Politics and private equity – the revolving doors

François Fillon (former French prime minister)
François Fillon joined private equity firm Tikehau Capital as a partner in late August, wasting no time in turning his career around following a spectacular fall from grace in the recent French presidential election. Fillon will be based in the firm's Paris office and will start in his new role on 1 September.

His role as adviser to Nicolas Sarkozy in the run-up to the 2007 presidential election, which eventually led to Sarkozy's victory, paved the way for his appointment as prime minister the same year. Fillon remained prime minister for the whole duration of Sarkozy's mandate, eventually resigning when François Hollande was elected in 2012.

Fillon ran as the centre-right Les Republicains candidate in the French presidential election earlier this year. Although he had won the primary of his party in 2016 with a large majority and was originally tipped as a front-runner in the election, reports accusing him of having used more than €800,000 of state money to finance potentially fictitious jobs for his wife and children dealt a serious blow to his bid. He was eventually knocked out in the first round of the election.

Mitt Romney (former US presidential candidate)
Arguably the most famous example of a successful crossover from private equity to politics, Mitt Romney co-founded Bain Capital in 1984 and led the firm to become one of the largest private equity outfits in the world. First focusing on venture, Bain Capital jumped on the LBO bandwagon and struck deals including  Sealy Corporation and Domino's Pizza.

Romney made his political debut by standing – unsuccessfully – for the US senate in 1994. He formally left Bain in 2002 to focus on the Massachusetts gubernatorial campaign, which he won. He stood in the Republican presidential primaries in 2008 but ultimately conceded to John McCain. Romney secured the Republican nomination for the 2012 presidential election but eventually lost to Barack Obama. His financial background was heavily scrutinised during the campaign, which contributed to reigniting debates around private equity's job-creation record.

 
Nicolas Sarkozy (former French president)
Nicolas Sarkozy (who famously enjoyed an oft-fraught relationship with his prime minister François Fillon) has always made a point of being particularly sympathetic to the needs of entrepreneurs, and has been determined to put an end to France's uneasy relationship with personal wealth. He is understood to have come pretty close to putting words into action on both counts.

In 2013, in the wake of his defeat to François Hollande in the 2012 elections, rumours surfaced that Sarkozy had been traveling the globe to garner support for a potential €1bn private equity fund. French information website Mediapart broke the news, citing anonymous sources and "evidence" from the French financial investigation body. Although Sarkozy's entourage vehemently denied the claims, rumours surfaced again a few months later when the former president was reported to have met with Spanish bankers ahead of the launch of the vehicle.

Sarkozy eventually decided to stick to what he knows best, though, staging a triumphant comeback to lead the Les Republicains party in 2014. He stood for the party's primaries in 2016 but was knocked out in the first round, in what many saw as a final blow to his political career.
    

Al Gore (former US vice president)
Al Gore rose to prominence following the end of his tenure as vice-president in 2001 largely due to his climate-change activism. Less well known is his involvement in the investment world, although environmental concerns are, again, a cornerstone of his work.

Gore co-founded Generation Investment Management in 2004, an investment partnership that he still chairs to this day. The firm focuses on sustainable investing via a range of strategies, targeting both quoted and unquoted businesses worldwide. Gore also joined Kleiner Perkins Caufield & Byers in late 2007 as a partner in the venture house's Green Growth team.

Lionel Zinsou (former PAI Partners chief executive)
Much like Mitt Romney, Lionel Zinsou jumped into the political arena after a storied career in private equity, rather than the other way around: the former chief executive of French private equity firm PAI Partners was appointed prime minister of the Republic of Benin in mid-2015. Zinsou, who holds both French and Beninese nationalities, stood for re-election in 2016 but lost. He now leads progressive thinktank Terra Nova.

Zinsou joined PAI in 2008, having previously worked for investment bank Rothschild. He had already started cultivating links to the political sphere, having worked alongside former French prime minister Laurent Fabius. Zinsou's arrival and rise at PAI sparked internal controversy, which ultimately resulted in the departure of key partners Bertrand Meunier and Dominique Mégret.     

Alain Madelin (former French finance minister)
Alain Madelin held several governmental positions in France in the 1980s and 1990s, culminating in a four-month stint as finance minister in Jacques Chirac's government in 1995. He also ran as a candidate in the country's 2002 presidential election, scoring less than 4% in the first round.

Madelin remains an oddity in the French political spectrum as a staunch advocate of Reaganomics-style economic liberalism – therefore, it comes as no surprise that he launched a private equity fund in 2009. Mid-cap investor Latour Capital closed its maiden fund on its €115m hard-cap in 2012. It followed up by closing its second fund on its €300m hard-cap in late 2015 after less than a year on the road.

Gordon Bajnai (former Hungarian prime minister)
Placement agent Campbell Lutyens appointed economist, investment banker and former Hungarian prime minister Gordon Bajnai as chair of its global advisory board earlier in 2017.

Bajnai took on the role after sitting on the advisory board as a part-time executive since 2011. In his new job, he helps with the management of senior-level relationships, provides advice to clients and counterparties and supports the group's development.

As well as serving as prime minister of Hungary during the 2009 economic crisis, Bajnai has experience as an investment banker at Creditanstalt, as a CEO of a private equity holding company and a number of advisory and board roles.

The Carlyle connection
As one of the largest and oldest private equity outfits in the world, The Carlyle Group has been a firm favourite for politicians fancying a change of scenery. Former UK prime minister John Major is among those to have worked for the group, joining its European advisory board in 1998 and becoming chairman of Carlyle Europe in 2001, though he stood down in 2004. In the US, meanwhile, the firm notably employed former president George HW Bush as a senior adviser between 1998-2003; among other former politicians, it has also worked with former Reagan chief of staff James Baker in an advisory capacity.

 

Friends and family

With the worlds of politics and finance overlapping on a number of occasions, there is often no need to get to six degrees of separation to spot connections between private equity professionals and the political sphere.

Nicolas Sarkozy
Should Sarkozy have decided to give private equity a go after all, he no doubt could have counted on valuable advice – the former French president's half-brother, Olivier, was a managing director and head of global financial services at private equity house Carlyle Group until 2016. He joined the firm in 2008 and was based in the New York office.

George Osborne
The UK chancellor's brother, Theo, launched a venture capital firm in 2014. Force Over Mass Capital manages an SEIS/EIS fund to back early-stage companies.

Nathalie Kosciusko-Morizet
A former environment minister in Nicolas Sarkozy's government, 'NKM' also stood in the Paris mayoral election and is currently an MP in the French parliament. Her brother, Pierre, co-founded venture capital firm Isai in 2009 after a successful career in business and the VC has been particularly active in France since its inception.

Mark Florman
The former BVCA chairman and current chairman of Time Partners and LPEQ, Mark Florman is well known for being involved with the UK's Conservative party. He has notably served as the party's senior deputy treasurer and reportedly enjoys close ties with figures such as former prime minister David Cameron and current foreign affairs secretary Boris Johnson.

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