Tom Keck looked up to Brian Dale, a founding member of
Though only a few years older, Keck saw in Dale someone who valued what he had in life and knew how to appreciate the people around him. Keck spoke with Dale a few days before a Blue Capital meeting scheduled for Sept. 12, 2001 in Los Angeles; Dale had just returned from vacation with his wife, Louanne Baily, and three children.
“I asked him how vacation was, and he said, ‘It was the greatest vacation I ever had. I got to spend a lot of time with the kids and with Louanne,'” recalled Keck, who, at the time, had just welcomed his own second child. “I often reflect back to the sound in his voice, and I think if I can just capture that, if I can be that satisfied with the blessings I have, why should I worry about the chaos that passes through our lives?”
Dale, attending meetings in Boston, was supposed to fly to Los Angeles on Sept. 10. But he didn’t. Instead, he caught the first flight he could the next morning bound for Los Angeles: American Airlines Flight 11, which terrorists crashed into the north tower of the World Trade Center at 8:46 a.m. that morning. Dale was 43.
Perhaps no private equity firm was as deeply and immediately impacted by the attacks on Sept. 11 as Blue Capital, possibly the only firm to lose a senior executive that day. For a small, tight-knit shop grappling with the challenges of managing its first investment fund in a tough economy, Dale’s loss was devastating.
In 1997, four former partners at McKinsey & Co.—Bill Pursche, Chris Gagnon, Chip Hughes and Robert Taylor—launched Blue Capital. Hopes were high. Though they lacked a track record of buying and building businesses together, their selling point was using their consulting expertise to focus on “operationally complex and growth situations,” according to a press release from that time.
Dale, who had gone to undergraduate school with Pursche at Dartmouth College, joined and became principal and CFO. At Dartmouth, Dale played football—he was known as “Hulk,” thanks to his 6-foot-2, 240-pound build—and graduated magna cum laude. He also received an MBA from Dartmouth’s Tuck School of Business and a law degree from the University of Michigan.
In 1999, New York and Los Angeles-based Blue Capital closed its first fund, with $112 million in commitments, after a two-year effort. Investors included
By mid-2001, the firm employed about eight investment professionals and had invested in at least seven companies, according to data provider Capital IQ. These included FNX Ltd, a software provider for financial institutions; M2 Automotive, a chain offering collision repair services; and Quivox Systems, a B-to-B internet software provider for insurance companies. In an October 2000 story in Buyouts, Gagnon said the firm expected to start raising its second fund the following year, targeting $350 million.
Keck was at home in Los Angeles on Sept. 11, on paternity leave with his newborn son. “I remember sitting there watching the towers burning, and then Robert [Taylor] called me and said, ‘I think Brian was on flight 11,” Keck said. “For the first few hours we were just trying to figure out where everybody was.”
By mid-afternoon, the Blue Capital team had been able to confirm that Dale was on flight 11. A few days later, after air travel had been restored, the team assembled in New York for a memorial service Hughes organized for Dale. “I can still remember flying into Newark and smoke was still visible from the World Trade Center,” Keck said.
Serious Challenges
Soon after the memorial service, the remaining Blue Capital team had to get back to work. “We had strategic projects that were going on in the existing portfolio, so they had to go on, and we had deals we were looking at,” Keck said. “The momentum of some of the things we were working on was therapeutic in a way, because you could take your mind off of it”.
But even before Sept. 11, Blue Capital was facing serious challenges. The economy was starting to sputter, and the Blue Capital team was spending much of its time helping its portfolio companies. The purpose of the Sept. 12 meeting was to discuss re-organizing the firm, Dale’s widow, Louanne Baily, said. On vacation just before Sept. 11, Baily said, “Brian had spent a lot of time on the phone working to restructure the firm. He was excited about it and the new opportunities.”
The immediate years after Sept. 11 were among the most difficult in recent memory to raise new funds. For a firm like Blue Capital, which had no realizations, the challenge was all the more daunting. Meanwhile, the portfolio struggled. At least two companies—Quivox systems and M2 Automotive—would eventually go out of business.
Keck said it was clear by 2003 or 2004 that Fund II was out of reach. He recalled the period as among the more chaotic in his personal and professional life. “It was a time of great turmoil generally—in the economy, in the portfolio, in trying to get your arms around what happened in 9/11.”
Blue Capital would go on to sell at least two of its portfolio companies, according to Capital IQ. In February 2007, the firm sold FNX to GL TRADE S.A. Later that year, it sold Stravina Operating Co. LLC, a company that sold stationary, jewelry and accessories, to UltraPRO LP, a company owned by another buyout shop,
In 2004, Keck became CFO of Stravina. In 2005, he formally left Blue Capital and became a managing director at the advisory firm
Baily said she remains friendly with Hughes and his wife, as well as other executives and investors in Blue Capital. After Sept. 11, Hughes and others helped establish the Brian Dale Family Trust to fund the college education of Brian and Louanne’s three children (the fund still accepts donations; see adjoining table for contact info).
For many from Blue Capital, Dale’s death is not a topic they wish to discuss with a reporter. Hughes, Taylor and Gagnon declined to comment for this article. Other executives did not respond to requests for comment.
Keck knew Dale for a little more than a year, but nevertheless said “he had a huge impact” on my life. He left Keck a reminder that no matter how busy you are you can make time for those you care about.
A few days after Sept. 11, Keck received a card postmarked from Boston’s Logan International Airport. It was from Dale, congratulating Keck and his wife on the birth of their son.
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