Gagen On History, Philosophy And Deals…. –

Given that you are studying for a masters degree in both philosophy and history, who is your favorite philosopher?

I have more than one, but I suppose to answer factually, the one I have read ever since I was a teenager is Machiavelli. And its not because Machiavelli is often seen as the business guru who knows how to manipulate co-workers. Machiavellis a real world pragmatist, and he deals with what is, as opposed to what youd like it to be. So, I like his philosophy in the fact that he is honest about weaknesses and problems and then what he suggests you do is use your creativity to resolve them.

What is the best deal youve ever been involved in?

Id have to pick Gucci, which was done while I was at Investcorp. The return was spectacular. And I dont take any personal credit for this, because I was only a participant in it. It was also a very hard deal to pull off because the company was highly fragmented in its shareholdingif youve ever followed the story of the Gucci family, the shareholding was scattered all over the place.

[Investcorp] had originally worked with Maurizio Gucci, who was shot dead during in the middle of the deals holding period. They had to pull an Italian business and an American business together and re-brand it. They got Tom Ford, one of the best designers of the decade, to re-brand and rejuvenate their product offering. And Investcorp was just incredibly brilliant in the financing. And eventually, when they [took it public], I think it was one of the highest returns their investors had ever seen.

How have you lost money in deals?

A good point to wrap up on that: You cant be too conservative in our industry. Over the last few years Ive seen people trying to edit risk out of deals, and theyve often done it by focusing on financial issues. But the point is, whether its buyouts or venture, we focus on markets and market building. Its a highly risky business and [sometimes] you will get it wrong. Every mistake Ive made in a dealI think its usually been a misunderstanding of the market changes that were going on around me Sometimes you end up with a company that Superman couldnt make profitable.

What is your favorite period in history?

Im really a scholar of World War II. There are two periods that saw enormous change. One was the Renaissance in Italy, which is my co-favorite, because it just saw an explosion of change in technology as well as artistically. But the reason I picked the second World War is because you have the same effect on the 20th Century. If you look at the world in the 1930s and then look at the world in the late 1940s, that periodin addition to the tragic war that occurredjust transformed every social and economic agenda that weve seen. So those two, theyre both transformative periods in history and thats why I love them so much.