Starting in December, Jim Leech will assume the role of president and chief executive officer of the Ontario Teachers' Pension Plan, following the retirement of Claude Lamoureux, who held the position for 17 years. Leech was previously head of the pension plan's private equity and venture capital arm, Teachers' Private Capital, and a director at Cadillac Fairview, the pension's real estate subsidiary.
Leech joined the pension plan in 2001. Prior to this, he had experience in both investment firms and public companies, and also formed several start-up technology companies. From 1979 to 1988 he was president and chief executive of merchant bank Unicorp Canada. After the bank changed its investment focus, however, he took on his first operational role as president and chief executive of one of Unicorp's portfolio companies, gas and pipeline company Union Energy.
In 1992, Union Energy was sold to Westmount Energy, and Leech left the energy business altogether. While he was trying to decide what to do as a next career move, Leech picked up a book about the technology revolution.
“I said to myself I don't know anything about technology, so I guess I'd better go learn,” Leech said.
“I said to myself I don't know anything about technology, so I guess I'd better go learn,” Leech said. a product that people would pay for”. One of the technologies he supported was a radio frequency identification (RFID) product, which was ultimately awarded one of the largest RFID contracts ever by the International Postal Corporation.
Finally, around the start of the new millennium, Leech thought he would take time off from business. He and his wife planned to visit Madagascar and Australia to “bum around a bit”. But it was then that Teachers' approached Leech. The offer was attractive for three reasons, Leech said. The private equity arm of the pension fund was well established at that point, and had been investing since 1991. The pension also wanted to grow the division, which was a challenge that appealed to Leech. Most importantly, Leech appreciated the opportunity to innovate.
“When I came in I was told by Claude that I would have the freedom to implement new plans,” Leech said. “And I would say today that I have had more freedom running Teachers' Private Capital than I ever had as a CEO in the last 20 years.”
Teachers' Private Capital, which recently opened an office in London, has become one of the largest investors of direct private equity capital in the world. It draws down all of its capital from its parent organisation.
After six years of managing Teachers' Private Capital's $16 billion portfolio, Leech will now take on the added challenge of interfacing with the pension plan's 271,000 teachers and retirees. The role will demand skills he has not used since his days as a chief executive.
“My past experience as a CEO prepares me very well,” he said. “I understand the trade-offs that CEOs have to make, and I have a good feeling for all the various functions [of a company] that can sometimes conflict with each other.”
He is not planning any major overhaul of the system when he takes over at the end of the year. The pension plan is already performing “exceptionally well”, he said, in a nod to his predecessor. Because Lamoureux always encouraged innovation and improvement, he says, no major changes are needed at this point.
“One of the legacies Claude has left us with is our constant searching to find a better way to do things,” Leech said. “If problems had been identified, they already would have been implemented. Around here, if you have a good idea on Monday, it's pretty easy to get support and have it implemented by Friday.”
A successor to Leech at Teachers' Private Capital has not yet been identified.
CARLYLE BULKS UP FINANCIAL SERVICES TEAM
US-based private equity firm Carlyle Group has expanded its newly formed financial services team with a string of high-profile appointments, including former chairman of JPMorgan Chase Sandy Warner and former US Treasury official Randal Quarles. Also hired were former US Bancorp chief financial officer, David Moffett; two former vice presidents of Goldman Sachs' financial institutions group, John Redett and Keith Taylor; and Reed Deupree, a former research analyst with Legg Mason Capital Management. Carlyle will attempt to raise a dedicated fund to invest in the sector.
LEHMAN HIRES JEB BUSH AS PE ADVISOR
Lehman Brothers has added another member of the Bush family to its payroll, with the hire of Jeb Bush to advise its private equity business. Jeb is the brother of US President George W. Bush and the former governor of Florida. The move comes as numerous Congressional committees study bills that would raise taxes on private equity firms' carried interest, as well as on publicly traded partnerships like The Blackstone Group and Fortress Investment Group. This is the second Bush relative Lehman has hired; last year the President's second cousin, George Walker, was recruited to lead the bank's asset management division.
BARGER TO START EMERGING MARKETS FIRM
After more than 20 years with the World Bank's lending arm, Teresa Barger is leaving to launch her own emerging markets investment venture later this year. Barger is currently director of governance at the IFC, but has held numerous roles within the organisation including serving as the first division manager for capital department. She also helped set up the IFC's private equity department and developed its first benchmarks for emerging markets private equity. She also oversaw the Emerging Markets Database, which was later sold to Standard & Poor's, and is a founder of the Emerging Markets Private Equity Association.
TPG HIRES EX-DELL CEO
Former Dell president and chief executive officer Kevin Rollins, who left Dell in January, has joined TPG Capital as a partner and senior advisor. Rollins will focus on the global technology sector, identifying investment opportunities as well as helping to manage TPG's technology investment portfolio. He left Dell in January amid slow sales growth and a falling share price. His post was taken over by founder and chairman Michael Dell. Prior to Dell, Rollins was a partner and director at Bain & Company, where he worked with high-technology and consumer products clients.
PAUL CAPITAL GROWS CO-INVESTMENT TEAM
San Francisco-based Paul Capital Investments continued its hiring spate with the recruitment of Dan Townsend for its co-investment team. Townsend was previously vice president of GE Asset Management's International Private Equity Group. While there, he helped to raise a $436 million fund for the group that focused exclusively on co-investments. Townsend is the firm's second hire to the new team, which was launched this April and is led by Dana O'Brien, a co-founder of Cornerstone Equity Investors. Paul Capital Investments has $1.2 billion in assets under management.
COLLER LOSES PARTNER TO PANTHEON
Global fund of funds and secondaries firm Pantheon has appointed Rudy Scarpa as a partner to head up its New York office, which opens in the autumn. Scarpa was previously a partner at Coller Capital in New York, working in the deal sourcing team. Before joining Coller Capital in 2004, Scarpa worked at Thomas H. Lee Putnam Ventures, Merrill Lynch and Skadden Arps. At Pantheon, he will report to Elly Livingstone, head of Pantheon's global secondaries team, who is based in London. Pantheon's areas of expertise are global portfolios, non-auction transactions and venture capital.
WILSHIRE'S LYNCH TO LEAVE AT YEAR'S END
Wilshire Associates senior managing director and board member Tom Lynch will leave the investment advisory firm at the end of the year for “personal reasons”, according to a spokeswoman. Lynch was not available for comment. The firm has not yet begun looking for a replacement for Lynch, who oversaw its Private Markets Group. The spokeswoman said other executives will share his responsibilities after his departure. Before joining Wilshire in 1991, Lynch worked at New York Life Insurance Company, where he made direct private market investments in debt and equities. The Wilshire Private Markets Group currently manages $5.4 billion (€3.9 billion) in discretionary portfolios.