Sir Ronald M. Cohen, MBA 1969
Chairman, Social Investment Task force, Bridges Community Ventures, & The Portland Trust
Cofounder & Former Chairman, Apax Partners L.P.
Sir Ronald Cohen helped lead Apax Partners to a prominent place in the world of venture capital and private equity. Last year, he stepped down from his management responsibilities to devote all his efforts to social investing in the United Kingdom and the Middle East. "Those who have had a successful career are obligated to give something back to society," he says.
After graduating from Harvard Business School, Ronnie Cohen made a smooth transition to the high-powered world of McKinsey & Company. Thus, it came as a surprise to his colleagues when he decided to depart two years later to cofound a firm that would advise entrepreneurial ventures. “While I was at HBS,” he explains, “Intel and a number of other exciting companies were just getting started, so there was considerable interest in smaller businesses. I wanted to be part of that ferment, and the risk involved made it all the more appealing to me. As I said to one of my McKinsey mentors, ‘I’m leaving because the view is better when you’re closer to the precipice.’ ”
MMG (Multinational Management Group) was launched in London, Paris, and Chicago in early 1972, but with Great Britain’s economy then bogged down with state-owned enterprises, high unemployment, and crushing tax rates, the ride in Europe was bumpy at best. By 1977, two of the four founding partners had left, leaving Cohen and Maurice Tchénio (MBA ’70) to look for help.
Cohen approached Alan Patricof, a pioneering New York venture capitalist, to join them. The firm—known as Alan Patricof Associates (or APA) and then Apax Partners—shifted its focus from advising to investing in start-ups just as the UK and Europe embarked on major economic reforms. In addition, the U.S. venture capital industry got a huge boost when a 1978 clarification in the Employee Retirement Income Security Act (ERISA) gave the green light to pension funds to invest in venture capital.
Guided by Cohen, who is regarded as the father of the European venture capital industry, Apax emerged as one of the world’s preeminent VC and private equity investment groups, raising or advising funds now totaling more than $20 billion. With offices in this country, Europe, Asia, and Israel, it has an international presence and a record of big hits that began in the 1980s with companies such as AOL and Apple and continues to this day with investments in industries as diverse as high tech and health care, financial services and retailing.
Cohen opted to step down a year ago as Apax’s chairman to devote all his time to trying to improve the lives of the disadvantaged in Britain and the Middle East. “When I graduated from Oxford, I was full of the idealism that was prevalent at universities in the 1960s,” he explains. “I got into venture capital and private equity largely because I thought I could help the economy by creating jobs and value.”
Cohen has more than just a passing knowledge of the economic conditions he is battling. Born in Cairo in 1945, the older son of a businessman whose family traced its roots to Syria, he grew up speaking French and Arabic. When the Egyptian government forced out all Jewish inhabitants after the Suez Crisis in 1956, the Cohens left with only one suitcase apiece. His mother’s British citizenship made it possible for them to immigrate to London, where they had to begin their lives anew.
As part of his effort to promote social investment and entrepreneurship, Cohen chairs Bridges Community Ventures, a community development venture fund he cofounded in 2002 to invest in businesses in England’s poorest areas. “By setting up operations in places where conventional wisdom says they can’t be built,” he observes, “we’re using entrepreneurship as a powerful weapon against poverty.” Three years ago, Cohen helped create and fund The Portland Trust to alleviate poverty and ease tensions in the Middle East through economic means. Working out of London, Tel Aviv, and Ramallah (in the Palestinian Territories), the Trust has developed a loan guarantee program for Palestinian banks that enables them to increase the size of the loans they make to small and medium-sized businesses.
“The views of businesspeople in the region tend to be more moderate,” notes Cohen, “so if we can help develop the Palestinian economy’s private sector—which accounts for two-thirds of the jobs—we will not only improve the standard of living but eventually contribute to the peace process. The tragic events of last summer in the region were a setback, but I went into this with a long-term outlook. What is most important is that people have something they want to preserve for the future. That’s what happened in Northern Ireland, and I think the Middle East will go down that path some day, too.”
Finally, Cohen heads a British government task force and charitable sector commission that recently issued a report recommending the creation of a “social investment bank” that would channel unclaimed assets in British banks and other financial institutions—an amount estimated to be about £500 million—into social enterprises. According to the groundbreaking report, “an effectively funded [social sector] could make a major contribution to regenerating our deprived communities, improving financial inclusion, and realizing the potential of our disadvantaged youth.”
Described by The Economist as “the compassionate capitalist,” Cohen is happy to say he’s not alone. “Just consider the donations Bill and Melinda Gates and Warren Buffett recently made to the Gates Foundation,” he says. “We’re seeing the beginning of an age of social entrepreneurship. Low levels of taxation, free markets, and the privatization of assets are great for business and the economy, but many people are being left behind. Those who have had a successful career are obligated to give something back to society.”