighth U.S. buyout fund and a fifth Europe technology fund. The firm is also exploring a new $8.5 billion Asia-focused buyout fund that is aiming for its first close in the next couple months, said a person with knowledge of the fundraising.

Carlyle also plans to kick off fundraising for a new pan-Europe buyout fund in the coming months, said a second person with knowledge of the situation.

Carlyle declined to comment on fundraising plans. It said in the second-quarter earnings report it had raised $19 billion in total this year.

Lee joined Carlyle in 2013 as deputy chief investment officer for corporate private equity and was made co-CEO of the firm in 2017, before assuming the title solely in 2020.

Prior to that, he had a 21-year career with rival firm Warburg Pincus.

His profile page is no longer accessible available on Carlyle's website.

Carlyle has 26 offices across five continents, managing private equity and private credit funds and private equity asset manager AlpInvest.

As of June 30, 2022, the firm had $376 billion in total assets under management, of which $260 billion was fee-earning, while available capital for future investment was $81 billion, according to its Sunday statement.

(Reporting by Jyoti Narayan in Bengaluru, Kane Wu in Hong Kong and Anirban Sen in New York; Additional reporting by Chibuike Ogui in New York; Editing by Sherry Jacob-Phillips, Kenneth Maxwell and Edwina Gibbs)