Return of the Mack(2)

In announcing the resignation of chief executive Peter Linthwaite today, UK trade body the BVCA revealed that former head John Mackie will return in a temporary capacity while it seeks a permanent replacement. James Taylor reports on his surprising return to the front line.

Today’s resignation of BVCA chief executive Peter Linthwaite, forced to carry the can by his superiors for the trade body’s heavily-criticised performance at Tuesday’s meeting of the Treasury Select Committee, has thrown up at least one interesting corollary – the return of previous incumbent John Mackie, albeit in a temporary capacity.

Mackie

Mackie held the BVCA chief executive job between 2000 and 2005, before handing over the reins to Linthwaite. He said at the time of his resignation: “It is time to bring in somebody new to take the BVCA to its next phase of development.”

Ironically, he returns at a time when the BVCA is again looking to change the way it operates. Yesterday chairman Wol Kolade told PEO: “The BVCA cannot continue in its current form.  We need to look at where we are going and anticipate the challenges ahead. We need to be better equipped.” He proceeded to give a thinly-veiled warning of Linthwaite’s imminent demise: “We need to set the agenda, not react to it and build something interesting to deliver it. Maybe with a different chief executive, because the association is heading into different waters than when Peter joined. We cannot be precious.”

Mackie’s role will be a temporary one, lasting only until the BVCA is able to recruit a new chief executive – although this may be easier said than done, as arguments continue over whether the BVCA can continue to represent the various distinct communities that make up the UK private equity industry. The precedents suggest otherwise – in the US, the large buyout firms have already branched out to form their own trade body, the Private Equity Council, while pan-European trade body EVCA announced today that it plans to introduce separate lobbying teams to represent venture, mid-market buyout firms and the mega-funds.

In the interim, Mackie will be seen as a safe pair of hands. He is well respected across the industry for the work done by the BVCA during his previous tenure – albeit at a time when the political scrutiny of the industry was far less intense than it is today. Earlier this month, one senior private equity executive told PEO that he wished Mackie was still in charge at the BVCA, on the grounds that he would have put the issues across more forcefully than his successor.

However, it remains to be seen whether he is the right man to lead the industry into an era of greater transparency and disclosure. In 2004 he told the Financial Times: “The relationship between investor and private equity firm is just about the most transparent commercial arrangement I have ever seen in my working life…. I have never fully understood who would benefit from [third-party] disclosure – other than the media.” Time will tell whether Sir David Walker, chairman of the BVCA’s working party, comes to the same conclusion.

Mackie certainly has a good pedigree in the industry. After qualifying as an accountant with Arthur Anderson, he joined 3i in 1985, before moving to Morgan Grenfell – now part of Deutsche Bank – to establish its private equity operation. He remained there for eight years before retiring on health grounds, and spent two years recuperating before taking the BVCA job in 2000.

Since leaving the BVCA in 2005 he has remained active in the industry – he is an executive director of Parallel Private Equity, a UK-based co-investment vehicle formerly part of the AXA Group, and a non-executive director of Kleinwort Capital, the listed trust managed by August Equity.

Mackie’s return comes at a critical time for an industry, which is facing a hitherto unseen level of opposition from politicians, unions and the media. The BVCA will be hoping he can plot a safe course through the choppy waters ahead.