Why you should care
Because Virginie Morgon helped a French equity giant go global.
When Virginie Morgon began talking to a U.S. rival about a potential deal, there was much at stake. Morgon had been charged in 2015 with leading one of France’s largest private equity groups, Eurazeo, into the U.S. and was hoping to team up with established names.
A deal with another private equity firm, Rhône Group, failed to materialize. But Eurazeo pressed on with the U.S. strategy, and Morgon, then deputy chief executive, moved to New York in September 2016 to open an office. She was returning to the city where she began her career as an investment banker in the early 1990s.
Eurazeo is now firmly established in the U.S., and Morgon, 48, has spent the past 18 months building its brand and expanding its network. Under her leadership, Eurazeo has hired 10 people in New York, made two U.S. investments and in November finally bought a 30 percent stake in Rhône. It is Eurazeo’s most ambitious international project to date. In two months, Morgon will be rewarded when she takes the helm as chief executive.
“The important thing is to have the courage not to abandon big projects because of fear and opposition,” she says.
What drives me crazy in an organization is the mentality that things have always been done in a particular way and so that must continue.
Ambitious and dynamic, this direct manner is typical of Morgon, whose leather pants, colorful clothes and funky jewelry make her stand out from the sea of dark suits in finance. And she is a vocal proponent of bringing up women behind her, as a founding member of the global Women’s Forum for the Economy and Society.
“I’m super demanding, hopefully in an energetic way,” she says. “What drives me crazy in an organization is the mentality that things have always been done in a particular way and so that must continue. This is typically what I’m fighting against.”
Cracking the U.S. is crucial to the next stage in Eurazeo’s development as the company, which invests in mid-cap companies and has just under 8 billion euros in assets under management, tries to accelerate growth, increase scale and compete with global rivals. Morgon is leading exclusive negotiations for Eurazeo to acquire a controlling stake in Idinvest, a French private equity manager with 8 billion euros under management, that would add venture capital to Eurazeo’s stable of investment strategies and boost its standing in a market dominated by U.S. investors.
Eurazeo may be internationalizing, but its roots are distinctly French. Its historical anchor shareholder is the aristocratic David-Weill family, one of the key shareholders in Lazard investment bank. Before joining Eurazeo, Morgon spent 16 years at Lazard in New York, London and Paris.
The internationalization of Eurazeo began in 2011, when Morgon found its first investment outside France: Moncler, an Italian luxury apparel group. Eurazeo bought a 45 percent stake, seeing the potential to expand Moncler with stores in China and the U.S., and online. Eurazeo still owns just under 5 percent of Moncler and in its most recent share sale made 188 million euros — 6.7 times its original investment.
Three questions for Virginie Morgon
- Who is your leadership hero?
Ken Roth at Human Rights Watch is a real role model in terms of commitment, focus and dignity. [Morgon is co-chair of the Paris committee.] It is an inspiration to work with him, because he has shown all of us the importance of seeking the truth at a time when so much of the news is discredited.
- If you were not a CEO, what would you be?
My father was a doctor and surgeon. As an ear specialist, he was passionate about giving deaf kids the ability to hear and to talk, as well as being amazingly knowledgeable about history and religion. He was a huge inspiration to me, and I could easily have chosen to pursue a career in medicine.
- What was the first leadership lesson you learned?
As a young banker in Paris, I saw very early how fragile a career can be, and how some executives will therefore allow themselves to be humiliated because they feel they have to tolerate unacceptable behavior from their superiors. That insight showed me how important it is as a leader to stay true to your own values and ethics.
After venturing outside France, Eurazeo opened a small office in Shanghai in 2013, and another in São Paulo in 2015, to support the growth of its portfolio companies in China and Brazil. Then it turned its attention to the U.S. After the deal with Rhône initially failed, Morgon and two managing directors went to open the New York office, rather than hiring locally. She explains: “When you send your deputy chief executive, you are sending a very strong signal that this is very serious; you’re highly committed.”
Morgon was also concerned that globally, Eurazeo’s capital should be allocated to the best investment — regardless of whether it was in the U.S. or Europe. “One thing we did pretty right is that it’s one team, one alignment of interest, one pool of money and one investment committee covering both the U.S. and Europe,” she says.
Eurazeo has made two investments in the U.S. so far: It paid $226 million for a 50 percent equity stake in Dominion Web Solutions, an online classifieds marketplace and marketing software provider, and WorldStrides, one of the largest experiential education providers in the world. The terms of the WorldStrides deal were not disclosed.
The decision to send a senior team to the U.S. came after Eurazeo’s unsuccessful foray into Italy, shortly before Morgon joined the group. In 2007 Eurazeo acquired a 20 percent stake in the Italian boutique investment bank Banca Leonardo, and hired a team of local corporate financiers to run the operation. Three years later, Banca Leonardo pulled out of private equity investments and Eurazeo said it would stop making investments through Euraleo, the Italian subsidiary it co-launched with the bank.
What went wrong? Morgon says: “Timing. Banca Leonardo decided to concentrate on advisory and wealth management, and at the same time the financial crisis [was] happening and you [had] to give your trust to a team that you only recently hired.”
Morgon says it was hard to find qualified women for positions in the U.S. office, particularly for openings at the senior level. “I wanted a completely gender-balanced team, because if you don’t do it when you start a team from scratch you never do it. It was more challenging than I was expecting.”
Ninety percent of applicants were men, so Morgon sought out potential female hires and eventually achieved gender balance in the U.S. But in Paris, Eurazeo is still male-dominated, so she plans to hire more women and add more women to the executive committee. As one of the most senior women in private equity in the world and a parent to four children, Morgon is aware that her own position at Eurazeo “has been critical in being able to convince women to join an organization where [they] would be welcomed.”
Her priorities as chief executive are managing Eurazeo’s growing number of teams, and dealing with investors and shareholders. She sees the Rhône tie-up as key to Eurazeo’s international future.
So why did the deal work out the second time? “The fact that we have been in the U.S. for 16 months now means that we have a better understanding of the market,” says Morgon. “We have demonstrated to ourselves first and also to the outside market that we can be relevant.”
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