In a recent Reuters Newsmaker interview, Lee discussed his management philosophy, the future of private equity, and why he thinks incorporating ESG principles into CG’s culture is a winning long-term growth strategy. Indeed, CG’s own stock is up 96% over the past 12 months, an indication that many investors support Lee’s efforts to push CG’s portfolio toward sustainable, long-term growth.

“We’re building businesses, and I like to focus on things we can control,” Lee says. “Those are the value-creation levers to drive the top line, to make real structural improvements at companies, and to make these companies better so that they perform— and if they perform, the investment returns will be there.”

Driving performance is of course Carlyle’s main goal, but it matters to Lee how growth is achieved and what values are reflected in the company’s investment and management decisions.

For example, Lee says CG has been investing heavily in its digital infrastructure in order to improve its e-commerce capabilities and use machine learning to shorten customer response times and lower costs. The firm is also “restructuring and making fundamental changes to supply chains, and making companies more ESG-friendly,” Lee explains.

Long-term decision-making

Beyond interest rates and cost of capital — the traditional metrics of private equity — Lee says CG’s larger project is to work in partnership with the management of companies in which it invests to create a solid foundation for long-term growth. For example, CG recently partnered with fellow private equity giants Blackstone and Hellman & Friedman to buy a majority stake in Medline Industries, one of the world’s largest medical supply manufacturers and distributors. The deal is expected to close in late-2021, but Medline’s management will not change. Indeed, the company will still be run by the Mills family, which plans to work with CG and its other partners to expand the company’s product offerings, accelerate international expansion, and strengthen its global supply chain.

“Medline is a great company, with solid cash flows and real growth prospects, and we’re very aligned with the family and management there in terms of what needs to happen,” says Lee. However, Medline is not a standard private-equity deal, Lee insists—rather, it is an example of a new kind of deal-making that prioritizes the power of healthy partnerships and strategic long-term decision-making.

“People have to understand that the way private equity has evolved, it’s a very different type of industry right now,” Lee explains. “Here at Carlyle, we are a modern-day version of private equity. We’re more global, we have more diverse thinking, and we have many more value-creation levers. It’s not just about debt, financial leverage, and purchase price — it’s about how you work with companies to drive value and make them better.”

The ESG imperative

One way CG is trying to build “better” companies is by integrating sustainable ESG principles of corporate governance into the everyday fabric and culture of the companies it supports. “Everybody is talking about ESG these days, but for us it’s not a topic or a product or a metric — it’s a mindset,” he says. “ESG has to be cultural if you want to do it the right way.”

To do that, he explains, you need to embed a view from the very beginning that if you push ESG initiatives, you are helping your companies get better. For example, CG gave itself the goal of ensuring that 30% of its board were people from diverse backgrounds. In fact, 60% of its board hires in the past six months have been people from diverse backgrounds. Once established at the top, says Lee, ESG principles can be more easily integrated into day-to-day operations.

“ESG is also about hard work at each company, at a granular level, to drive operational changes that are ESG-friendly, climate-friendly, and sustainable,” Lee explains. “For instance, it’s repurposing supply chains to ensure sustainability; it’s reformulating products so that we’re more eco-friendly; it’s figuring out how to align company performance with ESG-friendly [tactics] like using less water or reducing greenhouse emissions.”

Finally, successful ESG-friendly governance also requires that incentive structures and compensation be tied to ESG targets — something Lee says CG has been doing for several years. In the larger corporate picture, Lee says that companies and their stakeholders need to be encouraged to invest in renewable energy and develop sustainable ecosystems around alternative energy sources. “We have to invest in traditional companies to provide the capital for them to transition to carbon neutrality,” Lee says.

Optimism abounds

As for future prospects for private-equity investing, Lee sees opportunity just about everywhere, particularly in places where traditional industries and technology intersect.

“You can’t ignore all the trends that are happening in tech and healthcare, but you also have to look at the convergence of industries, and how tech is cross-cutting across everything,” Lee says. “So, it’s healthcare and technology; it’s technology and financial services. I call it the five Cs — e-commerce, cloud, collaboration, cyber, and cashless. Those are the trends we are seeing across industries that are quite interesting.”

Different regions, too, are offering investors attractive opportunities as well, notes Lee, particularly in China, India, and Japan. Further, private equity is a much more attractive asset class now than it was in the past, he says, because “folks are starting to understand that as an alternative to liquid fixed income, there is an illiquidity premium that offers better rates of return with slightly longer duration.”

Ever the optimist, Lee says he is not overly concerned by various tremors and rumblings of the current market, including the crisis enveloping China’s biggest property developer, Evergrande, and efforts by U.S. Democrats to raise corporate tax rates.

“When things like taxes and regulatory policies change, people talk about the negative implications,” says Lee. “But keep in mind that it also creates change, it creates companies that get divested, and behaviors change. It’s just as much of a way to create opportunity as anything else.”

Upon landing in New York, Sanchez said in a Reuters Newsmaker interview that he planned to visit business leaders in Los Angeles, San Francisco, and Silicon Valley in hopes of convincing them to invest in Spain’s post-pandemic economic recovery.

Sanchez said he wants to raise $500 billion in private investments, which would be used to “transform and modernize” Spain’s technological infrastructure and hasten the country’s adoption of green policy initiatives — from renewable energy, electric cars, and charging stations to energy-efficient buildings, emission-friendly agriculture, and country-wide expansion of 5G.

“Spain is establishing a roadmap for recovery,” Sanchez told Reuters Newsmaker. “Vaccination means economic rebound, but we have to understand that we cannot do the same thing as we did before the pandemic. We need to modernize our economy, and that is why I am here to talk to investors.” Meetings with Blackrock, Netflix, and Zoom are planned, he acknowledged, as is a tour of Apple’s headquarters in Cupertino, Calif.

A progressive political vision

A secondary purpose of Sanchez’s visit is to persuade American business leaders — and perhaps other world leaders — that his progressive socialist government has the political vision and will to meet this pivotal moment in world history. In addition to the U.S. investment dollars he hopes to attract, Sanchez noted that the European Union will funnel $162 billion to Spain over the next six years, 48% of which will be devoted to Spain’s ecological transition; 28% to digitization and technology; 10% to innovation; and roughly 7% to educational reform and vocational training.

This degree of spending in so many critical sectors of Spanish society will no doubt be presented to U.S. investors as an historic opportunity. “We are entering in Spain a period of intense reform, the pace of which we haven’t seen since the beginning of our democracy [in the 1970s],” Sanchez proudly proclaimed. Though Spain was hit early and hard by the pandemic, resulting in a 10.8% drop in GDP last year, Sanchez said the Spanish economy grew 2.5% last quarter and is projected to grow at a rate of 6% to 7% for the next couple of years.

In addition to a detailed framework for reform, Spain also has more economic momentum than most other countries, Sanchez added, because “we don’t have a vaccination rejection movement in Spain” — an obvious dig at some U.S. citizens who refuse to get vaccinated. Spain’s high degree of civic cooperation means 70% of the Spanish population will be vaccinated by the end of August, Sanchez said, adding that the country will begin vaccinating its youth very soon as well.

Opportunities in Spain

In his pitch to investors, Sanchez must walk a fine line between presenting Spain as a country that is simultaneously at the forefront of post-pandemic economic recovery and in urgent need of investment in technology, infrastructure, and education. For investors, the “opportunity” here is to help Spain accelerate its digital transformation and seed business opportunities that could be expanded to other parts of the world. “The U.S. understands the potential role we could play in Latin America,” Sanchez said, “not only in Cuba but in Venezuela, Argentina, and Mexico.”

And while the purpose of his trip is to woo U.S. investors, Sanchez is also taking this opportunity to speak to the rest of the developed world about the importance of aggressively addressing climate change, an issue on which he has staked his entire political future. “The fact is, climate change is with us, so we have to adapt and mitigate climate change’s effects,” Sanchez explained.

After rattling off a familiar list of green initiatives that progressives have been pushing for years, Sanchez also acknowledged that not everyone in the world is sold on such a rapid transformation of society, even though he clearly thinks they should be. “It’s key that this transition has an inclusive perspective, not an elitist perspective,” Sanchez said, adding that “it’s important not to fear this transition, but to see that digitalization could create a very positive means to guarantee major prosperity for all.”

A noble sentiment, to be sure, but one that runs headlong into such controversial ideas as the that the European Union plans to implement by 2026. Sanchez supports the border tax, saying “it’s a matter of having a level playing field” for commerce with countries that aren’t quite so concerned about their carbon emissions. But Sanchez also recognizes that a carbon tax could raise prices for gas and other commodities in the European Union, and said European leaders should consider subsidizing low-income people to prevent the carbon tax from exacerbating inequality.

The pitch for carbon-neutral socialism

In the U.S., Sanchez’s basic sales pitch to investors is “if you scratch our back now, we’ll scratch yours — later.” It remains to be seen how successful that pitch will be, but Sanchez is a charismatic leader who knows how to sell Spain’s version of carbon-neutral socialism to progressive-minded capitalists.

“We have the framework and public funds and political will” to help lead Europe and the rest of the world into the post-pandemic future, Sanchez insisted. He also intimated that his country’s early pandemic struggles have made it better prepared than other countries to take on a leadership role in the post-pandemic world. “Spain showed during the pandemic a strong resilience, a strong capability to adapt ourselves to this new age that we are entering after the pandemic.”

Of course, those capabilities will be a lot stronger if Sanchez can persuade investors to give him $500 billion.

California, here he comes.

Now 27, Agarwal is a hardened veteran of the internet start-up sprint, having presided over a heady expansion that took OYO from one hotel in 2013 to more than 100,000 properties in 800 cities around the world, primarily in India, Southeast Asia, Europe, and China.

In 2019, with financial backing from SoftBank, OYO had already become the third-largest hotel chain in the world. Heading into 2020, OYO boasted a market valuation of more than $10 billion and an IPO seemed imminent.

Then the pandemic hit.

Room rentals cratered. Franchisees that had been guaranteed extra income began complaining and eventually filed a lawsuit. Thousands of employees were laid off around the world. Franchisees fled, the company’s business ethics were called into question, and global revenue dropped by almost 60%.

The rebound

But that’s all in the past
 or most of it, Agarwal says. In a recent Reuters Newsmaker interview, Agarwal was optimistic about the future of OYO Rooms, claiming that bookings in India and OYO’s other major markets were rebounding so fast that they would be back to pre-pandemic levels in a matter of weeks. “Leisure travel is coming back in India,” Agarwal told Reuters associate editor Una Galani. “A week ago, our hotels in Delhi and Mumbai were completely sold out, and it’s hard to find a restaurant reservation. All this has happened in the past month.”

Further, OYO is prepared for the summer travel surge, Agarwal insists, because the company has spent much of the pandemic improving its software, working with its property partners, and investing in the resources necessary to maintain its tidy room standards. “We used the pandemic to get ready for rapid growth as the market comes back,” Argawal says, adding that OYO’s recovery is very much tied to vaccination rates in the countries in which it operates. “What we are seeing now is that in any country with a 40% jab [vaccination] rate, our numbers have grown.”

The high-growth journey

OYO’s business model is to offer operators of budget hotels an amenities makeover and access to the company’s network in exchange for OYO’s control over booking and a presumed boost in occupancy and revenue. Customers book through OYO’s app, and the company charges a commission on each booking.

Until the pandemic hit, OYO’s focus was on expansion — but now, says Argawal, the company is “doubling down” in its major markets and focusing on improving both its partner relations and overall customer experience. Expanding in China and the U.S. is not a priority at the moment, Argawal adds, although earlier in the year the company did open 10 hotels in six U.S. states.

Argawal admits that OYO has had its rocky moments, but says the company’s swift evolution has been similar to other internet unicorns such as Uber and AirBnB, which owns a stake in OYO. “If you look at the journey of any high-growth company, you will never see a straight curve,” Argawal explains. “In the first few years, you see a couple of years of rapid growth, then a year to a year and a half of balancing.”

OYO grew from 2013-‘16 but was relatively “flat” as it consolidated in 2016-’17, Argawal says. From that point until the pandemic hit, the company was focusing on expansion because in the midst of an entrepreneurial push, he says, “you see a market fit and you feel like you have to keep going.”

But Argawal has no regrets about OYO’s meteoric growth. “Upon reflection, our growth could maybe have been more balanced or spread out,” he admits. “But you never know until you’ve done it. The trick is being able to learn from it, acknowledge it, and rapidly improve. And that’s what we’ve been doing.”

Whither an IPO?

As OYO emerges from the pandemic, all that growth and restructuring has of course fueled plenty of speculation about when the company might yet go public. In investment circles, however, OYO has been compared both favorably and unfavorably to WeWork, the failed workspace-sharing startup whose charismatic founder, Adam Neumann, was ousted in 2019 following the company’s infamous IPO flameout. Some investors are concerned that OYO is burning through more cash than it is letting on, but Argawal says the company still has about $800 million in reserve, and is being managed with a future IPO in mind.

“We will consider [going public] at some point in time,” Argawal says. “We have invested in an independent board, and we currently operate as if we were a publicly managed company so that we are prepared when we go public. But the timeline is up to the board.”

The dynamics of an OYO IPO will be interesting. Argawal himself was accused of pumping up OYO’s valuation when, in 2019, he raised $2 billion and engineered an unprecedented share buy-back program that netted him 15% of the company. But in the Reuters interview, Argawal dismisses the idea that he had done anything other than invest in himself and his company. “I wanted to increase my ownership,” he says, because “I have a long-term belief in our mission.”

That investment may pay off handsomely if and when OYO goes public. In the meantime, Agarwal expects the post-pandemic travel surge to fill OYO’s rooms and put the company back on a path to profitability. Business travel is picking up, he observes, and several consumer travel trends — such as staycations, domestic travel, and holiday home rentals — are converging to create plenty of new market opportunities for OYO.

“India as a market is highly resilient, and can bounce back quite quickly,” Argawal notes.

It remains to be seen whether the rest of the world can do the same.

As chairman of , a holding company that owns media and internet brands around the world, Diller incubates successful online businesses in one of the city’s most interesting buildings, a curvy waveform of concrete designed by architect Frank Gehry. He runs one of the world’s most popular travel sites, Expedia.com. He produces Broadway shows by the handful. And when the city itself hands him a project — as it did with Hudson River Park’s Little Island — he does it the only way he knows how: His way.

“We are in the endless business of ‘What’s next?’,” Diller explained during a recent Reuters Newsmaker event. And quite often, what’s next for the rest of us is whatever project Diller has been working on for the past few years.

Building Little Island

On May 21, New Yorkers finally got a chance to stroll around Diller’s latest creation, Little Island, a new 2.4-acre, $260 million park suspended above the Hudson River on an elaborate bed of what look like concrete champagne glasses. Or tulips. Or something for which the word “whimsical” might have been created. The one thing Little Island doesn’t look like is a pier, which is what it ostensibly replaced.

Ten years ago, when the city asked him to consider rebuilding Pier 55 in Hudson Park, Diller says he agreed on one condition — that he be allowed to build something “imaginative and ambitious.”

“I thought there was really nothing in New York on the water that had the ambition to become iconic,” explains Diller. Building Little Island involved 10 years of pain and several lawsuits (this is New York, after all); but that’s all in the past, he adds, because the island is finally doing what it was meant to do: Make people happy. “Crossing that bridge really is a going from the stimulus of the city to a pastoral place for wandering around, lying around, and being entertained.”

In addition to gorgeous views of the city and plenty of trees to sit under, the plan now is to start filling the island’s three performance spaces — including a 687-seat waterfront amphitheater known simply as “The Amph” — with local acts of all kinds, including music, dance, theater, comedy, ballet, and spoken word, he says.

New York is back
 almost

For Diller, opening Little Island is also hopeful sign that the rest of the city is ready to rebound from the pandemic. He also chided those who fled the city for places like Florida or Wyoming as people “who don’t really have connections to the city, and didn’t participate in city life the way people who care about New York do.”

Assuming no new wave of infections, Diller predicts the city will be fully back by summer. “And by fall, when Broadway comes back and international tourism comes back,” New York will prosper again, he says, and Times Square will no longer be a place “where you could shoot a cannon through it and not hit anyone,” as it was six months ago.

Fortunately for Diller, he owns, runs, or has a stake in plenty of businesses that will also prosper again if and when New York reasserts itself. People using match.com and Tinder, both IAC spinoffs, will finally have places to go on dates. People using Expedia and tripsavvy.com will have destinations to visit. Brides who rely on brides.com will have weddings to plan. Visitors to byrdie.com, a beauty and lifestyle site, will have social gatherings and events for which to primp.

IAC’s business model is to acquire promising online businesses, give them a corporate makeover, and spin the companies off when they are big enough to “scale” on their own. That’s how Angie’s List became “Angi,” and why popular websites such as The Daily Beast, LendingTree, and Vimeo look so much different now than they did a few years ago.

Given IAC’s success at incubating internet stars, many up and coming internet companies might be wondering how they might get IAC’s attention.

“We are in the endless business of ‘What’s next?”

The key, Diller says, is to “have a good idea” — but exactly what constitutes a good idea for IAC is anybody’s guess. “For us, unless we forage for good ideas, we have no future,” Diller adds, explaining how he knows a good idea when he sees one. “It’s not sector led. It’s not by anything other than what, instinctively, sounds like a good idea — you can’t get anywhere with us unless you pass that first test.”

Why MGM then?

The most recent company to pass the IAC smell test is MGM, in which IAC purchased a 12% stake last year for about $1 billion. But astute observers of IAC’s business model may wonder why IAC would even look at MGM, since it is not strictly an internet company.

The answer: online gaming.

“When we looked at online gaming, we kept looking at MGM, because MGM on many counts was, for us, continually impressive,” Diller says. “It was vastly undervalued because of the pandemic,” he adds, citing its superior management, Las Vegas footprint, and prospects for online gaming growth as reasons to invest. IAC was flush with cash after spinning off Match Group and Vimeo; and “after our analysis, we said ‘we’re going to surprise ourselves here,’ and take direct interest,” he notes.

Diller also had plenty to say about the need to regulate the growing monopoly power of such tech giants as Google, Facebook, and Apple, and doubted that the recent rash of media consolidations (e.g., CBS/Viacom, Amazon/MGM Studios, Warner Bros./Discovery) would yield the results those companies are looking for, and would almost certainly leave a lot of “blood on the floor.”

“Yes, scale has value, but I don’t believe scale is the answer, particularly,” Diller says. “If I had [ViacomCBS] — and there are some good assets there — I believe that if you manage those assets, which are producing content, and you do it well, you will have a good return. You do not need to buy anything or sell anything, necessarily.” When Diller was asked if he was glad that he didn’t win his bid for CBS back in the 1980s, he laughed and replied, “Yes.”

“As doctors and governments administer vaccines and reduce the severity of COVID-19 symptoms, people will want to travel again,” Sun said in a Reuters Newsmaker interview earlier this week. “If we get to the point where COVID-19 is treated like the flu — as something that’s not life-threatening — global travel will resume, and the industry will recover. The buying power is there, and people’s desire to travel is there, too.”

Sun noted that hotel reservations during China’s Labor Day weekend at the beginning of May doubled from last year, airline ticket sales were up 28%, and car rentals were up more than 300%. Granted, most of this was domestic travel, since travel outside of China is still largely forbidden — but Sun also said that more than a year of restrictions have made Chinese citizens eager to travel internationally again.

“The pent-up demand is huge,” she said. “Lots of families want to travel across the border.”

Furthermore, if domestic trends are any indication, travelers flush with cash are also showing a greater interest in luxury accommodations and activities, such as ski trips, surfing vacations, meditation retreats, and safaris. Unique, customized experiences are in high demand, Sun noted, whereas demand for large group tours has declined.

Post-pandemic travel trends

Under normal conditions, the Chinese are among the world’s most enthusiastic travelers. According to the China Tourism Academy, Chinese travelers logged 149 million trips abroad in 2018 and spent $130 billion overseas. Currently, flights out of China to places considered “safe,” such as Singapore, are regularly full now, Sun pointed out, and the desire to travel to places like the United Kingdom, Europe, and Africa is growing.

As people start traveling again, however, Sun explained that she has seen three major trends emerge from the pandemic: i) people traveling on airlines and staying in hotels want to feel safe, so mask-wearing and other safety protocols need to be observed; ii) rather than travel in large groups, Chinese travelers are choosing to travel in small groups of four to six people and hiring a driver or tour guide to show them around; and iii) people who do travel want “flexible and personalized” options, as well as the ability to cancel tickets without being charged.

The travel industry “needs to put customers first,” Sun said, adding that when the coronavirus hit China last year, “we offered refunds without asking questions, which enabled our customers to have peace of mind, and that is very important.”

The prospects for resumption of business travel are a bit murkier, Sun admitted, but she is optimistic that once leisure travel recovers, business travel will follow — even though businesses around the world have discovered the cost efficiencies of remote work.

“I think there are a couple of aspects of business travel that are difficult to replace,” she said. “Going to a conference where you meet 200 people — that’s hard to replicate with Zoom.”

In the meantime, countries that need to attract tourism in order to revive their economies should be focusing on containment of the coronavirus, she said. “Countries that demonstrate the ability to control COVID-19 will attract more customers,” she advised, adding that “the focus of governments should be to protect people first. If the risk can be reduced, borders can open.”

Poised for a travel boom

Inside China, demand for travel services is quickly returning to pre-pandemic levels and in some cases exceeding it, Sun observed, so trip.com is currently focusing its resources on the domestic market. When borders open up, however, Chinese citizens are primed and ready to travel internationally, she added.

As a company, trip.com is positioning itself to take maximum advantage of this expected resurgence in travel. Even though its revenue plunged by almost half in 2020, trip.com has invested more than $4 billion in research & development over the past few years to enhance its mobile user experience and develop more capable forms of machine learning and artificial intelligence. The company has also recently acquired several smaller travel sites, such as Skyscanner and the India travel site Makemytrip.com. And on April 19, the company launched a secondary listing on the Hong Kong Stock Exchange in a bid to raise more than $1.4 billion.

“Being listed in Hong Kong gives us a couple of advantages,” Sun said. “Our brand name is very well known in Asia, so it gives us access to more potential customers,” as well as “the opportunity to collaborate” with partners in Asia’s airline, hotel, and tourism industries. Attracting more Asian investors is also part of the company’s strategy, Sun said, since the company’s investors have historically been concentrated in the U.S. and Europe.

And what, you ask, is at the top of Sun’s own bucket list of upcoming travel adventures? An African safari.