It used to be that a retired chairman of the Joint Chiefs of Staff would stroll out of the Pentagon and into a corner office of the The
After stepping down in October from the United States military’s most senior position, and spending the next six months being courted by buyout firms, four-star Marine Gen. Peter Pace late last month joined mid-market LBO shop
Pace, who holds an MBA from George Washington University, won’t be occupying a ceremonial seat for the firm. As an operating partner, he’s already taken over the chairmanship of portfolio company Pelican Products Inc., a maker of specialty lighting systems and virtually indestructible cases that’s looking to boost its sales to domestic and foreign militaries. Pace also sits on the board of ILC Industries Inc., a Behrman Capital company that makes defense electronics.
Since October, Pace said he heard near-daily pitches from a variety of would-be suitors, many of them in private equity. He settled on New York-based Behrman Capital following a three-month courtship.
“I talked to some folks on the higher end of the spectrum and some folks on the lower end of the spectrum, and I like where Behrman Capital is right now,” Pace said. “At the end of the day, they’re not breaking up companies. They’re taking good companies and making them better. I really like that growth aspect.”
Behrman Capital has been active in the defense sector for a decade, and LBO shops of all stripes have identified the sector as a growth area. The firm assigns an operating partner to each of its target industries, which include defense, information technology and specialty packaging. Grant Behrman, the firm’s managing partner, said he’s expecting Pace to bring with him not just an “unparalleled network of relationships” but also sound judgment, a deep knowledge of the defense sector and an ability to mentor portfolio company CEOs, particularly when it comes to long-term strategy.
“Our belief is that working both with existing portfolio companies and prospectively new platforms with that background is extremely valuable,” Behrman said.
Pace, who was frank about his lack of business experience following four decades in uniform, was equally insistent that his position at Behrman Capital wouldn’t set up the firm’s portfolio companies for a gusher of Defense Department contracts. Rather than being a “conduit to the Pentagon,” Pace said he would leverage his knowledge of the military “to see around corners” to where the nation’s military apparatus is heading.
“What I do not bring to the corporate world is experience in business,” Pace said. But “I have a great deal of experience at the strategic planning level.”
He added that his experience working “with powerful folks with strong opinions” would come in handy in boardrooms. If Pace is a little shaky on, say, financial modeling, it’s worth remembering that’s not why LBO firms sought him out.
“We have plenty of people at Behrman Capital who can do that,” Behrman said.