Militant private equity

Bill Owen, the latest military-political figure to leave Washington for the world of alternative assets, is joining AEA Holdings to head up the firm’s growing Asia platform. By Aaron Lovell.

Much has been made of the crossover between the worlds of private equity and hedge funds, what with increasing numbers of private equity firms launching hedge funds and hedge funds exploring private equity strategies.

At the same time, over the past year, much has been made of the nexus between the private investment world and politics—just look at politicians like former US secretary of state Colin Powell, who joined VC shop Kleiner Perkins Caufield & Byers as a strategic limited partner last July, or former vice presidential candidate and North Carolina senator John Edwards, who agreed to serve as a part-time senior advisor to distressed investor Fortress Investment Group last fall.

Owen: new AEA investor

Now a former vice chairman of the US Joint Chiefs of Staff is joining up with a hedge fund and private equity shop as it continues to expand throughout Asia. Bill Owens is joining AEA Holdings as chairman and chief executive officer for China, India and Southeast Asia.
AEA Holdings was formed in 2005 out of the merger between Aetos Capital, a New York-based firm pursuing opportunistic real estate and fund of hedge funds strategies, and AEA Investors, a private equity firm established in 1968. Aetos was founded by former Morgan Stanley Investment Management head James Allwin. AEA was founded in 1968 by the Rockefeller, Mellon and Harriman families, alongside SG Warburg.

Owens will oversee investments in the region from an office in Hong Kong, which the firm hopes to establish later this year.

Until late last year, Owens was the chief executive officer at Nortel Networks, a Canadian telecommunications equipment vendor that has been suffering from a number of highly publicized accounting irregularities.

Beginning in 1994, Owens served as the vice chairman of the Joint Chiefs of Staff for two years as the military reorganised itself after the end of the Cold War. He was also the commander of the US Navy’s Sixth Fleet and a senior military assistant to two US Secretaries of Defence, Frank Carlucci and Dick Cheney.

In addition to Nortel, Owens served on the boards or held executive positions with companies like Daimler Chrysler, Polycom, Embarq, Teledesic and Science Applications International Corporation. He is also on the board of the Carnegie Corporation and the Brookings Institution.

Owens studied mathematics at the US Naval Academy in Annapolis, Maryland. He also received a bachelor’s and master’s degree in politics, philosophy and economics from Oxford University, as well as a master’s degree in management from George Washington University in Washington, DC. 

The Owens appointment is the latest example of the jump from the high-profile world of US politics to private investing—see only George H.W. Bush (formerly of The Carlyle Group), former treasury secretary Paul O’Neill (The Blackstone Group), and former vice president and junior senator from Indiana Dan Quayle (Cerberus Capital Management). Former Los Angeles mayor Richard Riordan has also made waves at buyout shop Riordan Lewis & Haden.

In addition to Powell, other military personnel have been making the switch: last year, former acting secretary of the Army Les Brown joined Bethesda-based American Capital to work with the firm on federal-contracting projects.

As the alternative asset class grows, certainly the nexus between politics and private equity will no doubt become an increasingly busy place.