Secretary Of The Treasury Tim Geithner Moves Into Private Equity
Secretary of the Treasury Tim Geithner moves into Private Equity
Tim Geithner left the treasury with two goals, the first being to write his own account of the financial crisis and the second to make some of his own money. His book is done and due to be published next year, so that is goal one. Last Saturday Mr. Geithner announced he is joining Warburg Pincus so that would be goal two. Mr Geithner will be joining the ranks of other public officials such as David Petraeus KKR's Chair of the Global Institute and Kenneth Mehlman who became their Head of Global Public Affairs.
Mr. Geithner's wealthier friends have said that he, "needs to make some money". Spending most of his career in government finance, in the treasury he made around $200,000 a year plus $411,000 a year and a $436,686 separation payment from the Federal bank of new york. This may seem like a lot of money but compared to the corporate salaries of his friends in the private sector it is not much. Warburg Pincus trusts that they will get more than just high level contacts and insider knowledge of the treasury from Geithner. They know that he has proved himself as investment savvy. While working at the treasury Geithner dealt with hundreds of billions of dollars in investments for financial institutions to prop up the economy. “The roots of Warburg Pincus go back 45 years and we are really much more a global growth-oriented entrepreneur-centric investor,” says Chip Kaye, co-chief executive. “We have been active in starting and building businesses in energy, technology and healthcare; and we were very early investors in China and India. I think that’s one of the things that most attracted Tim – a broader investing context.”
“He supervised the management of what was, for a time, the largest investment portfolio in the world,” says Mr Millstein. “And though the public will never give him credit for it, he did it very successfully.”
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Lazard has $100 million more for investments
By Brett Cole
Lazard Australia Private Equity Ltd has made only one investment from its 2011, $120 million fund but that investment in sportswear company 2XU has been spectacular. It may however be hard to repeat as Lazard looks to make as many as five more investments with the $100 million left in the fund.
Gareth Young, director of Lazard Australia Private Equity, told DataRoom the fund’s realised return from its 2XU investment is in excess of two times money multiple, or a 50 per cent internal rate of return, per annum.
Lazard has sold some of its shareholding in 2XU to LVMH Moet Hennessy Louis Vuitton SA, enabling it to monetise an investment that is just two years old.
Lazard Australia has until 2021 to invest and liquidate investments from its second fund that will take stakes of up to 49 per cent in companies headquartered in Australia. The firm’s 2006, $330 million fund is fully invested and Lazard has five investments to sell from the fund in the next couple of years.
The firm’s $120 million fund usually takes minority stakes in companies using a minimal of leverage. Six people, mostly in Melbourne, work on investments.
Young says the Lazard fund is not a leveraged buyout or venture capital investor but a “corporate opportunities fund” that has no sector specialty and invests along “macro thematic” lines.
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Continued
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