In a surprise announcement to both his colleagues and the private equity market at large, Michael McKeever stepped down in mid-October from his post as head of Lehman Brothers’ global private equity operations.
A 21-year veteran of the firm, McKeever had been tapped just over a year ago to revive and reorganize a private equity business that some felt was still in disarray following the 1994 departure of four directors to form The Cypress Group.
“That changeover happened over seven years ago, and we’re actually larger than Cypress now in terms of assets under management,” said William Ahearn, senior vice president and director of communications with Lehman Brothers. “Mike only had this particular job for about a year or so, although he did an amazing job putting different businesses together under the same umbrella and helping us build a few new things.”
Indeed, the firm now boasts a fully functioning private equity division that features a $2 billion merchant banking fund, an almost fully invested $350 million venture capital vehicle, an $800 million-targeted communications fund scheduled to hold a final close within a few weeks and a $1 billion-targeted real estate offering expected to hold a first close next month.
So far, no specific reason has been given for McKeever’s surprise decision, except for a vague prepared statement from McKeever citing a desire to pursue other interests. What is fairly certain, however, is that the move is not acrimonious as McKeever will stay on through year-end in the private equity group and also indefinitely continue his role on the communications fund’s advisory board.
As for filling the top spot, Lehman promoted Michael Odrich, who had spent the previous five years as managing director of the firm’s venture capital business. Prior to that, Odrich worked in the bank’s mergers and acquisitions department and helped reorganize the merchant banking business following Lehman’s spin-off from American Express.
“Mike’s decision really surprised a lot of people because he was doing a really good job,” Odrich said of his former boss. “I know that when someone leaves a job like his, The Street starts thinking he was forced out but that wasn’t the case here – it was an incredibly personal decision for him – and I certainly wasn’t angling for this job.”
He added that he will act a bit more like a chief investment officer than did McKeever, who he said was primarily involved in administrative activities. As such, Odrich will not give up any of the board seats he has acquired while working in venture capital.
As for who will fill Odrich’s shoes in the VC department, Tom Bannahan and Mike Castleman will act as co-heads, with the former working out of Menlo Park, Calif. and the latter based in New York.
James Peet will remain managing director of the Communications Fund while Alan Washkowitz will stick as managing director of merchant banking.