Ripplewood Holdings, the New York-based private equity firm, has freed its unorthodox founder to do what he does best – scour the planet in search of investment opportunities.
According to Tim Collins, who launched Ripplewood in 1995, the recent hiring of Credit Suisse's Europe chief executive, Leonard Fischer, is a key milestone in an ongoing strategy to “scale up” the firm's operations and infrastructure. Last year, Ripplewood hired former American Express CEO Harvey Golub to become executive chairman of Ripplewood Holdings, the primarily North American private equity firm. Fischer will run the Euronext Brussels-listed RHJ International, a separate investment pool targeting primarily non-US markets, including Europe, Japan and the Middle East.
Collins calls Fischer (or, as he says, “Lenny”) the right man for the job and RHJI the right vehicle for investment beyond American shores. “Anywhere outside the US, there are a lot of opportunities where being a long-term shareholder is a source of competitive advantage,” he says.
Collins says he'd like to see RHJI's stock price triple.
In the New York office, which has endured some turnover among senior investment professionals, Ripplewood is gearing up for a new round of fundraising. Collins says his firm does not need to be the biggest on the Street, but he wants to avoid “scrambling” to pull together capital for big deals like the recent $2.4 billion acquisition of Readers' Digest.
The institutional expertise of Golub and Fischer is allowing Collins the time to do deep reconnaissance into regions avoided by most Western capital, including North Africa and the Middle East. Collins says he now visits the latter region roughly once per month. Ripplewood led an investment in Egyptian bank Commercial International last year. “The area has enormous opportunity, but it's also the most important place in the world to understand the global outlook,” says Collins. “We need to understand the environment there in order to make investments anywhere.”
Collins compares his work in the Middle East to the time he spent in Japan prior to his firm co-acquiring Shinsei Bank. That deal turned out to be among the most profitable private equity investments of all time.
FIRST RESERVE PRESIDENT RESIGNS
Energy investor First Reserve's president, Ben Guill, has resigned after eight-and-a-half years with the Greenwich, Connecticut-based firm. “It's a personal decision for him to spend more time with his family and explore other opportunities,” said Kristin Custar, the firm's director of investor relations. The energy-focused private equity firm has not named a successor. Guill joined First Reserve in 1998, and was responsible for deal origination, investment structuring and monitoring, and management. Prior to joining the firm, he spent 18 years with investment bank Simmons & Company International, where he was a managing director and co-head of investment banking.
DOW EXECS FIRED FOR BUYOUT TALKS
US chemical group Dow Chemical has fired two senior executives for supposedly participating in unauthorized discussions about a potential $50 billion (€37.2 billion) buyout of the company. The Michigan-based group has sacked Romeo Kreinberg, head of Dow's performance plastic operations and a 30-year company veteran, and Pedro Reinhard, a senior advisor and board member who served as the firm's CFO until 2005, reportedly for talking to third parties about a possible buyout deal. Kreinberg and Reinhard “engaged in business activity that was highly inappropriate and a clear violation of Dow's code of business conduct”, the chemical giant said in a statement. Last month, British tabloid The Sunday Express – citing unnamed sources – said a $50 billion (€37.2 billion) bid from a consortium of Middle Eastern investors and US buyout firms including Kohlberg Kravis Roberts was just days away from materialising.
NATURAL GAS SNAGS GOLDMAN PARTNER
Natural Gas Partners, a Texas energy private equity specialist, has hired Scott Gieselman as managing director. Gieselman joins from Goldman Sachs, where he had worked for almost 20 years and had been partner. Among his responsibilities was senior management in the firm's natural resources investment banking division, including regional head or co-head of the division's West Coast and Southwest regions. He has worked on companies in the upstream E&P, oil sands, midstream MLP, chemical, regulated and unregulated utilities and oil field service sectors. In October 2006, the principal investment division of Barclays Capital bought a 40 percent stake in NGP for an undisclosed sum.
LONDON SHOPS GO LARGE IN NEW YORK
Three major UK-based private equity firms all have recently expanded offices in New York. According to New York commercial real estate agency Studley, London-based CVC Capital Partners has just leased a 9,727-square-foot space at 712 Fifth Avenue. The space takes up the entire 43rd floor of the building. In addition, the Studley statement noted that 3i Group and BC Partners, both Londonbased major private equity firms, have recently opened offices at 375 Park Avenue and 667 Madison Avenue, respectively.
PAUL CAPITAL EXPANDS HEALTHCARE TEAM
Paul Capital Partners has hired Lara Sullivan to join its healthcare team as a principal. She will be based out of the firm's New York office and will begin work on April 23. Sullivan has medical and business degrees from the University of Pennsylvania. She comes to Paul Capital from management consulting firm McKinsey and Company, where she was an associate principal on the pharmaceutical and medical products team. The addition of Sullivan to the healthcare team follows the hiring of John Leone as the team's newest partner earlier this month. Leone joined the firm from a position as the president and chief executive officer of life sciences firm Cambrex. Three partners recently decided to leave the group. Todd Davis and Clarke Futch left the firm to launch Cowen Healthcare Royalty Partners, a division of the investment bank Cowen Group. Gregory Brown will join Davis and Futch in October.
BENCHMARK ADDS A NEW PARTNER
The Silicon Valley venture firm, renowned for backing tech startups like eBay and Second Life, has hired former Electronic Arts vice president Mitch Lasky as its eighth partner. The development means Benchmark's existing Silicon Valley team effectively takes a pay cut, as the venture firm's partners are equally compensated. “If you think of it in economic terms, the new partner needs to be accretive not dilutive,” said Benchmark operating partner Steve Spurlock. “You can't bring anyone into the group that you don't think is going to improve” the firm's resources and returns considerably.