First Round: Coup de grace

Some would argue that private equity doesn’t always get the respect it (sometimes) deserves. So the news that PAI Partners’ chairman and chief executive Lionel Zinsou is stepping down to become Benin’s prime minister certainly left First Round suitably impressed.

Zinsou is not the first senior private equity figure to take on the mantle of political power. Bain Capital’s Mitt Romney is perhaps the most high-profile example. There are others too, though, such as Ukraine’s finance minister Natalie Jaresko. She held several key positions in the private business sector including co-founding Horizon Capital in 2006. As First Round and everyone else surely knows (right?), she is credited with establishing and strengthening economic ties with Ukraine and Moldova, in between the small matter of dealing with a certain Mr Putin.

Zinsou’s financial credentials are also suitably impressive. He was formerly a managing partner at French bank Rothschild & Cie, and has presided over impressive performance since taking the helm at PAI in 2009. This stint came about after a management reassembly that saw chairman and chief executive Dominique Megret and senior partner Bertrand Meunier walking out the door.

Zinsou navigated PAI through choppy waters. That pair of departures triggered a key-man clause, which led to PAI’s fifth buyout fund being slashed by LPs from €5.4 billion to €2.7 billion. Five years on, though, the group had firmly bounced back. It closed its sixth buyout fund on €3.3 billion, smashing its €3 billion initial target. Certainly a feather in Zinsou’s, ahem, hard cap then.

Even so, perhaps Benin’s president, Thomas Boni Yayi, should be watching his new prime minister closely. Far be it from First Round to cast any aspersions on Zinsou and his notably successful career. It’s just that, well, some investors regarded his months of lobbying against his former PAI bosses, which ultimately led to their departures, as something akin to a ‘coup’ at the time.

Boni Yayi’s ruling alliance lost seats in an April parliamentary election, weakening his grip on power. Opposition figures claimed he was attempting to change the law to allow him to stand for a currently unconstitutional third term of office. Surely, Zinsou couldn’t soon find himself in the middle of an even more political coup, could he? First Round awaits developments, with interest.