As a biomedical engineering major at the University of Pennsylvania, Daphne Dufresne spent her summers as an intern at Pfizer. Outwardly, it could probably be assumed that she might have had designs on becoming a real-life Meredith Grey. Upon graduation, however, Dufresne made what could be considered an impulsive decision to get into finance. “I knew it was sexy,” she says, “but I really didn’t have any idea what [investment bankers] did at the time.”
Occasionally, the best decisions are made on impulse. Dufresne, who deserves credit for being a quick study, has already ascended to the top of her industry, and at the age of just 35, she runs the private equity arm of RLJ Companies, Robert Johnson’s acclaimed 2006 entree into alternative assets.
Johnson, of course, is the billionaire entrepreneur best known for launching Black Entertainment Television. Since hitting it big on BET, he has since launched or bought businesses ranging from an NBA basketball team to an education finance company. But, two years ago, when he announced his retirement from Viacom (BET’s owner), Johnson began his march onto Wall Street. He first targeted real estate and from there branched into asset management, launching a multistrategy hedge fund-of-funds with Deutsche Bank Asset Management. And when he made the move into private equity, partnering with The Carlyle Group to do so, his handpicked leader to run the initiative was Dufresne.
When Johnson first reached out to Dufresne, he veiled his approach as an appeal for guidance. “He wanted to pick my brain about the asset class, and wanted some help generating names,” she says.
Dufresne, meanwhile, had just started working at Parish Capital, spearheading the firm’s co-investment activity. She was not looking to leave. “I really thought of Parish as a place where I’d end my career. It’s a great organization with a great team, and it was extremely difficult to leave. I had only been there for about nine months,” she says.
But Robert Johnson wouldn’t be Robert Johnson if he couldn’t sell someone on an idea. And Dufresne, a native of Brooklyn, NY, was attracted to the challenge of building a firm from the ground up.
Amassing a track record
Dufresne’s ascent, while quicker than most in the PE business, has contained many of the usual stops on the LBO career path. After school, Dufresne put in the prerequisite two years at a consultancy, Anderson Strategy Group, before going to Harvard to get her MBA. She graduated from HBS in 1997, and got a job in Europe working for the Royal Bank of Scotland’s structured finance group. It was at this point, Dufresne says, that she “got the bug” for private equity.
“It was exciting, and after just a few deals, I knew that I ultimately wanted to be in this business,” she says.
To get on the GP side of dealmaking, Dufresne moved back to Boston, where she joined Weston Presidio Partners through the Kauffmann Fellowship program, working under firm co-founder Michael Cronin. The Kauffman program normally lasts two years, during which time the fellows take on what is basically an apprentice role. Within six months, though, Dufresne was offered a permanent position.
She stayed at the Boston firm for roughly five years, and during that stretch, even spent some time as a dealmaker on behalf of the state government. She was appointed by then-Massachusetts Governor Mitt Romney to the board of Trustees of the Economic Stabilization Trust, where she helped oversee the extension of government-backed, high-risk loans to in-state companies.
Following her stint at Weston Presidio, Dufresne had her layover at Parish, before packing up again and moving to Maryland to work at RLJ.
Starting from Scratch
It’s been over a year since Dufresne arrived at RLJ. The staff, which includes managing director and Carlyle alum Rufus Rivers, now has five members, and the firm is still in the process of raising its debut fund, reportedly seeking around $300 million.
While Dufresne has dedicated a great deal of time building the business, the past year of her life has also brought significant changes on the home-front. In 2006, Dufresne became pregnant with twins, and earlier this year gave birth to a boy and a girl, Joseph Leonard, named after her husband, and Dessaline, whose name reflects Dufresne’s Haitian heritage. She took the customary three month maternity leave, but even with twins, managed to stay abreast of her duties at RLJ. (Within nine days of giving birth, Dufresne was back in the office to attend a meeting.)
The next step for Dufresne is start building out RLJ’s dealflow. For that, she notes, it’s helpful to have Robert Johnson around. “We’ve really been able to see a lot of proprietary opportunities, which is really difficult these days in private equity,” Dufresne says. “Bob is a deal magnet, so we get a lot of first calls on things.”
But Johnson’s role goes beyond branding at the firm. He often spends between three to four days a week in the RLJ offices, and according to Dufresne takes a “hands on” approach. “He’s obviously helpful on the operational side, but at the same time, he’s got so many relationships, that he can always make a phone call or get on a plane to help win a deal or develop a customer relationship.”
While the firm has yet to ink any deals, Dufresne expects to have one transaction under LOI within the next couple of weeks. The firm’s investment palate, according to its Web site, targets deals in a variety of industries, which would seem to reflect Johnson’s past experience. The fund will invest in financial services, real estate, hospitality, professional sports, film production and the recording industries. Reflecting Dufresne’s past, meanwhile, RJL is looking for small- to mid-market deals with a compelling growth story.
While Dufresne has said it before, she is anticipating that this latest role could be her last. “Private equity is one of those fields that you want to get into a good partnership and ideally stay there forever,” she says. “One of the things that attracted me to RLJ was the chance to build this business up and help create something from the very beginning…The hope is that this will be the last job I have.”
The Resume Born: Brooklyn, NY First Job: Shoe sales (age 12) Undergrad: University of Pennsylvania MBA: Harvard Business School Role Model: Mother. “She got up early and came home late, and always made sure my sister and I were taken care of.” Last Book: Power Plays: Shakespeare’s Lessons in Leadership and Management, by John Whitney and Tina Packer Last CD: Putumayo – World Music for kids Favorite Sports Team: Baltimore Ravens Vacation Spot: Miami Community Service: Springboard (annual showcase of women-owned businesses for the VC and PE community); Junior Achievement (non-profit program that teaches students about entrepreneurship, work readiness and financial literacy). Boards: Advisory Board of Arthur Rock Center for Entrepreneurship; Center for Venture Education (sponsor of the Kauffman Fellows Program).