Profile: Bon French '76
equity pioneer sees global expansion
French '76 says he's not on a soapbox, but he's passionate
about the prospects for private equity investing and probably
wouldn't mind winning over a few more converts.
is hard to see, but private equity's scope continues to expand
globally, and we are a participant in that expansion," says
French, CEO of Adams Street Partners, which manages $15 billion
in private equity investments out of offices in Chicago, London,
Singapore and Menlo Park, Calif. The firm has 175 managers
in 27 countries and 100 employees overall.
says some entrepreneurs want to work in venture-backed startups
or privately held growth equity companies for the opportunities
these offer. "Large companies don't provide the stability
they used to, and people get excited about the fact that [in
start-up situations] they can have more of a say about what
they do in the workplace."
He sees other advantages in his field, including
the ability to capitalize on technological advances and the
rise of entrepreneurship. "It's all gotten more institutionalized.
You don't have quarterly earnings pressures like a public
company, and we haven't had the scandals that existed in the
public setting. It seems that private equity is a better governance
interests align more naturally, French believes, because private
equity incentivizes management with stock as opposed to cash
salaries. "That allows people to do product development, geographic
expansions, things that might be risky short-term, but people
don't have to worry about [quarterly pressures]."
mean private equity offers easy success, warns French, also
a Northwestern University trustee. "There's no simple formula,"
he says. "It takes hard work, a lot of smart people and prudent,
has been in the investment sector for more than 30 years.
He began his career in the mid- 1970s doing private placement
bond investments at Connecticut General Insurance Company
in Hartford, then returned to Chicago in 1980 to work in First
Chicago Bank's trust department.
was a lot to learn. I enjoyed the investment world," says
the Kellogg graduate, who has also remained close to the school,
serving on its advisory council and returning to share his
knowledge with students. "Forecasting the economy, forecasting
interest rates, forecasting Fed activity was something I found
very interesting. I enjoyed going on plant tours, seeing manufacturing
operations, understanding what made the business work. You'd
get your hands into the details and then structure the financing."
moved into First Chicago's venture capital department in 1983,
when the markets exploded with excitement about biotechnology
and personal computing, coupled with strong overall economic
and his colleagues expanded the boundaries of private equity
in other ways, buying so-called secondary interest for the
first time in the mid-1980s, investing in buyouts soon after
and distressed debt in the early 1990s. "We've kept innovating
and expanding, along with the market," he says.
and subsequently Brinson Partners, the firm that bought out
the bank's institutional asset management activities in 1989,
developed valuation guidelines for venture capital and benchmarks
for private equity that led French and his colleagues to be
inducted into the Private Equity Hall of Fame in 2000. Around
that time, Adams Street Partners spun out of UBS, which in
1998 had merged with Swiss Bank, the institution that had
bought Brinson three years earlier.
a relationship business," French says. "We have tremendous
relationships with our general partners, portfolio companies
and clients. These relationships bring us investments, deal
flow and new clients. We've actually turned away some money
for nine years in a row. We stay disciplined and get results
by not getting too big." Those results include a 23.8 percent
compounded return since 1979 and 39.4 percent over the past
is all we do," French adds. "We don't do hedge funds. We're
not investors in timber or other things. We're very focused."