BOSTON – Although Peter Brooke hasn’t closed a deal since 1980, his presence continues to loom over the venture capital industry.
In a career that has spanned four and a half decades, Brooke has worked with young companies ever since he started in the credit department of the First National Bank of Boston in 1956. Now considered a VC pioneer of sorts, particularly when it comes to bringing venture capital to the rest of the world, this elder statesman is not content just resting on his laurels. He continues to think about where new venture capital markets are – India and Japan, if you’re curious – and the dangers inherent in today’s effervescent domestic venture capital market.
Brooke is loathe to accept credit for helping to shape the United States venture capital landscape. He will, however, admit to being one of a handful of market players who helped transform an investing oddity practiced by a few rich families into a booming asset class. International VC is a different story. “I have to admit…that we were starting something that was entirely new before globalization became a word,” he says.
Under Brooke’s tutelage, TA Associates Inc. established its first international affiliate in Europe in 1980, and the firm’s international business was spun off into Advent International in 1985. As for his motivation for taking VC global, it stems from Brooke’s belief that VC can be a tool for economic development, not simply a way to generate great returns.
“Way back when I was at the bank, I looked at venture capital as an economic development tool for the New England states,” Brooke says. “[And] I felt that way my whole life, not just about New England, but about Europe and Asia as well.”
Brooke modeled his drive to create a global VC industry on the Marshall Plan, which rebuilt European industry after it had been ravaged by World War II. The underlying theory was that VC can help transform the countries and people that it touches and make them full members of the global society. “You know, if people can learn to take care of themselves, then a wonderful thing happens,” he explains. “They develop a pride, they develop a sense of accomplishment, they develop a sense of what they can become. And I think that human dignity is very, very important in the development of anybody.”
As far as Brooke is concerned, there is still more to do on the international front. Japan should be revisited by VCs, he thinks, because of that country’s recent institutional and economic reforms (story, page 46). He also feels India is clearly place to be because of that country’s burgeoning technology industry (story, page 36). “I would think that the exciting thing about India now is that Indians have always been superb mathematicians, and their ability to accumulate software know-how, and then respond to new technological challenges, is amazing,” he notes.
The Internet Bubble
While the venture industry is booming today – thanks in large part to the information technology sector – Brooke thinks it may lead to trouble. “There is a lot of money being pumped into the Internet space, and we will find out when the bubble bursts what was too much.” he says. “As private equity investors, we all have to invest in the Internet right now, but we have to try and manage the risk for our clients. At the present moment so much money is just chasing dreams in the Internet.”
Indeed, Brooke worries that the wild valuations of Internet companies and the profits they generate for investors may end up undermining the asset class in a more fundamental way. “People are not approaching the industry now with what can I put into it, but what can I get out of it,” he says. In the long run, Brooke hopes that VC’s and entrepreneurs will take their capital and do some good with it by giving to charities and trying to improve society. “But a lot of them are into buying toys with the money they make … I guess I’m too much of a Yankee to go for that,” he notes, ruefully.
Having retired as chief executive of Advent in 1996, Brooke remains chairman of the firm, and an active one at that. When not on vacation or at his farm in Vermont, he visits the office and plots strategy regularly. The firm has raised $3.6 billion in capital to date and is actively investing several different funds in Europe, North America, Latin America and Asia. Advent has 17 offices in 16 countries, including two U.S. locations. While Brooke says he is currently catching his breath, he uses that next breath to declare, “but I do think there is something more to be done.”
And what of his status as a living legend of the venture industry? After all, he is a member of the Private Equity Hall of Fame and a 1999 recipient of the National Venture Capital Association’s Lifetime Achievement Award, as well as being named one of Boston’s 100 most influential business people of the 20th century by the Boston Business Journal. “I’m glad people think I have done okay,” he says.
Born: October 6, 1929, Worcester, Mass.
Education: A.B. Harvard College, 1952; M.B.A. Harvard Business School, 1954.
Career Path: First National Bank of Boston 1956-1961, Bessemer Securities Corp. 1961-1963, Tucker, Anthony & RL Day, 1963-1978, TA Associates Inc., 1968-1984, Advent International, 1985-present
Family: Anne, Wife and Children: Samuel, Peter, John
Favorite Book: Thunder at Twilight: Vienna, 1913-1914 by Frederic Morton
Currently Reading: Memoirs of Hadrian by Marguerite Yourcenar
Favorite Movie: Chariots of Fire
Favorite Travel Spot: Great Britain and Continental Europe
Most Admired Historical Figure: Winston Churchill
Investment Philosophy: Diversified among asset classes. 40% fixed income; 40% marketable securities; 20% private equity.