Hiring Bob Lipp is one of the best moves Marge Magner’s ever made. At least that’s what she told me this morning in a discussion about Lipp and what LPs think of her firm’s moving parts. Despite (basically) losing her partner and co-founder to the corporate world, Magner and her young firm, Brysam Global Partners, couldn’t be happier.
See, Magner and her fellow ex-Citigroup exec Bob Willumstad formed Brysam Global Partners in 2007. They raised a $1 billion private equity fund to invest in consumer facing financial services companies in emerging markets.
But in June, Willumstad decided to take on a minor, insignificant extracurricular activity. He became CEO of AIG International. (You may have heard of it, some paltry $49 billion company.) He technically still works for Brysam Global Partners as a Senior Advisor, though the amount of time he commits can’t be much.
Naturally, I had a few questions for Magner and Lipp. Follow the jump to read what Brysam’s LPs did when Willumstad left, where the firm sees opportunities, the status of its fund, and a bonus piece of trivia.
Robert Lipp is another of Magner’s former Citigroup collegues, and after a brief Q&A, I got the impression that this feels a bit like a class reunion. At one point or another, Magner, Willumstad and Lipp had each run Citigroup’s Global Consumer business. They worked in the group together from 1999 to 2004, and through acquisitions and international expansion, grew the business from $4.9 billion in earnings to around $12 billion.
EG: With Willumstad busy at AIG, is Lipp his replacement? Lipp has been hired as a Senior Partner, so will there be another Managing Partner hire?
MM: Bob Lipp is all we need here. I have no plans for another managing partner.
EG: Did Brysam Global Partners’ LPs have the option to take back their commitments when Willumstad joined AIG, since essentially, they invested in two managing partners, not one?
MM: People who know Bob Williamstad felt strongly about him taking the job at AIG because they knew he was the right person for that job. There was great support for him to do that and great support for us because we’ve gotten off to a good start. It was a positive situation, and having Bob Lipp here is a big plus.
EG: So none of them withdrew their commitments?
EG: The firm is focused solely on emerging market financial services. Would that change as so many domestic opportunities arise in the financial sector?
MM: There’s a lot of assets available in the US and great opportunities, and we wouldn’t say never, but our business model is for emerging markets. We’ve seen the start of consumers really starting to use financial services in emerging markets and the growth rates are extraordinary.
BL: One way we can benefit from that situation is the fact that many of the companies under distress have multinational operations and are strategically looking at their balance sheets for possible ways to create liquidity. We feel there is going to be a greater flow of opportunities as many US financial services companies look to divest some of their holdings in emerging markets.
EG: Brysam Global Partners has deployed about $500 million of its fund over five investments: two in Mexico, one in Russia and two in India. Two of those deals are minority deals. With Bob Lipp, who has operating experience, will you look to make more control buys?
MM: In our minority investments, its important for us to have an opportunity to participate with management of the company, so we have board positions at Ixe Grupo Financiero http://www.brysam.com/news/pr090707.htm in Mexico and Vozrozhdenie Bank http://www.brysam.com/news/pr021908.htm in Russia. So the answer is while we’ve have minority positions, htye come along with active involvesment. If we don’t get that then we don’t want the investment.
Bonus Trivia: Brysam Capital is named after Willumstad’s grandchildren, Bryce and Samantha.
Edited for clarity and brevity