There are no foosball tables in the break room at RLJ Cos., or any of the other trappings found at some firms with young leaders. But executives under 40 swell the senior ranks at the investment firm in Bethesda..
Nearly all 14 businesses that comprise RLJ Cos. has some fresh-faced employee on its management team, especially those entities tied to financial services.
Young executives at RLJ, and at large in corporate America, are increasingly prized for their willingness to take risks and be innovative. These up-and-comers came of age in their careers amid economic uncertainty that some say has made them more fearless than their not-so-young counterparts.
“We have hired some of the best and the brightest. And, on many occasions, they are young, aggressive people who are looking to work for a company where they can add value,” said Chairman Robert L. Johnson, who has started numerous ventures under RLJ since selling Black Entertainment Television to Viacom in 2001 for $3 billion.
There is an “energy that they bring, an openness to new ideas, willingness to take risks and learn from them,” Johnson said.
That can be especially true in industries such as financial services, where a proven ability to make money has long been a key to advancement, said Rosabeth Moss Kanter, director of Harvard University’s Advanced Leadership Initiative.
“Financial services, especially the sales and deal sides, have always favored high-energy younger managers, who tend to get rich fast, burn out and retire young,” she said. “Whether they all can be called leaders in the sense of setting long-term direction, creating new strategy ... is another question altogether.”
Indeed, some wonder whether they have enough experience to navigate turns in the business cycle the way more seasoned professionals can.
Still, John Challenger, chief executive of the outplacement firm Challenger, Gray & Christmas, said he believes young professionals have a better chance of being groomed for the C-suite these days than prior to the downturn.
“The enormous amount of downsizing during the recession and in the aftermath wiped out a whole generation of people in finance,” he said. As the economy rebounds, more companies are “filling that void with a whole new generation and that’s helping them keep down cost and develop talent.”
That opportunity does not always flow equally. There remains a glaring disparity in the number of minorities represented in that new generation of leadership, said Mike Bush, president of The Minority Resource, a career coaching outfit.
“People basically hire people they know. So it’s still a long slog for most minorities to get ahead,” he said.
Johnson agrees that interpersonal relationships weigh heavily on hiring decisions in middle and senior management, leaving scores of talented minorities out in the cold.
“The wealth of this nation should be managed in the same way that the wealth of this nation is created. A lot of the money that comes into these big funds comes from the 401ks and mutual fund investments of minority employees,” he said. “The Harvard graduates that populate RLJ are the same kind of people that could be working at some of these big Wall Street firms and investment houses.”
Daphne J. Dufresne, 40 Managing director, RLJ Equity Partners
When Johnson interviewed Daphne Dufresne to head his newly formed private equity company in 2006, one thing stood out: her confidence.
“She said ‘I understand this private equity business, I know what it takes to raise money, find deals, evaluate and close deals.’ Daphne projected the confidence that I’m ready to take on the top role at a private equity firm ... and that impressed me,” Johnson said.
Dufresne walked through the doors of RLJ with a long list of credentials. Not only was she a former principal at multibillion-dollar private equity firm Western Presidio Capital, but also an associate director in the structured finance group at the Royal Bank of Scotland in Europe.
A career in finance, however, was not always on Dufresne’s agenda. She graduated from the University of Pennsylvania with a bachelor’s in engineering in 1994, but wanted to explore an interest in business and started out in consulting.
“I’ve always wanted to be an entrepreneur, run a business. And private equity was just a great industry to take a quasi step towards that ... You are taking an ownership stake in a company and thinking about its growth strategically,” she said.
The Harvard Business School graduate said she understands she has to continually prove herself to establish credibility.
Dufresne recalls a client at Western Presidio who constantly compared her to his college-aged daughter. Though the association was initially off-putting, she used it to ingratiate herself with the client.
“When his company was facing challenges, he felt comfortable calling me. I think he might have avoided making that call if he viewed me as this hard-charging person,” she said.
At RLJ Equity Partners, Dufresne oversees investments in five companies, including Fleishmann’s Vinegar in Cerritos, Calif., and tour operator CVC in Sao Paulo, Brazil.
T. Otey Smith, 35 Vice president, RLJ Equity Partners
After working as an analyst in the mergers and acquisitions Group at Goldman Sachs for two years straight out of college, T. Otey Smith was ready for a new challenge.
“Goldman let me figure out what I wanted to do with my life, which was to be in private equity. But I knew I wanted to work at a place where I could shape the environment, shape the culture,” he said.
So Smith high-tailed it to Chicago to become a founding member of Reliant Equity Investors, a middle market private equity fund with $120 million of assets under management today. There, he helped raise capital and engineer transactions for two years as a senior associate before heading to Harvard Business School.
When Smith graduated in 2006, his former boss at Reliant recommended he reach out to Daphne Dufresne, who had just signed on at RLJ Equity Partners. They hit it off and she brought him on as one of the first three people at the company.
“You can’t underestimate how important it is to maintain relationships in this business. They take a long time to build, but, if nurtured, can help you along the way,” he said.
Trevoir Gregg, 38 Managing partner, RLJ Credit Opportunity Fund
Trevoir Gregg will tell you that his ascent to the upper echelon of asset management was a matter of “luck defined by preparation meeting opportunity.”
Right out of Morehouse College in 1995, Gregg landed a job as a credit analyst at TD Securities where he provided project financing for utility companies until moving on to handle acquisition funding at SG Cowen Securities two years later.
Gregg took time off in 2000 to complete an MBA at Harvard University, then jumped to General Electric Capital, where he underwrote nearly $2 billion in loans during his two-year stint.
He went on to become a founding member of Carlyle Mezzanine Partners, a $436 million fund at the D.C. buyout firm targeting middle-market companies. Gregg, then 30 years old, was one of the youngest team members. There were some clients that looked at him askance.
“As much as people will look for certain attributes that they believe denote success or quality, ultimately everybody can see how much money you took in, how well you managed it and how much value you delivered to your investors,” he said. “If you have a consistent track record, ultimately that trumps age, ethnicity and everything else.”
After three years at Carlyle, Gregg moved on to becoming a principal at Allied Capital. When the company was sold in 2010, he was ready to “be the lead portfolio manager and directly develop a track record, really be seen as the point person, putting together a portfolio and standing behind the returns of that portfolio.”
And Johnson offered him the chance to do just that as a co-founder of RLJ Credit Opportunity Fund, a division that provides financing to middle-market companies.
Jesse Burwell, 35 Vice president of investorservices, RLJ Cos.
Throughout his 20s, Jesse Burwell seized one opportunity after another to further his career in accounting. There was a stint at Deloitte & Touche as a senior auditor, time at Wachovia Securities as an analyst in the loan syndications group. And by the time Burwell reached 29, he was comfortably employed as a senior accountant at one of the largest private equity firms in the country, the Carlyle Group.
But he wanted to explore other facets of finance. It just so happened that one of his former colleagues at Carlyle, Ernita Thomas, had just taken on the role of controller at RLJ Cos. and was hiring.
“Jesse is a diligent and responsible worker. I noted these characteristics about him when we worked briefly together on a project while at the Carlyle Group,” Thomas said. “This is what encouraged me to reach out to bring him over to RLJ.”
Burwell was intrigued by the chance to be a part of a new venture. “Being in on the ground floor has allowed me to progress a little bit faster than I would have at a traditional firm that had been around for 30 or 40 years,” he said. “I’ve been able to do things outside of my discipline and gain some good experience.”
Corey Printup, 30 Vice president, RLJ Fixed Income
Corey Printup was a 24-year-old investment banker in 2006 when Johnson plucked him from Morgan Stanley to work at RLJ Private Equity. At the time, he had arranged or managed more than $17 billion in securities at the global giant.
Printup was drawn to Johnson’s aim of “putting together young minority talent to have a ground-up opportunity at a private equity fund.”
At an age when most of his peers were holding onto the lower rungs of the corporate ladder, Printup was leading the creation of a $30 million enterprise fund to finance businesses in Liberia. He traveled back and forth to the West African country for five years during which time he oversaw the development of luxury lodging RLJ Kendeja Resort & Villas.
After the project was up and running, Printup was tasked with taking charge of RLJ Fixed Income in January. The start-up focuses on fixed-income investments — whereby the maturity and interest payments are fixed —within government, corporate, federal agency and municipal bond markets.
“Goldman Sachs or Morgan Stanley will give you a solid foundation. At those type of shops your ideas will be heard, but you’re not going to have anything from the execution standpoint,” he said. “Where here, not only can you generate the ideas, but you’re also going to be given the leeway to execute them.”