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Private equity veteran to run London - for £1
Newly-elected London mayor Boris Johnson has managed to persuade Tim Parker, one of private equity’s favourite managers, to sign up as his right hand man. Parker has been appointed as First Deputy Mayor, chief exec of the Greater London Assembly Group and chairman of Transport for London. In other words, he’s suddenly become the second (possibly the first) most powerful man in London. And the good news for taxpayers: he’s so filthy rich already that he’s agreed to do it for £1…
Parker made his reputation – not to mention huge piles of cash – by running companies on behalf of several big buyout firms, including the AA and Kwik-Fit. And he appears to have been very good at it, judging by the rewards he’s accumulated – he has a reputation as a ruthless cost-cutter, which you’d think would be a good attribute for someone running a big public budget.
However, cost-cutting in big companies tends to mean sacking people – which is why he’s earned the nickname ‘the Prince of Darkness’ from his enemies along the way. It was the AA’s spat with the GMB trade union that really kicked off the row about private equity last summer, and the union still hasn’t forgiven him for it. ‘This is a scary moment for London's commuters,’ GMB boss Paul Kenny said today. ‘Tim Parker is one of the multi-millionaire elite private equity buccaneers who asset-stripped the AA by cutting jobs and cutting services and raising prices to customers.’
And it sounds like his chairmanship of TfL might be a tough gig too. RMT chief Bob Crow (the man with whom Boris wants to negotiate a no-strike deal), said today: ‘The world's finest metro system does not need an asset-stripper or a Prince of Darkness, but it does need its modernisation programme put back on track if it is to be ready for the 2012 Olympics’. We reckon their first meeting could be a bit tasty…
On the other hand, the beleaguered private equity industry will be delighted. After a tumultuous year, the industry’s top dogs will be thrilled to see one of their own ascend to this lofty perch. Not least because he’ll now be an influential voice within the Conservative Party – which has to be a good thing for the industry if they win the next election.
Perhaps this is a glimpse of the future under the Tories? Come 2010, we could have Damon Buffini running the NHS, Ronnie Cohen at the DTI (or whatever it's called that week), Philip Yea taking over Network Rail, and Jon Moulton in charge of the defence budget...
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Hugh Croad 23-May-08, 12:48
Tim Parker may have gained "something of the night" about him since, but when he was at Clarks Shoes (1996 - 2001) he certainly exhibited several behaviours which you would want from any Chief Exec.. He:- met staff at all levels
- listened to what people had to say
- had a comprehensive grasp of the big picture
- made decisions without procrastination
- made the effort to bring people on board with him, whether among the owners of the business or in the workforce.
- had the courage and vision to make investment decisions to rebuild the brand and the product range. I should know - I was the advertising manager, trying to get budget agreement for puitting the main brand on the TV for the first time.
Yes, there were people who lost their jobs - some indeed who shouldn't have gone. But there were and are many more employees and pensioners who owe their incomes to the turn-round that Parker catalysed in this once ailing but still great British company.
Given his original background in The Treasury and then his record at successive businesses and VC projects, it seems this man may have his feet very helpfully in both camps for Boris. Let's give the guy a chance!
Adam Rosenberg 08-Aug-09, 14:48
Private Equity's New EntrepreneursThey run their own firms, seek out smaller deals that don't generate headlines and make returns that are on par with the big boys
Jean Marc Lopez arrived on Wall Street in the early 1990s, just as a trader and consultant in private equity, venture capital deals. He oversaw several IPOs and acquisitions.
Jean Marc Lopez is the is an international entrepreneur and private equity/venture capitalist. He is the founder and managing partner of A-Venture Capital, he is part of a new generation of private equity entrepreneurs who run their own shops.
Jean Marc Lopez’s firm operate far from the spotlight, because they tend to focus on deals that don't generate headlines. But the returns on smaller deals that don't capture public attention can be just as high, if not higher. In 2000, New Mountain took control of Strayer, a publicly owned operator of colleges, for $115 million; it later sold its stake for five times its money.
Private equity entrepreneurs often work well beyond public view, making innovative deals and creating new markets.
Regarding the Financial crisis Jean Marc Lopez says that entrepreneurs who enter the market today will also be well-positioned to take advantage of an increase in private equity investment. The fact that there is more than $1 trillion in private equity capital waiting to be deployed, according to a report by Preqin, a London-based private equity research firm, suggests that continued stabilization will unleash considerable amounts of funding on a marketplace eager to receive investment capital.