Legal eagle soars in GSC Group

In the latest string of changes to reflect its ambitions to become a major financial institution, GSC Group has promoted its general counsel and chief compliance officer David Goret to one of the highest echelons at the company ?senior managing director.

Goret's promotion comes as part of the firm's installation of compliance and control capabilities at the Florsham Park, New Jersey-based alternative asset manager, among other significant changes.

Goret is not the first non-investment professional to be named a senior managing director ?GSC's finance and administration head Andrew Wagner was promoted to his position in early 2006. The firm also has a six-member management committee to oversee its operations.

Before joining GSC, Goret, 43 years old, had 16 years of experience as general counsel for several public and private companies, including Icon CMT Corp, which was acquired by Qwest Communications, and Mercator Software, now part of IBM.

?[Goret] has ensured that GSC's compliance and control procedures have kept pace with the firm's significant growth,? said Robert Cummings, senior managing director and chairman of the risk and conflicts committee at GSC, said in a statement.

And what growth it has been. Over the past two years, GSC has undertaken a $140 million recapitalization, changed its management and ownership structure, broadened its business lines and product offerings, and integrated its European and US operations.

The firm has also changed its name, from GSC Partners, to reflect its new ownership structure whereby 88 percent of the firm now belongs to employees. Diminishing control may scare some leaders, but Alfred Eckert, GSC's founder, chairman and chief executive, argued that the new structure enhanced his own stake. In an interview with Private Equity Manager last year, he said, ?The percentage isn't what's important. It's how big the pie is.?

That pie has doubled in just one year, to $18.3 billion in assets under management, now reorganized into three main investment platforms: equity and distressed investing, which includes control distressed debt and equities, and other credit opportunities; corporate credit, which includes collateralized debt obligations, collateralized loan obligations, mezzanine lending and derivative products; and real estate, which includes mortgage-backed securities, mortgage-related hedge fund and high yield real estate debt.

Real estate comprises half of GSC's assets, helped by the firm's expansion two years ago when it formed a joint venture with Tishman Speyer to develop commercial and residential properties in China, and the formation of real estate investment trust to invest in real estate-related securities.

GSC's largest fund to date is a structured finance vehicle which closed in 2005 at $1.8 billion. Last year, it closed an additional two funds, a €420 million ($543 million) European CDO fund and a €1 billion European mezzanine fund.

The firm has also doubled its employees, to 170 across its offices in New Jersey, New York, Los Angeles and London. Several key hires were made from Eckert's old stomping grounds, Goldman Sachs, where he was a partner until 1991. Joseph Wender, who joined in 2005, now heads the real estate group and is chairman of the finance committee at GSC. Michael Lynch, who joined in 2006, is chairman of the strategic initiatives committee. Like Eckert, Wender and Lynch, Cummings was also a partner at Goldman Sachs, as was Richard Hayden, vice chairman and head of the corporate credit group at GSC.

GSC has also been building its team in Europe, where it most recently hired another former Goldman Sachs partner, as senior advisor and member of the firm's board of directors. Before her retirement, Lawton Fitt was Goldman's European head of high technology investment banking.

Other recent senior appointments include Richard Scharfman, a partner at Stroock & Stroock & Lavan, a law firm, to its board of advisors; Brian Oswald, chief financial officer from Capital Trust; Alexander Zabik, senior managing director and head of high yield real estate from BlackRock; and Robert Paine, senior managing director in credit strategies from Stanfield Capital Partners.

Mynes defends UK pension fund best practice
Paul Mynes, author of a 2001 UK report on best practice for pension funds, has defended his recommendations, which included increasing investment in private equity, as The National Association of Pension Funds has questioned their relevance. The new NAPF paper questions whether his regime is still best practice given the increased complexity of pensions, where fund defi-cits now show on company balance sheets and legislation and longevity present challenges to over-stretched trustees. In an interview with PrivateEquityOnline, Mynes reemphasized the core of his principles-based approach to pension fund management and the role private equity and other alternative assets can play. He said: ?[My report] is even more valid. In 2001 it was considered radical. Now it is considered to be pretty conservative. It focused on the increased competence of trustees and ensuring investment decisions are appropriate, rather than following slavishly one industry model of investment.?

Heritage CFO joins Apax
Peter Jeton, the long-time chief financial officer of Boston-based private equity firm Heritage Partners, has joined global private equity firm Apax Partners in the New York office. Through a spokesperson, Jeton declined to comment. It is unclear what Jeton's role will be with Apax ?the firm's website lists him as a press contact. Apax's New York office is led by John Megrue and Allan Karp, two founding partners of New York middle-market buyout firm Saunders Karp Megrue, which was acquired by Apax in 2005. Among Jeton's duties at Heritage partners was limited partner relations. Heritage, founded in 1987, focuses on acquiring businesses from families. It is led by Peter Hermann, Michael Gilligan and Mark Jrolf. In 2005, Jeton was promoted from senior vice president to partner at the firm.

Fortress Group doubles on IPO
New York-based alternative investment giant Fortress Investment Group saw its market capitalization double on the first day of trading, to $12 billion (€9.1 billion) after shares soared to $35 per share upon their debut on the New York Stock Exchange. The IPO marks the first time a firm with a significant private equity business has gone public in the US; Fortress has $17.5 billion of private equity assets. The firm sold 10 percent in its management company, which on February 9 valued the entire firm at $12 billion. With about $30 billion in assets under management (including hedge fund, real estate and other alternative assets), its IPO values the nine-year old firm at roughly 40 percent of assets under management, a huge increase over previous valuations assigned to alternative investment management companies. In previous transactions, hedge fund and private equity fund management companies have been valued in the range of 10 percent of assets under management.

First Reserve names CAO
First Reserve Corporation, a US-based firm focused on the energy industry, has promoted Ann Gold to chief administrative officer. Gold joined the firm as general counsel in 2005 after being a partner in the transactions practice group at the law firm Morgan, Lewis & Bockius. She continues to advise on legal issues in her new position. As chief administrative officer, Gold oversees First Reserve's finance, human resources and office administration functions. First Reserve's president Ben Guill says, ?Anne has brought to the firm a history of extensive legal experience that has enabled First Reserve to grow at an exceptional rate while also playing an instrumental role in raising our largest fund to date.?