E191: Randal Quarles: From Fed Vice Chair to Private Equity Trailblazer

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Jul 25, 2025

Randal Quarles, Chairman and Co-Founder of The Cynosure Group and former Vice Chair for Supervision at the U.S. Federal Reserve, shares his unique insights into private equity. He discusses the misalignments between traditional private equity and family office needs, emphasizing tailored strategies. Randal highlights the benefits of long-hold investing and his preference for growth equity in overlooked sectors. He also reflects on lessons learned during the Great Financial Crisis and the philosophy behind building a sustainable investment firm.

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INSIGHT

Supply-Demand & Structural Limits

Supply and demand dynamics strongly influence asset class returns and competition.
Structural challenges like longer hold periods and compensation complexity limit competition in long-duration private investing.

ADVICE

Recruiting Talent Builds Success

Focus on recruiting and retaining top investment professionals to execute strategies effectively.
Building a firm with equity value enables attracting talent and growing beyond a single family office.

ANECDOTE

Rubenstein's Persistent Recruitment

David Rubenstein personally persisted to recruit Randy despite his initial reluctance during Treasury tenure.
Rubenstein’s strategic vision for a financial services fund aligned with Randy’s expertise, leading to their collaboration at Carlyle.

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Randal Quarles has been at the helm of some of the most influential institutions in finance and government. From his tenure as Vice Chair of the Federal Reserve and Under Secretary of the Treasury, to his leadership role at The Carlyle Group, Randal brings a rare blend of private market acumen and public sector insight. Today, he's the Chairman and Co-Founder of The Cynosure Group—an investment firm anchored by the Eccles family and built to solve the very structural misalignments that plague private equity for families and foundations. In this conversation, we explore the evolution of private equity, the mismatch between GP incentives and family office needs, the importance of long-duration compounding, and how Cynosure is creating a modern investment firm inspired by the early days of Lazard and Rothschild.

Highlights:

Why traditional private equity isn’t always aligned with family offices—and how Cynosure is solving that
The challenges of long-hold investing and how cash-flowing businesses unlock structural advantages
How Cynosure is organized: six subsidiaries across PE, credit, OCIO, ultra-high-net-worth advisory, hedge funds, and sports investing
Why Randal prefers growth equity in “unloved” sectors like HVAC and sanitation—rather than chasing tech
Lessons from working with David Rubenstein at Carlyle and deploying capital through the Great Financial Crisis
The philosophy behind building an enduring investment firm—and the one piece of advice he’d give his younger self

-- Guest Bio: Randal Quarles is the Chairman and Co-Founder of The Cynosure Group, a Salt Lake City–based investment firm anchored by the Eccles family. He brings over 40 years of experience across financial services, public service, and private equity. Prior to founding Cynosure, he served as Vice Chair for Supervision at the U.S. Federal Reserve, U.S. Executive Director at the IMF, and Under Secretary of the Treasury. In the private sector, he was a longtime partner at The Carlyle Group, where he led its financial services fund.

Randal’s specialties include financial services investing and financial services policy. At Cynosure, he’s built a modern investment firm modeled after the early days of Lazard and Rothschild—designed to meet the structural and tax challenges faced by families, endowments, and long-term investors.

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LinkedIn: David Weisburd: https://www.linkedin.com/in/dweisburd/ Randal Quarles: https://www.linkedin.com/in/randal-quarles-4b09788/

Links The Cynosure Group: https://cynosuregroup.com/

-- Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com.

(0:00) Episode preview (0:06) Private equity funds vs family offices and tax implications (2:10) Evergreen structures, pension funds, and Cynosure Group overview (7:12) Transition to private investments and recruiting challenges (11:07) Cynosure's business structure and growth equity strategies (19:53) Asset class supply and demand dynamics (24:43) Asset allocation framework and sports investing strategies (26:16) Philosophical approaches to team building and recruitment (28:25) Initial impressions of Carlyle's leadership (32:48) Carlyle's Model T approach in private equity (36:02) Deploying a financial services fund during the Great Recession (38:13) Transitioning from law to investing and government influence (41:37) Career advice and investment principles (49:38) Encouraging career flexibility and understanding risk (51:00) Lessons on self-belief and meeting aspirational peers (51:38) The Eccles family's impact on Utah Jazz (52:46) Closing remarks