Greenbriar’s Joel Beckman: Navigating the Long Road to Private Equity Success –

Joel Beckman did not go to a private high school or business school. He grew up in the Bronx with a financial curiosity only peaked by the spare cash he earned doing odd jobs for his old man’s interior design shop. And if someone had put 100 teenagers in a room and been asked to identify the future Goldman Sachs trailblazer, the uninterested Beckman probably never would have made it past the bottom of the list.

“I worked for my father and had a few various business ventures with my friends, but I never appreciated the excitement of being in business, or building a business,” Beckman recalls. “I was more attracted at the time to law, or being a history professor somewhere.”

After graduating from University of Rochester in 1976, Beckman chose to forego the professorial route and enrolled in Yale Law School.

The plan was simple: Finish up his three years and then go forth and change the world. The reality, however, was much more mundane. Following a clerkship with a Massachusetts State Supreme Court justice, Beckman found himself engulfed in laborious paperwork as part of a medium-sized New York-based law firm. He had anticipated the long hours, but had also figured at least some of them would be spent close to the action.

“I occasionally got to represent a client in a negotiation which I really liked to do but I hated the endless research because it was always one step removed from the actual transaction,” Beckman explains.

Soon, he’d be even more steps away than that.

During a late-night conversation in 1981 with a friend over at Goldman Sachs, Beckman groused about his predicament so much that his friend suggested he might find the stimulation he was looking for by signing up as an investment banker. Beckman initially returned to his anti-business roots and dismissed the suggestion, but an active recruiting campaign by eventual Goldman chief Steve Friedman, a kindred soul who had also never attended business school, appealed to Beckman’s need for change and own sense of self-worth.

“I was told that the key to being a successful banker was having good judgment. I felt I was a generally capable person and would be able to pick up the rest pretty quickly,” Beckman says.

He was thrust immediately into Goldman’s asset management group, working on everything from lease financings to private placements to more tax-oriented transactions. The immediate volume and complexity of the work was so overwhelming that Beckman considered quitting just a few hours into his first day, but was advised by his friend to give it a bit more time. By the end of the week, he was hooked.

Specifically, Beckman was intrigued by a leveraged buyout market that was very much still in its infancy when it came to organizations like Goldman. Insurance companies dominated mezzanine, junior and debt securities dealing and Beckman joined others in voicing a belief that the market could, and should, be broadened.

After a few years working on such matters as a generalist, Beckman got caught up in an internal I-banking reorganization at Goldman intended to establish specialty industry groups so it could better keep its finger on the pulse of different sectors. The change in focus, which occurred shortly before the 1987 stock market crash, saw Goldman executives ask Beckman to form a new global transportation group, even though he was not especially well-versed in aerospace or automotive industry trends. Moreover, his asset-backed financing background would not necessarily prove to be the boon those who hired him originally expected it to be.

“They thought that the business would largely come from asset-oriented transactions when, in fact, it largely came from mergers and acquisitions, recapitalizations, public equity transactions and the like,” Beckman says.

Despite such market changes, Beckman excelled in the position and helped make Goldman a vital destination within a transportation industry that had previously seen it as little more than a banking pit stop. By 1993, with Regg Jones fully groomed to assume the transport head job, Beckman accepted an offer from Friedman to oversee control and compliance issues for Goldman. The job was a bit of a tall order, given a handful of lingering dustups, but Beckman came through again partially thanks to his law background and was promoted to partner the following year.

“I tried very hard to stay in touch with the [transportation] markets during that time,” he says. “Not because I figured I’d go back to it, but because I had developed tremendous interest in it.”

After a return to investment banking in 1997, where he covered Fortune 100 companies like Coca Cola and 3M, Beckman began pining for more involvement in private equity activities. Rather than request a transfer, however, Beckman teamed up with Jones and former UAL Corp. (United Airlines) CEO Jerry Greenwald to form a transportation-focused buyout shop ultimately named Greenbriar Equity Group.

While the decision to leave Goldman was no doubt made with a heavy heart, Beckman now admits he could not truly appreciate the enormity of the undertaking until he and his partners began pitching their fund to potential limited partners.

“In hindsight, we should have been much more nervous than we were,” he says.

Not only did the trio lack a common track record, but it also went in search of money for a transportation fund when the Internet iron was still relatively hot. Indeed, Beckman said that while he and his partners weren’t suffering from envy over dotcom investment returns, many potential buyers were unable to reconcile their bonanza with pumping cash into such endeavors as trucking logistics.

Earlier this summer, the Rye, N.Y.-based firm closed its inaugural fund with $700 million. One third of the total was committed by Berkshire Partners, which will co-invest on every Greenbriar deal. Not only did that pairing lend Greenbriar’s reputation some additional heft during fund-raising, but also illustrates Beckman’s affinity for consensus decision-making.

“I’m not so arrogant as to think I’ve made a perfect decision and just go blithely into it,” he explains. “I’m high on consensus, and the three of us and Berkshire are very balanced in our approach. We’re supportive of each other, but also try to balance out someone who may be overenthusiastic [about a deal].”

He also believes that such meetings of the mind are essential between investors and the management teams in which they invest. While Beckman cites honesty and integrity as characteristics he most respects in a potential portfolio partner, a decision to make a deal can largely come down to an issue of interpersonal chemistry.

“It’s critical to quickly develop a degree of comfort and trust with the individual,” he says.

Such an attitude, which seems a far cry from the corporate raider image of most 1980s bankers, also pops up in Beckman’s personal commitment to charitable work. He currently serves on the University of Rochester and Yale Law School boards, works with a day school for handicapped children and is involved in a film program for disadvantaged youth.

Fact Sheet

Joel Beckman

managing partner

Greenbriar Equity Group

Born: The Bronx, N.Y.

Education: Bronx High School of Science, 1972; University of Rochester, 1976; Yale Law School, 1979

Career Path: Supreme Judicial Court of Massachusetts 1979 – 1980; Kramer Levin Naftalis & Frankel LLP 1980 – 1981; Goldman Sachs & Co. 1981 – 1999; Greenbriar Equity Group 1999 – present

Last Book Read: Half-Moon and Empty Stars by Gerry Spence

Favorite Book: No Ordinary Time by Doris Kearns Goodwin

Favorite Movie: Lawrence of Arabia

Last Movie Seen: Pollock

Favorite Musician: Bruce Springsteen

Favorite Sports Team: New York Yankees

Favorite Travel Destination: Pebble Beach

Pet Peeve: Airport Delays

Most Admired Historical Figure: Franklin Delano Roosevelt

Favorite Quote: “The best aspiration is to not outdo others, but to outdo ourselves.” – Anonymous

Investment Philosophy: Identify companies that are positioned to benefit disproportionately from change, and always maintain your investment discipline.