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We all know Bob Kraft. But what about the other ultra-rich Massachusetts business man, accused last week of allegedly soliciting prostitution in South Florida?
It would be John Childs, a private investor who remains discreet, even by secret standards of the world of private investment.
"My theory has generally been this: do not talk to people and they will not write to you," he told Globe columnist Steve Bailey in 1995, when Childs had just started his own business, JW Childs Associates. For eight years, Childs was one of the leading suppliers of Boston's pioneer, Thomas H. Lee, where he had bought $ 130 million from the Snapple beverage company, then $ 1.7 billion a few years later.
Childs still does not talk much, but we talk a lot about it because it's not every day that two highly respected business magnates are accused of sponsoring a "day spa" as part of a crackdown. trafficking in human beings. Childs, like Kraft, was not arrested and denied breaking the law. Childs' lawyer also called the allegations against him false.
Investment firms live or die according to their reputation. Will the charges against Childs damage the one for which he worked? Probably not much, and here's why.
Childs, 77, no longer works full-time, his role at JW Childs has declined over the past decade and he holds only a minority stake in the company, according to a person familiar with the situation . He is not a "key man" in the current fund of the company, which means he is not considered crucial for his investments, said this person.
J.W. Childs seems isolated from John Childs' personal problems at this stage. Moreover, he says his situation is obscure.
"We have no information on allegations involving John Childs, if that's what we saw in the media," said a spokesman for the company.
I did not know anything about the company or Childs, a graduate of Yale University and Columbia University, who worked for Prudential Financial for 17 years before joining Tom Lee when the new has been announced. This is partly because of their preference for flights under the radar, and partly because the Waltham-based company is a niche player compared to Boston's much larger and better-known stores, such as Bain Capital, HabourVest Partners and Thomas H. Lee Partners (Lee himself). no longer there).
(Private equity firms use a combination of investor money and many loans to acquire companies, to make them more valuable by improving their operations and strategy – and sometimes by cutting jobs or sending them abroad, and then seeking to sell the companies at a profit, either through an initial public offer or to another buyer).
The basics I've learned are:
■ J.W. Childs has invested $ 3.7 billion in equity over its 24 years of corporate purchases, according to its website; some companies do it in one year. Transactions made are relatively modest and value businesses acquired at $ 260 million on average.
■ The company focuses on consumer products and specialty retailers. The companies he has invested in over the years include Joseph Abboud, Meow Mix and Mattress Firm.
■ In addition to Childs, who is president, the firm has eight partners and operating partners. they are all men. Of the five experienced investment and operating professionals, one is a woman – the chief financial officer. Two of the three young people are women.
I know what you think (because I thought so too): a woman out of 14 top professionals? Only 7% – which is below average in the private equity sector.
According to a 2017 report by PricewaterhouseCoopers, women accounted for 9.4% of experienced private equity professionals. The average venture capital firm with a well-known diversity gap is 11.5%. This is 11.2% in hedge funds, the "bastion" of Wall Street.
J.W. Childs should not be tarnished by the alleged misdeeds of its founder. But, with much of the rest of the investment activities, he should be embarrassed by his lack of true gender diversity. Repairing it would be a small step in creating a culture where no one would think that it is acceptable to go to a day spa like the one in South Florida.
You can reach me at [email protected] and follow me on Twitter. @GlobeNewsEd. Sign up for my Talking Points AM newsletter here.
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