I-banking botique Evercore Partners today announced that it has hired Jim Matthews, formerly with Welsh Carson Anderson & Stowe, as its new co-head of private equity. The private equity group currently manages over $1.2 billion, which it invests in both venture capital and buyout transactions. So let’s play 5 Questions with Austin Beutner, Evercore’s co-CEO, co-founder and chief investment officer:
1. Let’s begin with the news of the day, Evercore’s hiring of Jim Matthews as co-head of private equity. What is the prior relationship between Jim and Evercore, if any?
We’ve known Jim for a long time. My partner Michael Price has been involved in a number of things with Welsh Carson, and had the opportunity to work with Jim many times. So we’ve had years of deep interaction. There also is an interesting human connection, in that both Jim and Neeraj Mital – our other co-head of private equity – started their careers together at Solomon Brothers nearly 20 years ago.
2. Many investment banks – both bulge-bracket and boutique – have been spinning out their PE and VC groups into independent entities. Why has that not happened at Evercore?
Every business we’re in is better because of the combined strengths of the larger partnership. On the investing side, our relationship with the corporate community makes us more informed and smarter investors. We know more management teams and entrepreneurs, which helps us add more value after investing.
We also don’t have a conflict in terms of financing, which I think is why many of the spinoffs have occurred. Bulge-bracket firm client bases are heavy with LBO firms, and clients often don’t want their bankers also competing with them for deal opportunities. We’re in a different position, because we have no leveraged finance business.
3. Evercore raised $660 million for its second fund back in 2002. Are you raising Fund III?
Sorry, but I’m not allowed to comment on that.
4. Your firm went public last year. Has that had any impact on your private equity business?
None whatsoever. We report to investors on a quarterly basis according to GAAP – just as we’ve done for many years. Those are audited and heavily vetted, and plan to continue that practice. Being private or public doesn’t affect it.
As an aside, more visibility for Evercore as a public company has helped us with dealflow.
5. Did you read The Accidental Investment Banker (by Evercore’s Jonathan Knee) and, either way, were you worried it would hamper your ability to secure financing for Evercore deals?
We have a policy where people have to come to us before doing something like that, so I knew about the book before it was published – as did Roger Altman. Our feeling was that it reflected Jonathan’s own opinions, so were ok with it. Our friends on Wall Street know that it does not reflect the thinking of Evercore.