Roberts Crosses Sides, Becomes AEA Managing Director –

ncarolina NEW YORK – Pierce “Jack ” Roberts, who left his post as head of the telecommunications group at Bear, Stearns & Co. a little more than a year ago, has resurfaced at one of Wall Street’s oldest private equity firms, AEA Investors.

Roberts, formerly a Bear Stearns senior managing director and one of the firm’s top telecom bankers, recently joined the leveraged buyout shop as a managing director, an AEA employee confirmed. Roberts did not return calls seeking comment.

Sources familiar with the matter said Roberts will continue to focus on the telecom sector in his new position as a private equity investor. Presently, there are about 25 buyout or venture capital firms that specialize in telecom investments, according to industry sources.

“Telecom companies are viewed as good investments for private equity firms,” one LBO general partner noted. “Even though they consume a lot of money, and don’t generate the same kinds of returns as some of the Internet companies – like eBay – there are relatively fewer crash and burns.”

Telecommunications Slant

Recently, the telecom industry has captured the attention of even the generalist buyout firms. For example, Kohlberg Kravis Roberts & Co., recently invested in competitive local-exchange carrier Birch Telecom Inc. KKR already has plowed $60 million into Birch Telecom, and it could add another $50 million in the next several months. Other private equity firms that have dabbled in telecom-related concerns include The Blackstone Group, Texas Pacific Group, Welsh, Carson, Anderson & Stowe and Hicks, Muse, Tate & Furst Inc.

For AEA, a buyout firm founded in 1969 by chief executives of major corporations and wealthy individuals from both the United States and Europe, telecom represents uncharted waters. Although AEA is a traditional buyout shop that specializes in takeover opportunities, in recent years it has expanded its strategy to include growth investments. Some of AEA’s noteworthy deals include investments in Tanning Technology Corp., a systems integration company, and mapmaker Rand McNally & Co.

As head of telecom at Bear Stearns, Roberts built and oversaw what has become one of the most prolific industry groups at the firm. While at Bear Stearns, the investment bank advised on several landmark telecom deals including Nynex Corp.’s merger with Bell Atlantic Corp., GTE’s attempted run at MCI Communications Corp. and Bell Atlantic’s combination with GTE.

Joining the Other Side

Like several of his peers in the merchant banking world, Roberts has a business resume that reflects his entrepreneurialism, financial acumen and industry experience. Before joining Bear Stearns in 1993, Roberts spent two years at New York advisory and investment firm Blackstone. Previously he had been the vice president for corporate development at Bell South Corp., after having run his own advisory firm, The Franklin Group.

Roberts is not the first investment banker AEA has lured to the other side of dealmaking. Earlier this year, the firm hired John Garcia, Credit Suisse First Boston’s head of European leveraged finance, and Martin Murrer, a senior banker covering buyout firms at Donaldson, Lufkin & Jenrette.