IVCA Profile Q&A: Patricia M. Cloherty, Chairman of Delta Private Equity Partners

IVCA Profile Q&A: Patricia M. Cloherty, Chairman of Delta Private Equity Partners

March 3, 2010

CHICAGO - “ Attendees at  The Masters of Private Equity and Venture Capital: Management Lessons from the Pioneers of Private Investing book launch event in January had the privilege of hearing from three of those pioneers profiled in the book.  In our community the least known of these was the plain speaking Patricia - œPat-  Cloherty, Chairman and CEO of Delta Private Equity Partners.

 

Pat Cloherty's career is practically the modern history of the Venture Capital/Private Equity business. After an early career path that included the Peace Corps, Ms. Cloherty was hired in 1970 by Patricof & Co Vendors, which became Apax Partners. Learning the business from the ground up, she undertook a byway to the U.S. Small Business Administration.

 

Intending to retire in the mid-1990s, she accepted one more venture challenge - “ this one  during a time of historical changes. Leading Delta Private Equity Partners into post-communist Russia, she established investment deals establishing banking, credit, television and retail in the former Soviet Union.

 

IVCA interviewed Ms. Cloherty recently as a follow-up to her January appearance, and she candidly shared many insights to her adventurous life.

 

IVCA: In your earliest career days in venture capital (1970s), I would assume that you were often the only woman in the room during meetings. What strategy did you use to break through some of the barriers of the ""old boy"" business network?

 

Pat Cloherty: Yes, I was generally the only woman in the room in the early days of venture capital in the 1970's. Frankly, I didn't have much strategy for handling the male/female 'thing.' I tended just  to focus on getting the job done properly and having a good time at it. Also, it helped that Alan Patricof, who headed the firm, when asked by management teams if they had to work with 'the girl', would respond 'Yes, she's all we've got!'

 

IVCA: Your rise in business coincided with the civil rights accomplishments of the woman's movement in the 1960s and '70s. Do you think those victories were linked to the business success that women brought to the economic table, or was it more a natural evolution in the post-technological age?

 

PC: I think both factors contributed to women's advancement in business and finance, certainly their growing success, but also the changing economy. It is one thing when a nation is building railroads, steel mills and the heavy infrastructure requiring brawn. It is quite another when the main growth industries are knowledge-based as in today's mature economies. Women are equals in the brain department as far as I know, and the 'feeder systems' like colleges, universities and trade schools adapted to this over time.

 

IVCA: In your opinion, has there been a subsequent backlash toward women in business and the boardrooms since the initial breakthroughs?

 

PC: There was a bit of a backlash when a number of women who were more decorative than substantive began to be promoted or elected to boards in the early years. It didn't last long. And it pales in comparison to the broader turmoil in corporate governance underway today affecting all parties, not just a subset.

 

IVCA: What aspect of your early education and life gave you the taste for adventure that eventually led into your Peace Corp duties, the Mexican political seminars and the venture capital career change?

 

PC: Growing up in the great outdoors of California's Sierra Nevada mountains provided an excellent start. Competitive sports, good schools and an inspired family (both parents were immigrants to the U.S.) launched us into the world. The Peace Corps was new as I was finishing college, so off I went, never mind that I requested a Spanish-speaking country and they sent me to Brazil where, of course, Portuguese is spoken. Much travel followed, plus a venture capital career in several countries with what is now Apax Partners. 

 

IVCA: Was that same mindset the reason behind your decision to take on Russia?

 

PC: The post-retirement Russia 'gig' has been my form of public service - “ to put a lifelong experience of financing diversified growth companies to work in an economy in radical transition from top-down centralization to bottoms-up entrepreneurship.  Challenges don't come much bigger than that.

 

IVCA: Establishing a new economy from the ground up, as you experienced in Russia, was fraught with the variations on their currency. What do you think about the Euro standard coming into play, and how has it effected the Russian economy?

 

PC: The Russian Ruble over 20 years has been through three tumultuous devaluations interspersed with periods of relative stability.  Euros and dollars tend to be stashed away by individuals and companies against periodic downturns.  But in general, the government of the Russian Federation has maintained conservative and prudent fiscal and monetary policies.

 

IVCA: Some of the Russian deals were very cloak-and-dagger - “ the secret meetings, the questionable backgrounds, even the need for protection. Given your famous disregard for investments in feature films, what particular circumstance in your Russian experience made you think 'this would make a great movie?'

 

PC: Some of the Russian deals sound more 'cloak-and-daggerish' than they were, especially after the mid-1990s and after diversification away from natural resources and heavy industry began to take hold. I would rather make a movie or two on some of the potentially-successful modern businesses being built rather than focusing on thuggery.

 

IVCA: How did your modest family background shape your ambition?

 

PC: I love my modest family background! It drove me to work hard, study hard and, yes, play hard, always honestly. It also prevented me from getting a sense of 'entitlement' - “ a spirit far too prevalent in today's world. 

 

IVCA: What personal accomplishment do you feel is the best legacy for your parents and family?

 

PC: In Girl Scouts we had a saying: 'always leave the campsite better than you found it.' If I can manage to do that in my own small way, that's the legacy of which my family would be proudest.

 

IVCA: Beyond Russia, where in your opinion, might be the next 'undiscovered territory' for forming venture capital partnerships and building a new economy?

 

PC: I think various investors have 'got it right' on the BRIC's - “ Brazil, Russia, India and China - “ each distinctive.  More interesting to me than simple geographical designations, are the areas in each economy that can create value, well and rapidly, to improve standards of living at a healthy clip. Robust Intellectual Property and protection related to those properties is a fertile area in all these countries, provided there is an appropriate educational, managerial, and legal structure is put in place to generate it, commercialize it and protect it in the courts.

 

To read more about Pat Cloherty, - œThe Masters of Private Equity and Venture Capital: Management Lessons from the Pioneers of Private Investing-  can be purchased here.  We hope that IVCA members will help this book go ""viral"" - “

  • buy the book,
  • recommend it to a friend
  • review it at Amazon.com

- all proceeds from the book's sales support The IVCA Scholar program!