When you find yourself regulated in the US, Japan, Egypt and across Europe, it helps to have a former regulator-in-chief on your side.
It wasn't hard to miss the news last month that an entity affiliated with New York's Ripplewood Holdings has hired former SEC chairman William Donaldson as a senior advisor. The announcement came in a cursory set of bullet points released by RHJ International, which also announced that the former Ripplewood Holdings Japan has named as industrial partners Hideki Kurashige, the former president and CEO of Japan Telecom, and Greg Brenneman, the former CEO of Burger King.
Ripplewood's founder, Tim Collins, has never been fond of explaining to the market exactly what he's doing. So we'll hazard a guess. Donaldson brings to Ripplewood an extremely rare set of credentials that will come in handy in charting the future of RHJ International, among the most rarefied private equity entities in the world.
Donaldson is the D in DLJ, nee Donaldson Lufkin & Jenrette, at one time among the largest independent merchant banks in the US. It was acquired by Credit Suisse in 2000. He is also noted for having served as chairman and CEO of the New York Stock Exchange, as Under Secretary of State to Henry Kissinger, and as co-founder of the Yale University School of Management. This guy knows his way around finance, regulators and the world, which pretty much dovetails with Ripplewood's ambitions.
RHJ International is what used to be RHJ Industrial Partners, a $1.2 billion Japan fund managed by Ripplewood. Last year the firm listed the fund on Brussels Euronext, to the consternation of some limited partners. Collins described the move as a coup for corporate governance. Some others saw a tax play. Further adding to its complexity, the publicly listed entity has made a major investment in Egypt's Commercial International Bank. Donaldson's expertise in public markets and global regulatory issues will surely come in handy as Ripplewood navigates several jurisdictions at once.
Some in the private equity industry may find a dose of irony in Donaldson's Ripplewood role. As a major proponent of Sarbanes-Oxley, Donaldson has been accused of helping to drive US capital formation overseas in search of more favorable regulatory regimes. If Ripplewood lists another fund on Euronext, Donaldson may be asked why the NYSE wasn't good enough.
NYC PENSION EXEC HEADS TO YUCAIPA
Horatio Sparkes, the deputy comptroller for pensions reporting to New York City comptroller William Thompson, has submitted his resignation. Sparkes will join The Yucaipa Companies, a private investment firm owned by California billionaire Ronald Burkle, according to a source familiar with the move. Sparkes was in charge of the implementation of investment policies decided by the boards of the New York City pension funds advised by the comptroller. In 2004, the NYC pensions approved a long-term, $4 billion allocation to the private equity asset class. Since then, the comptrollers' office has suffered from turnover, with the departure of deputy comptroller Adam Blumenthal and head of private equity Joshua Wolf-Powers in 2004, and Deborah Gallegos, who was named chief investment officer in 2004, leaving in April 2006 due to professional reasons.
WARBURG PINCUS HIRES FORMER AT&T CHAIRMAN
After serving at top posts at several major telecommunications companies, David Dorman will join New York-based Warburg Pincus as a senior advisor based in the firm's Menlo Park office. The firm said Dorman will be working with the Warburg Pincus Technology, Media & Telecommunications group, as well as consulting across the firm's global network. “By comparison to most private equity firms, I'm attracted [to Warburg Pincus] by the fact that there's a blend of earlystage and more traditional, late-stage buyout activities,” said Dorman in a statement. Prior to his role at AT&T, Dorman was CEO of Concert, a global venture created by AT&T and BT. He began his career in 1981 as a Sprint employee and by 1990 he was president of the company.