Ex-Viacom chief to advise bank; Window on Wall Street
International New York Times
By Michael J. de la Merced
January 27, 2015
The merchant banking firm that helped sell the Los Angeles Clippers and invested in Vice Media has brought on one of its longtime friends to help it find opportunities for its newest investment fund.
The firm, the Raine Group, planned to announce on Monday that it had hired Tom Freston, the former chief executive of Viacom, as a senior adviser.
The appointment of Mr. Freston comes as the firm has closed on its second investment fund dedicated to fast-growing businesses at $850 million, exceeding its initial fund-raising goal by $100 million.
Both moves highlight the continued growth of Raine over its six years. Founded by two longtime media bankers, Joseph Ravitch and Jeffrey Sine, the firm has gained prominence as a specialist in technology and media transactions — as both an adviser and an investor.
Though perhaps better known for its role advising Steven Ballmer on his purchase of the Clippers and the Japanese telecom giant SoftBank on its acquisition of Sprint, Raine’s investment arm has also taken stakes in the likes of Zumba Fitness and Jimmy Buffett’s Margaritaville.
Unlike many other firms, Raine does not divide its roughly 60-person employee roster strictly between the banking and investment sides of the house, according to Brandon Gardner, the firm’s president and chief operating officer.
In the case of investments, that means finding opportunities in digital media, sports and live entertainment, where the firm can bring its extensive experience to help start-ups grow. The company generally invests about $40 million to $80 million at a time.
‘‘Each person has lived and breathed T.M.T. all his life,’’ Mr. Gardner said in an interview, referring to the technology, media and telecom sectors. ‘‘There are very few firms that go as deep as we go.’’
Besides the growth funds, Raine also runs a small hedge fund that manages about $120 million in assets and a venture capital fund that closed its first fund in August at about $80 million.
But as it moves onto its second growth-equity fund, the firm is turning to its friend to help it identify new opportunities. It was Mr. Freston who helped the firm become an investor in Vice, having become familiar with the provocative media company during his tenure atop Viacom.
And it is that sort of relationship that Raine is hoping to harvest by making the veteran media industry executive a senior adviser, joining the likes of Richard Rosenblatt, a co-founder of Demand Media, and Steve Bornstein, the former chief executive of the NFL Network.
Such advisers are meant to find new opportunities and assist Raine’s portfolio companies.
‘‘We’ve known Tom for a long time,’’ Mr. Gardner said. ‘‘He is one of the most well-connected and respected visionaries in the media world, and has been tremendously helpful to us as a firm.’’
Mr. Freston added in a statement: ‘‘I’m no stranger to Raine and have watched them close up build a great and interesting portfolio of companies as well as a deep and very effective network of contacts. They’re a first-rate team and I’m thrilled to take on a more involved role with them.’’