Regional Private Equity and Venture Funds
Staking a Claim in International Arbitration
Manny Medina & Alberto Ibargüen Invest in Miami’s Future JUNE/JULY 2014 • executivesouthflorida.com
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FEATURES 42 Knight in Shining Armor By Millie Acebal Rousseau Is Miami poised to be the next Silicon Valley? The critics are skeptical but the Knight Foundation is banking on it.
50 Scaling Up By Mike Seemuth Endeavor Global is a unique addition to Miami’s entrepreneurial ecosystem.
58 Eye on the Past, Vision for the Future By Jeff Zbar Manuel Medina is working to cement South Florida’s reputation as a tech hub.
64 Legal Stronghold By Mike Seemuth Miami has emerged as a leading center of international arbitration.
72 The Three Billion Dollar Man By Laura L. Myers Sergio Gonzalez and his team are changing the art of fundraising.
80 Fresh Capital By Richard Westlund A look at some of the area’s private equity and venture capital firms.
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JUNE/JULY 2014 Volume 1 Number 2 PRESIDENT & PUBLISHER Ron Mann firstname.lastname@example.org T 305.712.7978
EDITOR Sara Fiedelholtz email@example.com T 305.712.7981
DEPARTMENTS 13 INDUSTRY FACES
92 EXECUTIVE CLUB
The newsmakers, game changers, and innovators who are driving business in the region
35 BUSINESS OF POLITICS
Capturing the area’s events, activities, and happenings
PRODUCTION MANAGER Mariu Saralegui CONTRIBUTING WRITERS David Lyons Laura Meyers Milagros Rousseau Mike Seemuth Richard Westlund Jeff Zbar CONTRIBUTING PHOTOGRAPHERS Gio Alma Beatriz Alvarez Stephen Boxall Jorge Parra Donna Victor Isaac Zapata
96 AT C-LEVEL
Where business and politics intersect
ART DIRECTOR Lourdes Guerra
A view from the top
39 THE EDGE Who has the competitive advantage, and how did they get it
OFFICE MANAGER Liudmila Leonova COVER Photo: Gio Alma/gioalma.com ©2014 Executive South Florida magazine is published 12 times per year by South Florida Executive LLC, 536 Biltmore Way, Second Floor, Coral Gables, FL 33134. All rights reserved. The entire content of EXECUTIVE South Florida may not be reproduced without the express written consent of the publisher. EXECUTIVE South Florida accepts no responsibility for the return of unsolicited manuscripts and/or photographs, and assumes no liability for products and services advertised herein. EXECUTIVE South Florida reserves the right to edit, rewrite, or refuse material.
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FROM THE PUBLISHER
Regional Private Equity and Venture Funds
Staking a Claim in International Arbitration
Manny Medina & Alberto Ibargüen Invest in Miami’s Future JUNE/JULY 2014 • executivesouthflorida.com
lberto Ibargüen and Manny Medina both have had enviable careers, but now they are using their considerable influence to set the stage for Miami’s technology evolution. Where Miami has been best known for its hyper real estate and tourism industries, the region is now being touted as fertile ground for growth in the technology sector, especially in relation to international companies wanting to get a foothold in the US. This is one of the reasons Endeavor Global—a worldwide economic development organization chose Miami over several other cities to launch its US initiative; and it is precisely this type of commitment that makes our region one of the brightest for investment and entrepreneurs. Our profiles on some of the area’s top private equity firms also touches on this point, but with a much broader view. South Florida has always had its fair share of investment firms based in the region, but with the increase of high-net worth international investors and a favorable tax rate for state residences, these numbers are going to continue to increase. And speaking of investment, the University of Miami’s Momentum2 fundraising campaign demonstrates the power of building relationships. Launched in 2012 with a goal of $1.6 billion, the university has already raised $1.3 billion, and it is likely to reach its goal ahead of schedule. Sergio Gonzalez and his team have redefined the art of fundraising by strengthening the University’s ties to the business community and connecting to its 160,000 plus alumni. Our region is no longer reliant on a few industry sectors or major corporations to fuel the local economy. Take a look at the extensive features and profiles in this issue and you will see a cross section of local entrepreneurs, business leaders, and new and exciting firms. Those featured only represent a small fraction of what our business community is all about, but show we have a lot to look forward to.
Ron Mann 10 EXECUTIVE SOUTH FLORIDA
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President, Pointe Group Advisors After joining the property management firm Pointe Group, Holly has built up its commercial real estate brokerage operation. And considering Miamiâ€™s current real estate market, he is definitely on point with his efforts. JUNE/JULY 2014
INDUSTRY FACES COMMERCIAL REAL ESTATE
illiam Holly may just be one of the nicest guys in commercial real estate. Whether you run into him in a building he has been charged with leasing, or simply around town, Holly always has a big smile and is never too busy to stop and chat. He would easily scoop up the congeniality award if there were such an accolade for top
EXECUTIVE SOUTH FLORIDA
brokers. But instead, his peers have recognized him for his business acumen and awarded the President of Pointe Group Advisors the 2014 Leasing Agent of the Year Award from the Building Owners and Managers Association of Miami-Dade. He was also awarded the 2014 Office Sale of the Year Award at the National Association of Industrial and Office Properties South Florida’s Awards of Excellence.
“It means more to me at this point in my career than it would have earlier because both awards were awarded by my peers in the commercial real estate industry,” said Holly. “It is a recognition, not only that you had a great year, but that you are a true professional.” Holly is a true and veteran professional. He has worked in the field for more than 20 years and says the keys to his success have been a wonderful role model in his mother Herta Holly (the current Mayor of Miami Shores), hard work, having great mentors and the support of a great team, creativity, and a bit of luck when it comes to market timing. “Some of the best projects I have ever done have not been as financially successful as other projects due to a change in the overall market,” he said. “We are all subject to market timing.” With Miami’s real estate market firing on all cylinders, Holly is now its beneficiary. He has been on point since joining Pointe Group Advisors in October 2012. Holly came on board to create a first-class brokerage operation to complement the firms’ property management business. When he started, Pointe Group had no Miami-Dade properties in its brokerage portfolio. In just two years, things have changed. “On the leasing side, we currently have seven high rise office towers that we represent in Miami,” said Holly. “In addition, our investment sales presence has grown with approximately $100 million in active listings.” Being able to rapidly grow the business, Holly said, was the result of the experience accrued during his many years in the industry. “Everyone believes in the overnight success story. But in reality, last year’s success was preceded by 21 years of hard work in the commercial real estate business,” he said. Through the ups and downs of the cyclical real estate market, Holly has stayed strong. When he led Holly Real Estate he became the first developer in Miami to complete a LEED Certified office building, Miami Green, from the ground up. Like many developers in South Florida, with the last market downturn he lost the building. Now at Pointe Group, Holly is responsible for leasing space in the building and has been proudly inking deals for tenants to enjoy his green innovation. That’s the thing about Holly, he is always innovating. “When you do things that are the first in your industry locally, I think that creates recognition nationally,” said Holly. “Every day I try to innovate, I’m trying to do something that hasn’t been done before.” E
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INDUSTRY FACES MANUFACTURING
Photos by Donna Victor
f you have been to an upscale event in South Florida, chances are you have mingled with the in-crowd in one of Eventstar’s temporary structures. Using innovative design and technology, Eventstar Structures transforms vast open spaces into one-of-a-kind venues. But it’s not all about the grand events, the firm has also been on hand to provide vital facilities in the aftermath of some devastating disasters. CEO and co-founder Alain Perez, said after Hurricane Katrina the company was called on to offer large scale shelters with sleeping, dining, and showering facilities. After Hurricane Ike wreaked havoc on the Turks and Caicos, Eventstar had over five plane loads of equipment on the ground in 24 hours, and eventually erected enough structures to house 8,000 people. These structures, he said, were turnkey-ready with air conditioning, bedding, dining, and bathroom facilities. Following the Haiti earthquake, the company was on the ground within 72 hours erecting largescale medical structures. Eventstar’s headquarters in Miami holds shipping containers full of materials for emergency structures should they be required at a moment’s notice. Also on site, Perez said, is enough aluminum and steel for 2.5 million square feet of temporary structure. The company manufactures and fabricates its own product on site, and with its addition of automated machinery and refined quality assurance program, it has the ability to process well over 20,000 square feet of material a week. Perez co-founded the company in 1997 with his sister, Belkys Perez, and colleague, Jose Gonzalez. Belkys Perez and Gonzalez serve as CFO and COO respectively. Before Eventstar, Perez had a part time job at a local tent company. This, he said, is what sparked his interest in the industry. He was also inspired by the work ethic and ingenuity of his father, Ignacio Perez, who was responsible for many innovations and inventions that are still used in the industry. After his stint at the tent company, Perez began working with his father and sister at Fortrex, the precursor to Eventstar.
CEO/Co-Founder, Eventstar Structures
“I believe that the mindset we have at Evenstar of ‘pushing the limits’ is a reflection of the philosophy that my father imparted on Belkys, myself, as well as the company,” said Perez. The original team of three—Perez, Belkys Perez, and Gonzalez—has grown to about 100 in Miami, and Eventstar now produces structures for use throughout the US, Europe, and the Caribbean. “You can have an event, activity or exhibition indoors anywhere in the world. Our business is to take it outdoors, and to build a signature structure for the event,” said Perez. In the automotive industry, they have worked on projects for Volkswagen, BMW, and Audi. Perez counted the award-winning, 42,000-square-foot, multi–level structure Eventstar built for the launch of the Audi A8 in Miami Beach a few years ago among his favorites. Also topping his list of favorite projects is the Space Shuttle Pavilion at The Intrepid Sea, Air & Space Museum in New York. The pavilion is the home of NASA’s Space Shuttle Enterprise, the prototype used during the Space
Shuttle era. After Hurricane Sandy blew away the original structure, Eventstar’s team codesigned, manufactured, and erected the new structure at lightning speed. In some instances, he said, the construction crew was assembling the building just two feet away from the shuttle. “We are very proud of that structure, and we are actually a co-sponsor of it now,” he said. Eventstar’s products are a staple at events including: the Kentucky Derby, the Super Bowl, Art Basel Miami, and the America’s Cup. Eventstar has been the recipient of the IFAI International Achievement Award for six consecutive years, among other industry accolades. By having control of both the design and fabrication process, it is able to provide clients with innovative products. No matter how big the project and no matter where in the world, operations in Miami are always full-steam ahead. “Business doesn’t stop because of one huge event. We are always thinking about what’s next, and how we can develop the next big breakthrough in the industry,” said Perez. E JUNE/JULY 2014
INDUSTRY FACES CONSTRUCTION
uillermo Fernandez knows the definition of tough, not only when it comes to catching the big one, but also how hard it was for Latin American-owned companies to obtain large construction contracts in the early 1970s. Thus, a group of Latin American builders, developers, plumbers, engineers, and contractors got together in 1971 and formed the Latin Builders Association (LBA). As the Association’s new president, Fernandez, 43, explained that LBA is no longer just for Latin Americans, “You don’t have to be Latino to join. The meetings are in English.” The Association currently has 700 companies as members. Fernandez, was born and raised in Miami by parents, who came from Cuba in 1965. He started his construction career when he was 13, working summers with his uncle in residential construction. “Back in the 1980s I had many relatives from Cuba who worked construction and I would go to work with them. It really is how I got into the business,” said Fernandez. In 2001, Fernandez and his partner Miguel Cerra opened their own construction company, Link. “We each had $500 to start and we worked on houses and little by little we got bigger jobs and projects,” he said. In both 2012 and 2013, Link has had over $100 million in revenue. Some of its previous projects included the Miami Herald’s new headquarters and the Hialeah Park Casino; Link is currently working on a central distribution center for Baptist and an affordable housing project in Liberty City on 7th Avenue. Because Fernandez came from a low-income family and his parents worked factory and odd jobs to ensure he and his sister received a good education, Fernandez is particularly proud of the LBA Construction & Business Management Academy Charter High School. Started in 2012, the Academy is the first business charter high school started by a business association in the US. “It was important to have this kind of school. We need to give students the tools they wouldn’t otherwise be able to get. It is essential to educate the future workforce,” said Fernandez. E
Photo by Jorge Parra
President Latin Builders Association
INDUSTRY FACES HOSPITALITY
STEVEN PERRICONE Owner, Perricone’s Marketplace & Cafe
EXECUTIVE SOUTH FLORIDA
Photo by Donna Victor
t was written in the stars that shine down upon his popular Brickell restaurant that Steven Perricone would be a hospitable guy. His grandmother and mother, Jennie and Genevieve, were dedicated to serving others. They lived to take care of people, and being of Italian descent, food was a focal point for the family. This gene did not skip Perricone, owner of Perricone’s Marketplace & Café. The most rewarding part of his business, he said, is taking care of guests. “I like to think of my restaurant as more of a neighborhood kind of restaurant where you are recognized, appreciated, doted on and taken care of,” said Perricone. “Here we have a never say no attitude,” he said, “It’s hospitality, it’s what hospitality is supposed to be.” The menu has evolved over the restaurant’s 18 years but some original items remain, including Grandma Jennie’s meat lasagna. When Perricone tries to take something off the largely Italian-influenced menu there is sometimes an uproar. Great steaks and Asian inspired dishes are featured, and he has taken into consideration the health conscious diner with fresh fish and salads. “I tried to make this the kind of place you could come and eat several times a week and always find something different.” The wildly popular Perricone’s Marketplace & Café was not his first venture into the hospitality industry. In the 1970s, Perricone served as the social chairman for his New York high school and ran activities and dances. By the time he graduated, he was working as a disco party promoter and wound up renting the unused space of a restaurant in the Hamptons. There, his parties attracted 200 to 300 people on Friday and Saturday nights. He eventually
BELOW: Baked Brie en Croute, whole baked brie wrapped in crispy puff pastry and drizzled with warm apricot glaze.
Photos by Lynn Parks
ABOVE: Mediterranean mussels poached in white wine, diced tomatoes, fresh basil & garlic drizzled with extra virgin olive oil
took over the restaurant space and ran nightclub La Plage (the beach in French) for eleven years. Perricone also had interest in two New York restaurants but when the stock market crashed in 1987, he headed to the Bahamas to help start a paper converting company. But it didn’t take him long to find his way back to hospitality. “Of course I found a nightclub that was closed,” he said. He owned and operated the Nassau nightclub The Ritz until he moved to South Florida in 1990. He opened a gourmet market and café on South Beach, but said the beach was seasonal and he wanted year-round business. He leased an old home in Brickell, 15 SE 10th Street, with an option to buy the land. When renovations started, the roof collapsed, and that’s when he went to Vermont barn hunting with the intent of bringing some old-world charm to Brickell. He purchased a barn, built circa 1700, and had the wood trucked down to Miami and incorporated it in to the Perricone’s building. Perricone ended up buying the Brickell land. Aside from his restaurant, Perricone is also a partner with Michelle Bernstein in Michy’s restaurant and he continues to invest in real estate. Of the current market in South Florida he said, “It’s quite spectacular what’s going on.” Indeed. Since Perricone’s opened in 1996, Brickell has transformed, with an abundance of commercial and residential development. “The area has certainly grown up around us,” he said. E
BELOW: Perricone’s Marketplace
INDUSTRY FACES NON-PROFIT
EXECUTIVE SOUTH FLORIDA
Chairman, National Parkinson Foundation
hen the proposition first arose, prominent Coral Gables attorney John Kozyak was uncertain that he wanted to become the chairman of the National Parkinson Foundation (NPF). He had served as managing partner of the Miami area law firm he co-founded, Kozyak Tropin & Throckmorton, advised large companies, served as the lead lawyer for damage claimants in a national asbestos case, and served as trustee and criminal restitution receiver in a viatical fraud Ponzi scheme case. But taking the helm of a national non-profit organization with fundraising, research, and education goals loomed as a task outside his longtime experience in the legal profession. “It’s a totally different set of skills,” he said. “It’s a totally different thing when you have a board of directors and a CEO.” Yet, as with many other loyal foundation supporters, there are deep personal reasons for becoming more involved. Kozyak, who previously served as a member of the foundation’s executive committee, has two good reasons. Both of his parents developed the disease and have benefitted from the services created over the years by the Foundation, which was formed in Miami in 1957. “You kind of have two choices,” he said. “You can ignore it or you can say, I want to make a difference.’” His predecessor in the post, Dr. Bernard Fogel, said Kozyak was “very leery of taking this responsibility.” “He wanted to get into it and do it right,” said Fogel. “Since he’s taken over I’m very impressed with his energy level, his commitment. I think he’s going to help make the Foundation much more successful.” In taking the position, which he started in January 2014, Kozyak has carved out time from an agenda that’s already brimming with obligations. He still works select cases and
oversees his Kozyak Minority Mentoring Picnic in Miami which is again on the calendar for November. Developed out of Kozyak’s desire to see the expansion of diversity in the South Florida legal profession, the daylong event has grown to attract more than 4,000 students, lawyers, judges, and others who are dedicated to ensuring that minority law students are well prepared to succeed in the legal community. More immediately ahead is the NPF’s annual national Moving Day fundraiser, which will again occur in South Florida at Miami’s Bayfront Park on October 5, 2014. Janet Reno, the former US Attorney General in the Clinton Administration and a former MiamiDade State Attorney, has again agreed to serve as the honorary chair. Reno was diagnosed with the disease in the 1990s.
Photo by Donna Victor
You kind of have two choices, You can ignore it or you can say, I want to make a difference. — John Kozyak
“He’s coming at precisely the right time,” said Fogel. “First of all the organization is really more of a superior organization than it has ever been before. It was really more of a local organization that had capable people but not strong professionals.” Now, he said, the Foundation does have a team of real professionals, thanks to the efforts of Joyce Oberdorf, the president and CEO since 2008. Parkinson’s, according to Foundation literature, “is caused by the deterioration of neurons in the brain that produce dopamine, an essential neurotransmitter that controls smooth, coordinated muscle function.” When
a majority of those cells are damaged, symptoms start to appear. They include slowness of movement, shaking or tremors while at rest, stiffness or rigidity in the limbs or trunk, and difficulties with balance. The prevailing medical community conclusion is that the disease is genetically based, though environmental factors such as exposure to insecticides and other toxins are believed to serve as triggers. There is no cure. “Our mission is to try to make sure that people who have Parkinson’s have the best possible life they can,” said Kozyak. The Foundation estimates that there are 35,000 patients with Parkinson’s in MiamiDade and Broward counties. It has funded more than $180 million in research and support services to make life easier for people with Parkinson’s. It maintains 39 Centers of Excellence around the country and elsewhere to assist more than 50,000 patients. Worldwide, the organization estimates that four to six million people suffer from the disease, which is the 14th leading cause of death in the US, where roughly a million people suffer from Parkinson’s. Patients aren’t the only ones in need. Caregivers, including family members, often bear the brunt of riding to the rescue, whether it’s providing transportation for those patients who can’t drive, assisting with shopping or housework, helping with therapy, or just plain listening. That’s a key reason why the Foundation has invested in local resources and services such as support groups and exercise and wellness classes. A national helpline (800.473.4636) helps patients and family members daily. While making public pitches for the Foundation, Kozyak tells audiences that speech therapy helped his mother regain the ability to enjoy a longtime pleasure: whistling. “She loved to whistle,” he said. “Now, she’s resumed.” E — David Lyons
INDUSTRY FACES ECONOMIC DEVELOPMENT
EXECUTIVE SOUTH FLORIDA
newcomers, and do a better job of advertising the successes of companies that decided to locate in Broward. Besides intra-county collaboration, Swindell and his team are fostering alliances with other South Florida developmental groups to grow technology traffic and to attract international businesses and investors. Even though he represents Broward interests, he’ll arrange for a nascent tech company to head for the FAU research park across the county line in Boca Raton if it’s in the company’s best interest to do so. “There are times a company will find a better fit at the incubator in FAU,” he said. “When they’re ready to graduate from the incubator, they’ll say, ‘We really appreciate what you did for us.’” In the end, the direction “you’ve planted a strong positive with that business,” and possibly, the notion that Broward is the best place for the company’s next stage of development. The alliance has hitched its wagon to the Miami-based Technology Foundation of the Americas, which sponsored an eMerge Americas Tech Week event in early May that brought participants from all over the Western Hemisphere. “It’s a brilliant concept to create an annual event that brings people from South and Central America to South Florida,” said Swindell. He noted that while Miami itself inevitably gains the international publicity, there is a strong potential for a spillover that benefits Broward and Palm Beach counties. In and of itself, Fort Lauderdale is no stranger to Latin American investors and business figures. Port Everglades has a long-standing international clientele, airlines fly daily to points south from Fort Lauderdale - Hollywood International Airport, and unsolicited inquiries are rolling in from public and private sector figures in South America. Swindell reported that a commerce official from a large state in Brazil called unexpectedly about creating “soft landing” logistical points for some 50 small Brazilian companies looking to do business in Florida and elsewhere in North America. His vice president of business development is following up. E
President and CEO, Greater Fort Lauderdale/Broward Economic Development Alliance
These days, names such as Actavis, Aveva Drug Delivery Systems, Bolton Medical, Florida Supplement, Goodwin Biotechnology, ImmunoSite Technologies, MAKO Surgical, Micrus Endovascular, Nipro Diagnostics, and OmniComm Systems populate a strong roster of pharma and bioscience corporate residents in Broward. Key tasks are to keep the incumbents happy, provide an inviting climate for would-be
Photo by Jorge Parra
hen a state economic official wondered why Broward County boasted the lowest unemployment rate of any large urban area in Florida, Bob Swindell was quick to answer. “It’s a squishy, subjective statement to make, but we have this collaborative model,” he recalled saying. As the president and CEO of the Greater Fort Lauderdale/Broward Economic Development Alliance, Swindell is no one-man band. When the alliance plays host to out-of-town executives who are considering the relocation of their businesses to Broward, Swindell brings lots of friends to the table. They include presidents from local colleges and universities, top county school officials, or even people from the performing arts center. They’re present to provide answers to questions and assurances to would-be newcomers that problems can be solved and needs fulfilled if a company decides to set up shop in the Fort Lauderdale area. A former angel investor and longtime economic development specialist, Swindell took over the day-to-day helm of the alliance for good in 2010 after serving as interim president and CEO in late 2009. A lifelong county resident, he was president of Champion Manufacturing, an industrial supply firm for 18 years. He serves on a number of executive boards, including the South Florida Technology Alliance, Workforce One, and the Florida Economic Development Council. In 2005, the county commission appointed him to the Florida Atlantic Research & Development Park Authority. Those associations help form the groundwork of the alliance’s principal mission: attract high paying, high skilled jobs to an area that has seen large numbers of technology jobs come and go. Companies in the technology and life science fields have a considerable history of doing business in South Florida. Motorola still maintains a significant presence in Plantation after a decades-long presence. Citrix, the software firm, continues its long-time residency in northern Fort Lauderdale. Blackberry operates a design center in Sunrise, and Microsoft’s Latin America office is in Fort Lauderdale.
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ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, MAKE REFERENCE TO THIS BROCHURE AND TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE. OBTAIN THE PROPERTY REPORT REQUIRED BY FEDERAL LAW AND READ IT BEFORE SIGNING ANYTHING. NO FEDERAL AGENCY HAS JUDGED THE MERITS OR VALUE, IF ANY, OF THIS PROPERTY. We are pledged to the letter and spirit of U.S. Policy for the achievement of equal housing throughout the Nation. We encourage and support an affirmative advertising, marketing and sales program in which there are no barriers to obtaining housing because of race, color, sex, religion, handicap, familial status or national origin. All images and designs depicted herein are artist’s conceptual renderings, which are based upon preliminary development plans, and are subject to change without notice in the manner provided in the offering documents. All such materials are not to scale and are shown solely for illustrative purposes. No guarantees or representations whatsoever are made that existing or future views of the project and surrounding areas depicted by artist’s conceptual renderings or otherwise described herein, will be provided or, if provided, will be as depicted or described herein. Any view from a unit or from other portions of the property may in the future be limited or eliminated by future development or forces of nature and the developer in no manner guarantees the continuing existence of any view. These materials are not intended to be an offer to sell, or solicitation to buy a unit in the condominium. Such an offering shall only be made pursuant to the prospectus (offering circular) for the condominium and no statements should be relied upon unless made in the prospectus or in the applicable purchase agreement. In no event shall any solicitation, offer or sale of a unit in the condominium be made in, or to residents of, any state or country in which such activity would be unlawful. This condominium is being developed by Parcel C2 Property, LLC, a Florida limited liability company (“Developer”), which has a limited right to use the trademarked names and logos of Codina Partners pursuant to a license and marketing agreement with Codina Partners. Neither Codina Partners, nor Armando Codina, is the developer of this condominium. Any and all statements, disclosures and/or representations contained herein shall be deemed made by the Developer and not by Codina Partners or Armando Codina and you agree to look solely to Developer (and not to Codina Partners, Armando Codina and/or any of their respective affiliates) with respect to any and all matters relating to the marketing and/or development of the Condominium and with respect to the sales of units in the Condominium.
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INDUSTRY FACES EDUCATION
Executive Director, Goldman Sachs 10,000 Small Businesses Program
hen Eduardo José Padrón, Ph.D., president of Miami Dade College (MDC), lobbied for, and won, the opportunity to bring 10,000 Small Businesses to his college, hiring John Hall as its executive director was the logical choice. Hall has an impressive resume. He was top management for five businesses, successfully turned around three troubled companies, and was on the strategic acquisitions team for mergers and acquisitions estimated at more than $300 million. He’s served on various boards, including the Miami Dade College Foundation. “I have known John for a long, long time; he is a man of significant accomplishment in every position,” said Dr. Padrón. “He understands the community and has all the right attributes to provide the right leadership. We are very fortunate to [have] convinced him to do this. He strongly believes in education and is doing a fantastic job.” Goldman Sachs committed $5 million, $1 million per year for five years, to execute the program at MDC through the School of Business and School of Continuing Education and Professional Development—10,000 Small Businesses aims to create jobs and spur economic growth by providing small business owners with training and support services. “I do believe there is a movement nationally to expand entrepreneurship; it’s clear to the ecosystem a high percentage of jobs in America are created by small businesses,” said Hall. “Businesses in this niche, between $150,000 and $4 million, happen to be a segment of the business community that is generating a high percentage of the new jobs.” 26
EXECUTIVE SOUTH FLORIDA
Just in the Miami area, more than 54,000 small businesses contribute to the local economy. Originally, Dr. Padrón approached Goldman Sachs, and explained that Miami is a city that depends on small businesses as an economic base. “They had prioritized the cities when I first talked to them—Miami was not on the initial list.” It took him a year to convince them. “Miami has the economic need and scalable small business sector that we look for in a partner for 10,000 Small Businesses, but additionally we found an incredibly strong partner in Miami Dade College and Dr. Eduardo Padrón,” said Dina Habib Powell, president of the Goldman Sachs Foundation. “The city has a significant appetite for entrepreneurial education and has local leaders dedicated to supporting small business growth and job creation.” There are 17 participating US cities, among them, Chicago, Houston, Los Angeles and New York. Miami, which launched in October 2013, is number 16. About 200 applicants, from varying industries, applied for the 13-week Miami program, held at the Wolfson Campus, which started in February and runs through mid-May. (Next one starts this month). About 30-40 business owners— “scholars”—participate in each cohort. Three cohorts per year are planned, meaning the program could reach about 100 business owners annually. “The curriculum is designed to take the owners of existing businesses to the next level,” explained Hall. To participate, a company must have been operational for at least two years with a minimum of four employees (fulltime equivalent), and minimum revenues of $150,000 in the last fiscal year.
Scholars develop a plan to expand their business, increase revenues, and hire new employees. The cohort’s nine modules cover traditional classroom subjects taught by Miami Dade College professors and outside faculty. Scholars also participate in five workshops and clinics, and receive business support services. “Each business owner is assigned a business advisor from our staff—it’s like a business consultant to the owner,” said Hall. Peer-to-peer learning is also an essential component, giving the business owners an opportunity to learn from each other. Classes are free for program participants. Miami does not have a large corporate headquarter base, explained Dr. Padrón. “Our ability to succeed depends on entrepreneurship and small business. The best thing we can do is make sure small business people have the tools they really need to compete effectively in today’s ever-changing economic environment. It’s a program that is very well structured, has incredible results, and Miami so far has been at the forefront of surpassing all the benchmarks in terms of recruitment.” Hall said out of the 1,300 scholars from around the country, there is a 99 percent graduation rate. Over 63 percent of the businesses have increased revenues within the first six months, and over 45 percent have increased employment within six months. “The track record to date suggests over the course of five years, if we have 500 graduates of this program, the economic growth impact on Greater Miami could be substantial,” said Hall. E —Millie Acebal Rousseau
Photo by Donna Victor
INDUSTRY FACES REAL ESTATE DEVELOPMENT
Development Manager, CC Residential
EXECUTIVE SOUTH FLORIDA
Photo by Donna Victor
magine a middle-scale, urban Miami consisting of three-story, mixedused developments that are flexible, environmentally sustainable, affordable, and promote walkability and a better quality of life. Seems out of place here where cranes dot our skyline? Not to Andrew Frey. The 35-year old is a development manager for CC Residential, a firm that develops firstclass multifamily communities, founded by real estate powerhouses Armando Codina and James Carr. Incidentally, Frey is married to Alexandra, one of Codina’s daughters. Family ties aside, the soft-spoken attorney and urban planner climbed up the development ladder, working as an urban planner at the Cambridge Housing Authority in Massachusetts, and as an associate in the land use group at both Gunster Yoakley and Akerman Senterfitt law firms prior to joining CC Residential. While at the Cambridge Housing Authority, Frey looked to his colleagues to figure out who succeeded at getting buildings built. “It seemed to me the lawyers were very instrumental, especially in understanding the laws about funding and how that funding could unlock the project,” he said. “If you needed the last million dollars, they knew how to find it; they knew the law.” He consulted his mentor, Kath Phelan, a current researcher at RMIT University in Melbourne, Australia, who at the time, was working towards her Ph.D. at MIT. “I told her I was going to be a lawyer, and she said: ‘Planners have great ideas, but no one listens to us. No one likes lawyers; but everyone listens to them.’ So I said, I’m going to law school.” Phelan recalled that Frey was one of her most enthusiastic and engaged urban planning students in the Harvard University Career Discovery summer program. “I think urban planning needs more people like Andrew,” she explained. Frey advocates for smaller buildings. When he talks about the prospect of middle-scale projects, his quiet demeanor is quickly overshadowed by his childlike enthusiasm. He excitedly shares examples of great urban neighborhoods around the world—Savannah, Georgia, New Orleans’ French Quarter, and the old parts of Cartagena, Colombia. He sees potential in local neighborhoods like Little Havana, Little Haiti, Allapattah, Overtown, Design District, and Wynwood. “It allows the opportunity for real people to have ownership of the neighborhood,” said Frey. People can purchase these small buildings, live on the top floor, and rent out the bottom floors, and build their wealth. “It’s a way a lot of our immigrant cities grew – the triple deckers in Providence, Rhode Island and the row houses in Baltimore.”
Add a mixed-use component with shops and restaurants on the first floor or nearby, and you encourage walkability and biking, and for longer trips, car sharing and more use of mass transit. The theory is that this leads to a better quality of life, and overall happiness, as explored in Charles Montgomery’s book, Happy City: Transforming Our Lives Through Urban Design. While it’s forward thinking, it may appear idealistic in Miami, where politics and highpowered developers bent on leaving a legacy through grand high-rises can reduce dreams to rubble. Miami has a bad rap for not protecting its history, but Frey believes otherwise.
We owe it to
our fellow human beings not to just make our buildings better than average, but as good as possible. It’s better living
— Andrew Frey
“If you were to say we don’t respect our history, that wouldn’t be accurate.” He points to well-known and celebrated historical figures like Julia Tuttle and Henry Flagler, and historical events like the influx of Cuban immigrants and their contribution to the community over the years. He references Art Deco and Mediterranean Revival architectural styles, and the iconic Freedom Tower. “You can’t say we don’t celebrate those, we do.” It helps that key people believe in him. Neisen O. Kasdin, office managing partner at Akerman LLP, and Frey’s former boss, said, “Andrew is super smart, well read and passionate about good urban design and planning. He holds strong opinions and is considerate of others and the environment. With his experience in development over the past few years, I am certain he will be building innovative projects in the not too distant future that will help redefine urban living.” Gino Polizzotto, founder, president, and CEO of Polizzotto Development, knows Frey from his work with CC Residential. “He really understands the legal aspects, political relationships, and the importance of how to leverage those relationships in a positive way,” said Polizzotto. The Knight Foundation backs Frey’s ideas and has awarded him three separate grants. “Miami has been building to the horizon and so this is that middle ground,” said Matt Haggman, Knight’s Miami program director. “He’s been a real pioneer, trying to drive the conversation about it. He’s leading the way and thinking of new ways to develop Miami’s neighborhoods.” Frey’s heart is in the right place. When he was younger, he participated in volunteer projects that took him to Haiti and Tirana, Albania. He was the chair of the Chapman Partnership’s nextgen group and young leader chair of the Urban Land Institute. More recently, he founded two non-profits: Townhouse Center, to promote building urban neighborhoods, and Dawn Town, to strengthen the connection between Miami and innovative architecture. Governor Rick Scott also recently appointed him to the governing board of South Florida Regional Transportation Authority (SFRTA), a public transit authority serving Miami-Dade, Broward, and Palm Beach counties. “I like buildings and architecture and development and planning, and they’re my profession, and how I make money, but they also have the ability to make other people’s lives better if done in the right way,” said Frey. “We owe it to our fellow human beings not to just make our buildings better than average, but as good as possible. It’s better living by design.” E —Millie Acebal Rousseau JUNE/JULY 2014
INDUSTRY FACES GOVERNMENT
BARBARA MUHAMMAD SHARIEF
arbara Sharief represents Broward County’s growing diversity as the first African-American woman mayor of Florida’s second largest county, population 1.8 million. She’s a leader determined to foster job creation. Hiring locals through government contracts, increasing federal and state money into small business coffers, and getting Broward’s 2,800 homeless residents into safe housing are among her top priorities. “We’ve required local talent to keep the money local. In the last three years, we’ve decreased unemployment from about 11 percent to 5 percent,” said Sharief. The state’s unemployment rate, by contrast, is about 6.2 percent. The Fort Lauderdale-Hollywood International Airport’s $2.3 billion expansion should also offer local opportunities, she added. She’s also targeting the federal Small Business Jobs Act of 2010, which funded $1.5 billion to support lending to small businesses. Yet, of the $53 million from Florida’s Small Business Credit Initiative, “there was only one loan in Broward County,” said Sharief. “We need to let people know what’s available.” Broward County’s high foreclosure rate— 8.1 percent in October, compared to a national 2.1 percent average, according to CoreLogic—has pushed families out into city streets. Expansion of housing for homeless families is also a top priority. “We are seeing mothers with kids, entire families. We need to get them quickly integrated into society,” said Sharief. Recognized by her peers statewide, Sharief is the Florida Association of Counties’ elected second vice-president, in line for president in 2016. Sharief, a Miramar resident, faces opposition for a second term in August from Miramar Commissioner Alexandra Davis, founder of the non-profit Caribefest Inc. Sharief takes credit for leading Broward through unfunded mandates of about $33 million down to $4 million, through budget cuts, thus saving residents from a 1.8 percent millage tax hike. “As the first African-American woman mayor, there are so many expectations. I try to stay focused,” said Sharief. “I don’t over-promise. You can under-promise and over-deliver and keep people happy.” E — Laura L Myers
EXECUTIVE SOUTH FLORIDA
Photo by Donna Victor
Mayor, Broward County
INDUSTRY FACES MEDIA
EXECUTIVE SOUTH FLORIDA
N NANCY ANCRUM
Photo by Donna Victor
Editorial Page Editor Miami Herald
ancy Ancrum believes in the power of her pen. She’s not afraid to use it to influence change. Ancrum, 57, now sits on the Herald’s executive committee and oversees an editorial op-ed staff of five. She replaced Cuba-born Myriam Marquez, the paper’s first Hispanic woman editorial page editor, who was promoted to executive editor at el Nuevo Herald. Ancrum is the first African-American woman editorial page editor. Ancrum plans to broaden online presence, expand online opinions, and grow the use of social media. For instance, Ancrum plans to launch a voting rights campaign, with public forums to drive online readership, new voter registration, and election participation. “We’ll be taking the lead in a ‘get out the vote’ initiative,” she said. Ancrum started at the Herald in 1983 as an editor and gained a following for her biweekly column, “The Cultural Kitchen.” She has also worked at USA Today and the Baltimore Evening Sun. “She is a solid journalist with deep roots in Miami-Dade County and knows the community well,” said Ana Acle-Menendez, The Beacon Council’s vice president of marketing and communications who worked with Ancrum at the Herald. The Council and its One Community One Goal initiative which urges academic and business leaders to match local graduates’ skills with employers’ needs—and the Herald are targeting Miami’s brain-drain as a top goal. “Nancy is concerned about this,” said Acle. Ancrum, said she also plans to engage with Miami’s burgeoning technology community, including Lab Miami, in a strategy that’s similar to the Council’s effort to establish a technology hub. Ancrum’s appointment “reflects the cultural diversity of the community,” said Norman Braman, the 81-year-old billionaire car dealer and civic activist who led the recall of MiamiDade Mayor Carlos Alvarez in 2011. “As an institution, we listen. We hear,” said Ancrum. “We invite you to engage and we really, really care about this community.” Of the Top 25 US daily newspapers, the Herald ranks 25th, with a Monday to Friday daily average circulation of 147,130, according to an Alliance of Audited Media report for six months ended March 31, 2013. The Herald’s Sunday circulation appears to be holding steady. Sunday total print and digital circulation, from April to September 2013 was 191,323, up 1,505 from 189,818 in 2012’s same six months. Ancrum’s writing style mirrors her personality: open, articulate, witty, folksy, and occasionally salty. E — Laura L. Myers JUNE/JULY 2014
hether it be to one of his offices around the country, participating in a marathon, or an 8 to 11 mile run on a Saturday morning, Monte Kane is a man on the move. “They say that I have a high energy level,” he said. Indeed Kane does. The managing director of Kane & Company, P.A., Certified Public Accountants and Advisors runs at least four times a week and splits his time between his South Florida, New York, and Las Vegas offices. Kane also does the planning and fundraising for the annual 1040K Run. The 1040K Run—comprising 5K and 10K races in Coconut Grove—recently celebrated its 25th anniversary. Years ago, Kane joined the MiamiDade chapter of the Florida Institute of CPAs and became involved with its Educational Foundation. The goal of the 1040K is to raise money for scholarships for South Floridian accounting students in their fourth and fifth years of college. Primarily, Kane said, the run was launched in memory of Dade County’s first African-American CPA, Lewis Davis. The run is typically held on tax day, yet this year it was held Wednesday, April 16. Kane said he liked the idea of having the event the day after tax day, “So we are not so tired when we go to run the race.” The race annually draws more than 800 participants and to date has given away over 40 scholarships. Kane has also completed 10 full marathons and about 40 half marathons. He was born in New York and has lived in Miami since the age of four, got his start in the accounting business fresh out of college when he joined the Miami office of Arthur Andersen and worked as an auditor for about five years. He then joined Spear Safer & Co. and signed up for night school at Florida International University, graduating with a Master of Science degree in Management (Taxation). When condos started becoming increasingly popular in South Florida, Kane’s boss at Spear Safer assigned him the task of taking charge of a condo client in Aventura. At the time, Kane said, there was no guidance for accountants in regards to condo and homeowner associations.
Kane and some colleagues looked into this further and discovered there was only accounting guidance for hotels, but not for condos, homeowner associations, or timeshares. They made a presentation to the American Institute of Certified Public Accountants (AICPA) Real Estate Committee on the need for accounting and audit guidelines. The AICPA appointed a seven-member task force, including Kane, to solve the issue. He spent 12 years traveling the country, meeting
with CPAs and other professionals, making presentations before the AICPA and the Financial Accounting Standards Board, and ultimately co-authoring the AICPA Accounting and Audit Guide for Common Interest Realty Associations. The guide became the generally accepted accounting principles and auditing standards for condo and homeowner associations. (He is the only one of the original group who has continued to update the guide.) In the meantime, Kane became partner at Spear Safer at the age of 29. He remained at the firm for some years until he decided to start his own venture. Kane & Company was officially founded in 1990. Today, from his Brickell Avenue office, Kane can see some of the condo towers whose associations he represents. In Florida and Nevada, the firm represents approximately 200 condo associations. “These condo associations are major business enterprises,” he said. Kane explained in New York City, where the firm has had a presence for about a year and is establishing its foothold, most of the residential buildings are cooperative housing corporations (co-ops) in which a building is owned by a corporation. There is not a lot of turnover in management agents, lawyers and accountants. “It is going to be just one building at a time for us there,” he said. Back in Miami, Kane also oversees two other enterprises, Kane Technology Advisors and K & L Valuations. The former offers onsite and remote technology services for existing and new clients, while the latter provides business valuation services. While most accountants say tax season is the busiest time of the year, each day of the year is jampacked for Kane, be it managing the companies, working on complex cases, or competing in marathons. “I think that it is important for the managing director of a firm to set an example in more than just doing technically good work,” said Kane. “[It] is also [about] serving others, being healthy, and promoting good health and well-being. E
Managing Director, Kane & Company, P.A., Certified Public Accountants and Advisors
EXECUTIVE SOUTH FLORIDA
Photo by Donna Victor
INDUSTRY FACES ACCOUNTING
Photo by Jorge Parra
BUSINESS OF POLITICS
TOMรS REGALADO City of Miami Mayor
Just a few months into his second term, City of Miami Mayor Tomรกs Regalado is hard at work making it easy for local companies to take care of business. JUNE/JULY 2014
BUSINESS OF POLITICS he mayor is often spotted at ribbonwaivers so the developers could deliver units cutting ceremonies, and he gets to customers as quickly as possible. The slack for it, with critics sneering at mayor’s office also works with the Florida his attendance at these events. “I Department of Transportation (FDOT) to have made a commitment every facilitate infrastructure components that make time there is new business opening development projects feasible. Employees in the City of Miami, a ribbon cutting, I’m are also on-call for inspections to keep there,” he said. “It’s important for new construction moving. “Sometimes, a delay of businesses to see the support of the mayor.” a week costs the developers thousands and That support extends past press photo ops. thousands of dollars.” Matt Malone, founder and president of Miami Club Rum, the city’s first liquor distillery, met Regalado when the city leader hosted a hospitality networking event. Malone would later call on the Mayor’s office for help when he was facing challenges with licensing requirements. “There are many steps you have to go through to build a distillery in the city,” explained Malone, adding that it’s not a simple process. “He and his administration were extremely helpful.” Rocco Carulli, executive chef and owner of R House, a restaurant lounge and gallery in Wynwood, shared a similar story. The restaurant was behind schedule opening, and expenses were piling up, so the mayor helped them get a temporary special events permit to open during Art Basel. “We had so many expenses, and no money coming in,” said Carulli. The soft opening, he added, “got us exposure, and gave a preview of what we were about.” R House officially opened in January. Regalado said he is committed to creating a business-friendly climate. “Sometimes the business community feels the Tomás Regalado, City of Miami Mayor government is an adversary; everything is no,” he said. “It’s difficult, but we The mayor also endorses the state workforce will change the culture in the next four years. program, which trains residents for jobs, and Hopefully, the word ‘no’ is substituted with, incentivizes companies to hire them by paying 90 ‘let’s see what we can do.’” percent of their salary for the first six months. During his first term, the mayor worked to As of press time, the mayor said that in the make investors and developers feel welcome last month, up to 18 people, had been placed by reducing taxes, which in turn made projects in jobs in Wynwood restaurants and galleries. viable, especially after the 2008 downturn. Regalado also enjoys a symbiotic relationship Additionally, his team helped with construction with The Beacon Council, the organization
EXECUTIVE SOUTH FLORIDA
tasked with facilitating business investment and bringing businesses to South Florida. “The City of Miami is our most active municipality in retention and recruitment from domestic and international markets,” said Ivette Arango O’Doski, vice president of government and community relations for The Beacon Council. “Last year, The Beacon Council assisted 15 companies that chose Miami to expand or relocate.” She credits a good working relationship with the mayor, his staff, and the different departments with aiding the Council’s efforts. “When you have good communication, you have good results.” One of the companies The Beacon Council assisted was Sapient, a business, marketing and technology global-services provider. The Council helped Sapient expand to its new location in Miami’s Coconut Grove, creating 67 total direct jobs and a new capital investment of $6.44 million, according to The Beacon Council. We are trying to be like Chicago and New York in the international arena,” said Regalado. The city has filed an application for the federal program EB-5 that has been successful in other areas. EB-5 grants foreign investors in the US with a green card for them, their spouse(s) and children. “We will use that (EB-5) to bring jobs and investment to the city and Miami-Dade County.“ The mayor also hopes to sign an agreement with Google for them to participate in programming classes for kids in different parts of Miami. “It not important for today, but for the next 10 years,” he said about training the next generation in programming. At the end of the day, when it comes to business, Mayor Regalado measures success like this: “You open a new business, you can keep it open, you can expand, the government helps, not gets in the way … that’s success.” E — Millie Acebal Rousseau
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Join EXECUTIVE South Florida magazine as we honor these 6 distinguished business leaders as our 2014 Legends
Founder, Bergeron Land Development
Alicia Cervera Sr. Founder, Cervera Real Estate
Burton Landy Partner, Akerman LLP
David Lawrence Jr.
President, The Early Childhood Initiative Foundation
Stanley Tate Chairman, Tate Capital
President, Coconut Grove Arts Festival Through their diligence and determination, these individuals have had a significant impact on the growth and development of South Floridaâ€™s business community. Their philanthropic, civic and charitable endeavors have left a lasting impression and they continue to extend their dedication and commitment today. Join us as we celebrate their legendary achievements
AUGUST 2014 EXECUTIVESOUTHFLORIDA.COM
Photo by Donna Victor
MITCHELL A. BIERMAN
Equity Partner, Weiss, Serota, Helfman, Pastoriza, Cole and Boniske, P.L. As a third generation born and bred Miamian, Mitchell Bierman feels a special connection to the area. His work in government affairs law allows him to be involved with his community on issues that impact the quality of life in South Florida. It is his understanding of law not only at the national but also at the state and local levels that gives him a competitive advantage. JUNE/JULY 2014
or the past 16 years Mitchell Bierman has been at Weiss, Serota, Helfman, Pastoriza, Cole and Boniske, P.L. His work has included winning and negotiating large public contracts, public and private partnerships, public infrastructure improvements, and affordable housing developments, as well as advocating for industry clients on legislative issues affecting their industries. Bierman also chairs the firm’s Airports and Aviation Service Group.
EXECUTIVE South Florida magazine: Even though your father, Donald Bierman, is a legendary criminal lawyer, what made you decide to go into law? Mitchell Bierman: I thought the practice of law would give me the opportunity to be involved in the community in a very meaningful way. As an attorney, my work in the community includes representing businesses and governments in pubic/private transactions, and it is through these types of partnerships where community and public infrastructures are produced. I also serve as the city attorney for the Town of Cutler Bay and the Village of Pinecrest; I’m also part of a team of attorneys at the firm who serve as city attorneys for another 13 cities. In addition, I represent numerous government and quasi-government entities including the Miami Dade School Board, Miami Dade Expressway Authority, and Miami Dade College. EXECUTIVE: Seeing Miami’s growth and development, do you think it is on the right course? Bierman: I absolutely do. I am really excited about what is going on here and I’m very excited about the participation of the not-for-profit players who are providing a platform for businesses to succeed. I see great things coming from the Miami Foundation, the Knight Foundation, One Community One Goal, and some of the not-for-profit incubators and accelerators. EXECUTIVE: What are some examples of the public and private partnerships that you have worked on? Bierman: One of the most significant public and private program that our firm worked on was the development of the North Terminal at Miami International Airport. We have represented American Airlines for many years and when the North Terminal was proposed, it was essentially a public and private partnership between American Airlines and MiamiDade County. I also worked on two significant upgrades to the Miami-Dade transit system. One was the creation of a unified fare collection system that uses smart cards. The other is going on now and is about to be implemented. It is a computer-aided dispatch which provides real time passenger information about the transit system. EXECUTIVE: With the development of public and private business partnerships, what are some of the challenges you face with these types of relationships? Bierman: I think this is where my competitive advantage comes in. I understand these transactions from all perspectives because I’ve represented both sides. I started my career as an assistant county attorney at Miami International Airport and made these types of deals for the airport. Essentially they are commercial deals but with a government owner. As I advise my clients in the private sector, I provide a fairly rare level of insight into the values and decision-making factors that typically influence 40
EXECUTIVE SOUTH FLORIDA
a government decision. Conversely when I represent government in the transaction, I am very aware of business’s pressure points and motivations. EXECUTIVE: Do you think that the relationship between the public and private sectors will become more important as Miami continues to grow? Bierman: Yes, because the types of infrastructure and services that are needed for this community, at the rate at which it is growing, are going to outpace the ability for the government to accomplish them in a meaningful way. EXECUTIVE: Recognizing that you have a specific expertise and skill set, do you think it is important for today’s law firms to have a niche and to drill down in their areas of expertise? Bierman: I see two significant trends in the future practice of law. The first is that the commodity-type of legal work is going to be less expensive for clients. Fewer clients are willing to pay high hourly rates for work that doesn’t require a specific expertise. But clients are willing to pay very high hourly rates for highly specialized work within a very specific knowledge set. It is important for lawyers to realize that in addition to knowing the law, they must also have a higher level of specialization and very specific industry knowledge. E
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Is Miami poised to be the next Silicon Valley? The critics are skeptical, but the Knight Foundation is banking on it. By Millie Acebal Rousseau | Photography by Gio Alma
Alberto Ibarg端en President and CEO, Knight Foundation 42
EXECUTIVE SOUTH FLORIDA
Knight in Shining Armor
In Miami, it seems to me, if you’re not focused on diversity and honestly, entrepreneurship, you’re really not paying attention to what drives this place.
here is a quiet movement revolving around technology and startups in South Florida, and The John S. and James L. Knight Foundation is putting money behind it in the hopes of sparking a revolution. Knight, headquartered in Miami, invests in projects designed to strengthen communities. With a presence in eight cities—Akron, Charlotte, Detroit, Macon, Miami, Philadelphia, San Jose and St. Paul—the foundation has traditionally invested in projects related to the arts and journalism, in the spirit of the organization’s founders who were newspaper publishers, brothers John and James Knight. When funding projects, explained Alberto Ibargüen, president and CEO of the Knight Foundation (and former publisher of the Miami Herald and el Nuevo Herald), the Foundation looks at trends in each of its communities. “In Miami, it seems to me, if you’re not focused on diversity and honestly, entrepreneurship, you’re really not paying attention to what drives this place.” Miami, by nature, is not like other cities. First, about three quarters of Miami, said Ibargüen, was born somewhere else. This phenomenon helps drive the city’s sectors of tourism, financial services and international trade. However, not too many Fortune 500 companies are headquartered here. Instead, it’s a place where small and medium businesses, thus far, have thrived. And, whether small, medium or large, they don’t always play by conventional rules. Ibargüen recounts inviting former Brazilian president, Fernando Henrique 44
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— Alberto Ibargüen
Cardoso, to Miami, with a forewarning. I told him, “I want you to know we will have good quality people, but not the same. They’re not going to be corporate types. They’re going to be entrepreneurial, but much more direct and interested in impact and less patient for visionary and grand thinking.” It was a message the former president received first hand when encountering George Feldenkreis, chairman and CEO of Perry Ellis International, headquartered in Doral. Ibargüen recalled that Feldenkreis approached the then president and told him he was forcing him to go to Asia to manufacture because of his bureaucracy. His boldness is indicative of corporate culture here. “There’s something else going on in this town, every day, more and more it’s becoming a hub, a center of entrepreneurship, especially when you think in terms of a digital economy,” said Ibargüen. According to a recent Kauffman Foundation study, on a per capita basis, Miami, in 2012, had the highest entrepreneurial activity rate (0.56 percent) in the country, followed by Los Angeles and Houston. Many of these startups and entrepreneurs are fueling a technology boom, such as Andrés Moreno’s Open English, an online school that teaches English via live classes. Moreno is a Caracas native who first lived in Silicon Valley before moving his operation to Miami. The company secured over $120 million in venture capital to expand globally. Knight Foundation wants more of these success-type stories and has made, in the past year and a half, over 50 investments in entrepreneurship and technology. “Our approach has been lots of smaller investments, rather than big ones,” explained Matt Haggman,
Miami program director for the Knight Foundation. Investments range from $5,000 to $250,000, and generally are under $100,000, with a few exceptions. Knight gave global non-profit Endeavor, which supports high-impact entrepreneurs, $2 million over five years to bring its first US office to Miami. Knight also invested $250,000 in technology entrepreneur Manuel Medina’s eMerge Americas conference, which hopes to position Miami as a technology hub. Miami-Dade County gave eMerge another $250,000 further demonstrating government interest in expanding the local technology sector. Knight also funded the technology meet-up group Refresh Miami, which Haggman said, helped them to grow from 3,000 members to more than 8,000 by the end of 2013. Knight still invests heavily in the arts, but the segue into technology and entrepreneurship has been notable. The shift started about two years ago when Haggman, a former reporter for the Daily Business Review and the Miami Herald, came onboard. “Alberto said, go talk to people for the next five months, and tell me what we should do in Miami,” recalled Haggman. What Haggman found were real opportunities around entrepreneurship and startups, and so the focus became to make Miami more of a place where ideas are built, which in turn would entice entrepreneurs to come, and stay, and spur economic development as a bi-product. RIGHT: Knight Foundation’s Matt Haggman, Program Director / Miami and Carol Coletta, Vice President, Community and National Initiatives
Knight in Shining Armor
ABOVE: Start-up City: MIami, sponsored by Knight Foundation
Culture brings people together; a more attached group of citizens in a community makes for a better place. — Dennis Scholl
LEFT: Dennis Scholl, Vice President, Arts, Knight Foundation 46
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“The bet is, if we can do that well, it would lead to more talent retention in addition to a better sense of place and community,” said Haggman. This idea of creating a place is very much a Knight strategy. “We are particularly interested in the question of how place accelerates talent opportunity and engagement,” said Carol Coletta, vice president of community and national initiatives for the Knight Foundation. Coletta explained that the most mobile people are between the ages of 25 and 34, and the more education they have, the more they’ll move. Why is this important? One reason, she said, is 64 percent choose the place they want to live, and then they look for a job. “People want to live somewhere they are comfortable living, that appeals to them and gives them the best quality of life for what they’re looking for. What’s important from an economic standpoint is that they’re looking in the first place.”
The Foundation has devoted substantial efforts to develop a robust community of arts and culture in Miami. “If you don’t have a vibrant cultural community, a place people feel is attractive in terms of lifestyle and intellectual engagement, you’re going to lose a lot of talent,” said Dennis Scholl, vice president of arts for the Knight Foundation. “Culture brings people together; a more attached group of citizens in a community makes for a better place.” This organic movement led Miami to change dramatically over the last decade, with a cultural explosion that encompasses the Arsht Center, New World Center, Pérez Art Museum, and the Patricia and Phillip Frost Museum of Science, currently under construction. “When you’re developing a sense of yourself culturally, it means all things are possible; causing some of the more interesting work to be made in Miami,” said Scholl. “The idea that Miami is still a very young town allows people
the freedom to be creative in ways that maybe doesn’t happen as much in other cities.” Knight is approaching the startup and technology culture much the same way, hoping to replicate what has been achieved in the arts. This takes money. In February 2013, Knight invested $250,000 into The Lab, which describes itself as a work-learn campus and in-house community of mentors, located in Wynwood. The creative campus, as it bills itself, offers different levels of membership that give entrepreneurs and startups office space along with access and discounts to events and mentors. In turn, they must be willing to organize an event, lead a workshop or mentor another company. there are very few rules in place … that’s one of the things that’s drawing people here, and Today, The Lab boasts 150 members representing 80 organizations. Knight’s investment allowed The Lab to go from 700-sq-ft of space to 10,000 sq-ft, said 27-year old Wifredo Fernandez, The Lab’s
PayPal Battle Hack competition at The LAB Miami in Wynwood.
Knight in Shining Armor co-founder and CEO. Daniel Lafuente is the other co-founder and CFO. “If you bring a lot of interesting forward thinking people together, that’s going to be good for their business,” said Fernandez. “We see people teaming up on projects, collaborating. It happens organically.” The Knight Foundation is also pumping money into other startups, such as Senzari, a music technology company with offices in Miami and San Francisco. According to its chief operating officer, Demian Bellumio, Knight is an equity investor, so he would not disclose figures. Through its Knight Enterprise Fund, Knight provides equity investments to early-stage media ventures raising a full round of funding. The Knight Enterprise Fund has invested in 26 companies, among them New York-based content companies, PolicyMic and Upworthy, and Tapad, a company with a Miami office, which helps publishers obtain additional value from mobile ads. Bellumio would, however, discuss two grants he received from Knight for two independent ventures he’s involved with through MIA Collective, where he is a partner; the grants helped fund SIME MIA and MIA Music Summit. SIME MIA, a two-day technology-focused conference, which received $250,000 in support from the Knight Foundation, was held during Art Basel 2013, and according to Bellumio, attracted 600 people from 20 countries. The event marked the first time SIME, which has been held in Stockholm, London, Barcelona, Amsterdam and Helsinki, was hosted in the US. The Knight Foundation was also one of the sponsors—$75,000—of the MIA Music Summit. “The idea was to put an event together that could unite the worlds of music entrepreneurship and music innovation,” said Bellumio. The summit included Miami’s first music hackathon, where programmers, designers and other music innovators collaborated to come up with ideas for new companies. Another initiative important to Knight is women in technology. Over two years, it invested $435,000 in Girls Who Code, a new program in Miami, Detroit and San Jose to encourage girls, ages 13 to 17 to develop skills in technology. While Knight’s hard-hitting approach shows promise, challenges remain, among them brain drain, something Ibargüen understands well. “When I ran the Miami Herald, it was a major source of frustration,” he explained. You would train reporters, they would begin to get bylines and get noticed, and then leave for major newspapers, he added. “You’re not going to stop people from taking jobs at The New York Times or Washington Post. You have to give more reasons for people to stay.” 48
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That’s where quality of life comes in, but other areas still need to be addressed, including fragmentation, infrastructure, opportunities for talent, more support for scale-up businesses and funding from private investors. Fernandez and Lafuente, who grew up in Miami, but left to pursue their undergraduate and graduate degrees elsewhere, were inspired to launch The Lab, among other reasons, to address the fragmentation issue. “Miami could really use forward thinking minds; growing up here, it was very fragmented,” said Fernandez. “Sometimes, it’s hard to find your tribe and a space, as we’ve seen firsthand in New York and San Francisco. Miami didn’t have that place.” Another issue is getting talent to stay. “One of our biggest challenges is identifying and connecting the talent with opportunities,” added Fernandez.
Venture Hive is working hard to address this through its accelerator and incubator programs designed to help entrepreneurs and startups maximize economic development impact. “Silicon Valley is 60 years ahead of us; it has an infrastructure we just don’t have,” explained Dr. Susan Amat, founder of Venture Hive. Yet, she is determined to create an ecosystem where entrepreneurs can thrive by providing solutions and trainings to high impact individuals and companies, with the goal of helping them achieve $1.5 million in sales so they can be considered for Endeavor. “If Miami is not the best place for their business, they shouldn’t stay. We find the kind of companies that is the best for here and help them execute flawlessly,” she stated. “We recruit where they would be comfortable setting up a business, understand the culture,
Emerge conference competition for modernizing medicine winners.
don’t have things holding them back, and are committed to building a Miami startup.” To critics who still argue the ecosystem is just not there, responded Fernandez. “We have support for the different levels of the entrepreneurial journey.” He said you can have an idea at The Lab, apply for an accelerator at Venture Hive, and then apply to the Knight Foundation for a grant. “If you have an idea, you have a way to really test and build that idea in Miami, as well as raise capital for it, “ he added. “Critics are always going to be critics; I don’t focus so much on them, it distracts from the work we’re trying to do here.” Finding eager funders is also a challenge. “It’s a market that lacks a critical mass of people willing to pay,” said Bellumio on why Knight’s investments are critical for success.
If you have an idea, you have a way to really test and build that idea in Miami, as well as raise capital for it.
— Wifredo Fernandez Co-founder & CEO, The Lab
“There are not a lot of sponsors here that you can tap into to finance projects.” He cited the lack of technology companies here, and believes this will change over time, but for now, it leaves a funding gap. The perceptions about Miami also need to evolve. Ibargüen acknowledged we could use more of an experienced workforce and more sophistication—goals Knight is working on—and a major intellectual hub, an area local universities are addressing. He argues that Miami does have infrastructure. In fact, Miami’s infrastructure is the reason, he said, foreigners come here. “If it’s not a good place to work with the kind of safety, security and digital infrastructure that we do have, people would not be coming here.” Miami’s diversity, as Ibargüen noted, also acts as a springboard. According to the Kauffman Foundation study, Lessons for U.S. Metro Areas: Characteristics and Clustering of High-Tech Immigrant Entrepreneurs, released in March, a “culturally diverse environment helps promote high-tech entrepreneurship among immigrants and the U.S.-born.” How do you measure the economic impact of Knight’s investments? That will take time. For now, success is measured by participation and ultimately talent retention as well as jobs created and businesses generated. “We don’t do charity, we do social investing, and we want a return,” explained Ibargüen. “In charity, the end of the affair is the act of giving. Social investing means that you don’t wait until the end of a grant to do a study. You’re constantly looking at it, making changes according to what’s happening in the market, what’s happening in society.” E
LEFT TO RIGHT: Alberto Change-Rajii, President & Founder, Grupo Arcano; Daniel Echavarria, CEO, Ganolian Investments Co.; Matt Haggman, Program Director/Miami, Knight Foundation; Peter Kellner, Managing Partner & Founder, Richmond Global and Co-Founder, Endeavor Global; Ernest Bachrach, CEO, Advent International; Fernando Fabre, President, Endeavor Global; Manny Medina, Chairman & CEO, Medina Capital Partners; Adriana Cisneros, CEO & Vice Chairman, Cisneros Group. (Not Shown: Alberto Beeck, Partner, VH Properties and VH Investments; Andres Moreno, Co-Founder & CEO, Open English; Sean Wolfington, Founder, The Wolfington Companies). 50
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Endeavor Global is a unique addition to the entrepreneurial ecosystem of Miami, where its first US outpost promises to magnify the impact of successful entrepreneurs.
By Mike Seemuth | Photography by Stephen Boxal
hen a quick-service restaurant company called My Ceviche opened in Miami Beach in 2012, the two owners relied mainly on their complementary skills to make the business successful. Roger Duarte previously had worked for an investment banking firm in Miami, and his partner Sam Gorenstein had been an executive chef at Trump National Doral Miami, the luxurious resort in west Miami-Dade County. Now they have the support of an international economic development organization called Endeavor Global Inc., a 17-year-old nonprofit that stokes the growth of high-impact entrepreneurs capable of turning small businesses that make money into big businesses. Last Year having opened a second location in the Brickell financial district in Miami, Duarte and Gorenstein are planning further expansion of My Ceviche on a much grander scale than they originally expected to achieve, thanks to Endeavor. Founded in 1997, New York City-based Endeavor provides carefully vetted entrepreneurs with valuable access to its international network of mentors, investors and managerial talent. While many companies apply for support from Endeavor, few are chosen. The organization has received approximately 37,000 applications for assistance over its history and has accepted about two percent of them. The 501(c)3 notfor-profit corporation advises and assists about 880 entrepreneurs in 17 foreign countries across Latin America, Europe, the Middle East, Africa, and Southeast Asia. Collectively, these Endeavor entrepreneurs support 225,000 jobs and generate $6 billion in annual revenue. “They always want you to think bigger,” said Duarte, and with Endeavor’s encouragement, My Ceviche is rapidly branching out. “We have two other locations we’re currently building now”—in South Miami and at Miami International 52
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Airport—“and we’ll probably have another two locations by the end of the year.” Advice from brand-name mentors is a big part of the success of Endeavor entrepreneurs, and it starts at the top. The chairman of the board of Endeavor Global is Edgar Bronfman, Jr., whose family fortune flowed from the Seagram distilled spirits business. Bronfman is a general partner of private equity investment firm Accretive LLC, which has a portfolio of companies including human resources outsourcing service AlphaStaff, online college course designer Everspring and Insureon, a leading online provider of small business insurance. Other members of the Endeavor Global board include Reid Hoffman, cofounder and executive chairman of LinkedIn. The board of directors of Endeavor Miami is star studded as well. Among the local directors are Adriana Cisneros, chief executive officer
don’t exist in a vacuum. They exist in supportive environments.” He co-founded Endeavor Global in 1997 with Linda Rottenberg, its CEO. He also is founder and managing partner of Richmond Global, an investment firm that funnels venture capital to technology and communications companies in the US, China, and India. Endeavor doesn’t compete head-to-head with other organizations that operate as business incubators or accelerators. On the contrary, “we depend on them,” said Kellner. “We are a network-mentoring model, and we depend on a very rich group of incubators and accelerators and other sources to find entrepreneurs ... If they didn’t exist, we would not be here.” Early-stage companies need not apply. Endeavor backs companies that already have a successful operating history and the potential
We’re a mentoring organization. Entrepreneurs don’t exist in a vacuum. They exist in supportive environments. — Peter B. Kellner Co-Founder, Endeavor Global
and vice chairman of the Cisneros Group of Companies, a family-owned conglomerate with estimated annual revenue of $1 billion; Manuel D. Medina, who founded data services and storage company Terremark Worldwide and engineered its 2011 sale to Verizon Wireless for $2 billion; and Andres Moreno, founder and CEO of Miami-based Open English, a leading online English school that has raised more than $120 million of venture capital. “We’re a mentoring organization,” said Peter B. Kellner, co-founder of Endeavor Global and a member of its board. “Entrepreneurs
to dramatically increase their revenues. “When they come into our organization, they really need to be at an inflection point,” said Kellner. Companies that are “seedlings and startups” have needs that business incubators and accelerators are better suited to address, he said. Prior to the startup of the Endeavor Miami affiliate last year, the parent organization looked exclusively overseas for entrepreneurs “who could really move the needle on job creation by creating very innovative companies,” said Kellner. “Entrepreneurs need a friend.
Endeavor entrepreneurs Sam Gorenstein and Roger Duarte, Founders, of My Ceviche JUNE/JULY 2014
Scaling Up Entrepreneurs qualify for Endeavor benefits though a multi-step process that begins with winning a nomination from a local Endeavor affiliate. The parent organization vets the nominees of its affiliates by convening international panels five times a year in different parts of the world. An international panel will convene in Miami at the end of this year to review Endeavor nominees from around the world. The owners of My Ceviche and another Miami company called KidoZen became Endeavor entrepreneurs last December after surviving a final review by an international panel that convened in the city of Dubai in the United Arab Emirates. Jesus Rodriguez is the owner of KidoZen, which develops enterprise software systems for companies with mobile workers who regularly use wireless handheld devices to do their jobs. In April, Endeavor Global convened an international selection panel in Florianopoliz, Brazil, that selected the owners of another Miami company, Leapfactor, to become Endeavor entrepreneurs. Lionel Carrasco and Marcela Henao, co-founded Leapfactor, a provider of software applications that support sales execution, in 2009. “My Ceviche, KidoZen, and Leapfactor are established businesses with growth potential, so they fall into the category of scale-ups. “We use that word to differentiate from startups,” said Laura Maydón, managing director of Endeavor Miami. The nonprofit organization’s support of the owners of My Ceviche, Kidozen, and Leapfactor “shows what the Endeavor model is: We are industry-agnostic,” said Maydón. More important than their industries is the fact the companies “already have proven business models and have the ability to scale,” or to increase their revenues “by three to four times.” Among the most distinctive qualities of Endeavor is its commitment to continue advising and assisting its portfolio companies as long as Endeavor entrepreneurs operate them. “Endeavor entrepreneurs are part of our network for life,” said Maydón. “We think Photo by Gio Alma
In emerging markets, it’s pretty challenging ... Entrepreneurs don’t exist in a vacuum. They exist in supportive environments.” Endeavor Global started its first US affiliate in Miami because it found a partner organization willing to provide funding for the startup. The John S. and James L. Knight Foundation, led by its Miami Program Director Matt Haggman, made a $2 million grant to Endeavor Global that made the startup of Endeavor Miami possible.
Matt Haggman, Program Director / Miami, Knight Foundation “Matt had the idea of bringing Endeavor to Miami,” said Kellner. “Matt is the one who approached me and said, ‘Would you consider doing this?’ “ Individuals recruited to serve on the board of Endeavor Miami also made personal financial commitments to cover some of the startup costs of the local affiliate. “Board members each make an annual contribution for a certain number of years, which guarantees our sustainability,” said Kellner, who declined to disclose the amounts each board member committed. 54
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that it doesn’t matter how large you are: Entrepreneurs always need someone where they can bounce ideas and be challenged. So we’re available to them throughout their life cycle as entrepreneurs.” Endeavor entrepreneurs also are expected to multiply their influence by helping other entrepreneurs in their communities. For example, KidoZen owner Jesus Rodriguez is an active supporter of Venture Hive Miami, a business accelerator. “We are looking for those leaders in the community who want to become role models and we expect that they become mentors [to other business owners],” said Maydón. “That’s how you build the entrepreneurial ecosystem, with the multiplier effect.” Maydón said her goal this year is to identify the owners of eight Miami-area companies whom Endeavor Miami can nominate for the organization. “For me to present eight [nominees], that means I need to see 60 or 70 companies this year,” she said. “It means reviewing more than one new entrepreneur per week.” Endeavor provides access. For companies that need specific types of talent on their staffs, Endeavor helps recruit the right people for the job. None of this is free to the companies that get nurtured by Endeavor. My Ceviche and Kidozen, for example, have agreed to make donations based on their sales to financially support Endeavor Miami, which also would get a small percentage of the proceeds if the companies are sold. Donations to Endeavor Miami are tax-deductible because it operates as a nonprofit organization. Duarte, the co-owner of My Ceviche, said donations to Endeavor Miami are small compared to the benefits his company receives. “Whatever we pay is nothing compared to what they give to us,” he said. “It’s hard for me to believe that there is a better organization for entrepreneurs than Endeavor,” said Duarte, “because you’ve got these people here, especially the board in Miami, who have committed themselves not only economically but time-wise. They are very successful entrepreneurs, and they have very busy schedules. But they make time for you. They have no conflict of interest.” He said entrepreneurs gain invaluable insight from applying to Endeavor—even if they fail to qualify. “The feedback that they give, even if you don’t become an Endeavor entrepreneur, you can’t quantify it,” said Duarte. “They question you, and it makes you think at a much bigger scale.” E
Endeavor entrepreneurs Marcela Henao, CMO and Lionel Carrasco, CEO of Leapfactor JUNE/JULY 2014
THE BOARD OF DIRECTORS
Ernest Bachrach a dual citizen of Argentina and the United
States, has spent more than 30 years in international private equity investment. He is a special partner of Advent International, a global leveraged buyout firm with more than $32 billion of private equity investments under management. Brachrach, who holds a Harvard MBA and a degree in chemical engineering, has served on the boards of 20 companies and is currently a director of White Plains, New York-based Bunge Group, a worldwide food supplier with annual net sales in excess of $60 billion. He also serves on the board of the Lauder Institute at the Wharton School of Business.
Alberto Beeck former executive director of strategy and corporate
development at Hochschild Mining Plc, which produces silver and gold. He is former president of Cementos Pacasmayo, a leading cement supplier in Peru. Previously Beek held positions in the investment banking business, including managing director and head of Latin American investment banking for ING Barings in New York and Baring Brothers in London. Beeck, who also is chairman of the Latin American board of Georgetown University, recently donated $10 million to fund the creation of the Beeck Center for Social Impact & Innovation.
Alberto Chang-Rajii founder and sole shareholder of Grupo
Arcano, an international private equity and venture capital firm. ChangRaji, who was raised in Chile, was 27 years old when he incorporated Grupo Arcano. While earning post-graduate degrees in business administration and behavioral sciences at Stanford University, Chang-Rajii in 1996 became one of the early shareholders of Google.
Adriana Cisneros chief executive officer and vice chairman of
the Cisneros Group, a family-owned conglomerate with estimated annual revenue of $1 billion and interests in media, real estate, online commerce, and consumer services and products. She is a third-generation leader at the company, founded in 1925 in Venezuela by her grandfather Diego Cisneros and chaired by her father Gustavo Cisneros. The busy mother of three also serves as president of Fundacíon Cisneros, a nonprofit organization with a mission to improve both education in Latin America and worldwide awareness of the region’s cultural heritage.
Daniel Echavarria managing partner of Ganolian Investments,
a values-based investment firm that backs promising private businesses. Its portfolio of companies include Colombian seafood importer and exporter Antillana, business-to-business travel services company OnTrade, and an online platform called Lenddo that helps people use social connections to improve their creditworthiness and get access to financial services. Echavarria was a co-founder of the pay-per-click advertising network called TeResponda. com, which Yahoo! bought in 2005. He also serves as chairman of the board of Fundacíon Corona, a nonprofit organization that strives to decrease poverty and upgrade the quality of life in Colombia.
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Matt Haggman the Miami program director of The John S. and James L. Knight Foundation, was the catalyst in the foundation’s decision to provide a $2 million grant to Endeavor Global, which allowed the organization to launch its Endeavor Miami affiliate. Haggman is an award-winning journalist who joined the Knight Foundation in 2011 after working as a newspaper reporter for the Miami Herald and the Daily Business Review. He holds a bachelor’s degree from Tulane University and a law degree from Vermont Law School.
Peter B. Kellner one of the two co-founders of Endeavor Global,
is founder and managing partner of Richmond Global, an investment firm that funnels venture capital to technology and communications companies. Kellner is a member of the boards of sustainable waste disposal and recycling services provider Rubicon Global and AdChina Inc., which operates an internet advertising platform in China. The son of Hungarian immigrants, Kellner co-founded the Hungary-based Environmental Management & Law Association, which shapes environmental laws and policies in Central Europe. He has a law degree from Yale Law School and an MBA from Harvard Business School.
Manuel D. Medina founded, built and sold Miami-based data services and storage provider Terremark Worldwide to Verizon Wireless for $1.4 billion. Terremark served a customer base that included leading public companies, US government agencies, and state and municipal governments. Medina now runs Medina Capital, a private equity investment firm with such a portfolio companies including encryption security service Cryptzone, electronic fraud detector and deterrent Easy Solutions, and Catbird, a leader in developing software-defined digital security systems. Medina, who started his career as a certified public accountant with PricewaterhouseCoopers.
Andres Moreno founder and chief executive officer of Miami-
based Open English, a leading online English school in Latin America and the US Hispanic market, with about 70,000 students enrolled. Open English has raised more than $120 million of venture capital since its 2007 startup. Born in Venezuela, Moreno began his career by co-founding a company that provided oneon-one training in the English language to executives of leading public companies including Cargill, Procter & Gamble and Sun Microsystems.
chairman and chief executive officer of the Wolfington Companies, a private equity investment firm with more than a dozen technology-driven portfolio companies, many of them doing business in the automotive industry. He has developed and sold three automotive-related companies for hundreds of millions of dollars to auto dealership software developer Reynolds & Reynolds, payroll processor ADP and AutoTrader.com, an online retail sales platform. He was 34 when professional services firm Ernst & Young named Wolfington a finalist for its annual Entrepreneur of the Year award. He also has a film production company called One Media that has funded such award-winning films as Bella, which won the People’s Choice Award at the Toronto International Film Festival in 2007. E
Laura Mayd贸n, managing director, Endeavor Miami and Peter B. Kellner, co-Founder, Endeavor Global. JUNE/JULY 2014
Eye on the Past Vision for the Future After almost 35 years spent building some of Miami’s iconic properties and global technology facilities, Manuel “Manny” Medina is working on arguably his greatest project to cement Miami’s reputation as a tech hub for the Americas.
By Jeff Zbar | Photography by Gio Alma
Manuel D. Medina Chairman & CEO, Medina Capital Partners
Eye on the Past, Vision for the Future
anny Medina is sitting in his second-floor office in Brickell Key’s Courvoisier Centre with a view down the Biscayne Bay coastline toward some of the projects he has created over the past 30 years. He built the 296-unit Fortune House Miami condominium, Terremark Towers, the namesake of his former development company, and farther down the coast in Coconut Grove, the SBS Tower and the Cocowalk entertainment complex. Not withstanding the millions of square feet he’s built along Biscayne Bay and Miami’s Brickell Avenue corridor, it’s to the north where what is arguably his greatest achievement resides. It’s a bunker of a five-story building that made Medina a boardroom name, and Miami an emerging destination in technology circles. The Network Access Point (NAP) of the Americas is an internet hosting facility used by some of the largest companies in the world. It’s also a NAP that connects the lines of 35 telecommunications companies from across Latin America and the Caribbean to Europe and the US. At one point, it carried 95 percent of the internet traffic across the Americas. Though he sold his holdings, Medina’s work is not yet complete. Dressed in crisp blue jeans and a blue-and-white buttoned-down dress shirt, Medina, 61, enthusiastically discussed his next project. After more than three decades spent building towers and structures, he is developing something different: Miami’s technology reputation. It’s something that’s sorely lacking, and the region remains a tough sell for up-andcoming tech execs and employees. As Medina told it, if a tech grad straight out of college wanted to launch a blue-chip career, Miami was not a stop on that path. People wanted San Jose or Virginia or Dallas, anywhere but South Florida. “If you were a young stud working for a government agency in cyber security, and you 60
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wanted to go into the private sector, you wanted a Silicon Valley address on your resume,” said Medina. “It was always a disadvantage to be in Miami. You couldn’t recruit to Miami. Miami didn’t get respect. But, I knew we could change that.” Changing that reality has been a mission of Medina’s stretching back to the 1990s. That’s when he decided to build a tech data center in downtown Miami, and later the NAP. It blossomed further when he sold Terremark Worldwide, his global development company and the NAP, and conceived the emerge technology conference. The creation of the conference began after a career pause. The sale of Terremark
Worldwide gave Medina a chance for something he hadn’t enjoyed since grade school. It gave him time off. Even when the new owners of Terremark came asking Medina to stay on, he declined. He hadn’t been anyone’s employee since the start of his career at PriceWaterhouse. “I would make a terrible employee,” he said. So, Medina took time to regroup. Having traveled the globe his entire professional life, Medina wanted a retreat closer to home, somewhere that required no passport or border crossings. “I didn’t want to see a plane or a customs agent,” he said. He rented a house in the Florida Keys, went off the grid, and took a sabbatical. He played tennis, fished, and entertained friends. And he started thinking, “What do I want to do with the rest of my life?” recalled Medina.
He began to think about how he could combine his experience in technology, his global contacts, and his vision for Miami’s often over-looked and certainly under-appreciated tech culture. He thought about Art Basel, the annual art festival that had transformed Miami into a global art destination. He thought about SXSW, the music, film and interactive conference annually held in Austin, Texas. Then it came to him—a technology conference that would draw industry visionaries, entrepreneurs and tech leaders to Miami. With two decades’ worth of connections at the highest levels of the technology and innovation sectors, Medina knew he could attract speakers from the likes of IBM, HP, Intel, and others. “SXSW with a Miami twist,” he said. “That’s what I was thinking as I was having a cold Presidente.” Medina created the Technology Foundation of the Americas, with the emerge Americas conferrence as its marquee event. Miami and its tech community would be the beneficiary of the exposure. Those who know Medina weren’t surprised he would have such an epiphany. He’s a tech evangelist, a supporter who backs local accelerators, incubators, and entrepreneurial mentorship programs. He’s a visionary who draws people’s attention and their support. To some, that positioned Medina as the person Miami needed to establish its role on the tech scene, said Jaret L. Davis, comanaging shareholder of Greenberg Traurig Miami and Medina’s attorney dating back to when Terremark did its first stock offering. “His enthusiasm can be contagious,” said Davis. Consider the time Medina first mentioned emerge to Davis. The two were on board Medina’s jet flying to New York for a meeting when Medina had what Davis called one of his magic moments. Medina discussed how Miami needed to attract and mentor the next-generation tech execs, lure capital, and bolster the region’s tech halo. He had an idea that could cement it all in place.
Photo Courtesy of Nova Southeastern University
Medina with his daughter Melissa who heads the Medina Family Foundation.
“That was the final piece of the puzzle,” recalled Davis. “He spent the entire flight talking about the conference.” That flight was almost five decades and practically a world away from the one Medina left behind when he arrived in the US at age 13. He was born in 1952 in Matanzas, Cuba, whose rolling hills are portrayed on a painting behind his desk in his office. He and his family fled the island in 1965. Once here, his mother found work as a hotel maid; his father drove a cab. Medina attended junior college and soon majored in accounting at Florida Atlantic University in Boca Raton. His roommate was fellow Cuban émigré Alberto Dosal. Even back then, Medina was focused as if vision was a path to opportunity. “Looking back, the path from accountant to developer to technology visionary symbolizes his view of his future,” said Dosal, chairman & CEO of Dosal Capital and founder of local tech firm Compuquip. “Manny is an incredibly talented and unusual person. He moves to create something when he sees an opportunity.” Fresh out of college in 1974, he took a job in the Miami office of PriceWaterhouse. The firm was venturing into Latin America and Medina was chosen for a team that was to visit businesses and executives who were looking to invest in the US. While he was building the firm’s name in the Americas, Medina was also building his own network and connections. As he recalled, accounting and PriceWaterhouse were stepping stones. In 1980, he quit the company. JUNE/JULY 2014
LEFT: emerge expo
“The best two decisions I have made in my life were to become a CPA and to join PriceWaterhouse, and to quit Price and get out of accounting. In that order,” he recalled. “I’m not an accountant by devotion. It was a good way to gain credibility.” Terremark, his commercial real estate consulting firm, was thriving. The company not only was advising investors, but also developing projects from condominiums to restaurants and hotels. Global development soon followed, and the newly minted Terremark Worldwide was building public infrastructure, telecommunications, and technology projects in the Americas, Europe, and the Middle East. About the same time, Medina had become fascinated with the internet. It was the mid-1990s, and Medina would find himself working with his children, Melissa and Manny Jr., as they used AOL to do schoolwork and research. The Internet promised to bring about dramatic change. Medina knew he had to be involved, “I like to stand in front of waves.” Medina had spent a decade building regional tech infrastructure, datacenters, and 62
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Diane Sanchez, Executive Director, emerge
hosting facilities for others. So he set out to build one of his own, a datacenter and co-location facility in Miami where companies would house their servers. It would be a 750,000-square-foot, purpose-built structure, whose design, seven-inch-thick exterior walls and 19 million pounds of concrete roof ballast that could withstand a Category 5 hurricane. Servers and sensitive tech hardware would be placed no lower than the second floor to protect equipment from storm surges and rising waters. With construction under way in the late 1990s, Medina heard of a potential bid that could dramatically change his project and mission. A non-profit corporate, education and government consortium was seeking bids to build a NAP to service the Americas. Long considered the gateway to the Americas, Miami seemed a logical choice. Terremark Worldwide partnered on the bid with Telcordia Technologies, which had engineered three early NAPs. In 2000, they made their pitch, and won the contract. What they created was a destination for a massive exchange of connectivity and a nexus for a global technology community. For
Manny Medina and Pitbull at the emerge conference
Terremark, it was a sea change in its business model. This company that had formerly built tech facilities now offered server hosting and an array of internet services for telecommunications companies, businesses, and government. “It was unique,” said Medina. “At the time, nobody had this type of business model.” In 2001, with the opening of NAP, Terremark Worldwide began selling global co-location services. With former Telcordia execs on his team, Medina built a sales force that understood the highly complex telecommunications services firms required. “Terremark became part of the team to run all or part of the infrastructure,” said Medina. Terremark’s product offering connected with the marketplace, especially for companies seeking data security. Over the next decade, Terremark Worldwide grew to 1,000 employees in 13 cities from Miami to Dallas to Santa Clara, California, to offices across Europe, and in Turkey, Brazil, and Colombia. At its peak, the company was doing more than $300 million a year in business hosting technology and internet traffic for multinational companies, mid-sized business, and the US federal government.
Then in 2011, Medina’s exit came. Verizon Communications bought Terremark Worldwide and the NAP for $1.4 billion. To outsiders unfamiliar with Medina, the deal cemented his standing as a technology visionary. But before the sale, many already knew Medina’s name. One executive was Stuart Scholly, former CEO of Prolexic, a Browardbased tech security firm in which Medina Capital, invested. From their first meeting, Medina was approachable and “very humble, considering the success he’s had,” said Scholly, who today is an executive with Akamai, which acquired Prolexic. Scholly wanted the Medina Capital people on his team. “We wanted Medina to have some impact and say in our company,” said Scholly. Medina has also had impact across the community. The Medina Family Foundation, headed by his daughter and Technology Foundation of the Americas Vice President Me lissa Me dina - Sc hnur, w or ks w it h almost a dozen area charities and nonprofits. (Medina’s son Manny Jr., is the bass player with the Nashville-based band Kip Moore.)
Manny Medina backed the SEED School, Miami’s first public boarding school. He’s also been a long-time supporter of the homeless shelter, Camillus House. When others were looking to clear the homeless from downtown Miami, Medina encouraged peers to support the Camillus mission, recalled Bob Dickinson, Camillus chairman and former CEO of Carnival Cruise Lines. “Manny has this way of getting people involved,” said Dickinson. “If you looked up Pied Piper in the dictionary, Manny’s photo would be there.” Medina remains awed by technology, but he’s not a technologist. He’s a developer, but he “couldn’t build a chicken coop,” he joked. As many successful CEOs will admit, his success came from hiring bright people, and infusing them with his vision. Now, he’s hoping to share his vision of Miami as a technology hub with the world. We’re hoping a few years from now when you’re that young hot tech stud,” he said, “you’ll want to come to Miami.” E
LEGAL STRONGHOLD Miami has emerged as a leading center of international arbitration, and signs point to further growth in this out-of-court approach to resolving cross-border commercial disputes.
By Mike Seemuth | Photography by Isaac Zapata
LEFT: Professor Jan Paulsson, the Michael Klein Distinguished Scholar Chair at the University of Miami School of Law JUNE/JULY 2014
orn in Sweden, Jan Paulsson studied in the United States and earned a law degree at Yale University in 1975. International law was his favorite subject, but as a student, Paulsson thought his academic interest would remain just that. He was wrong. One of his first assignments as a new lawyer was wresting tens of millions of dollars away from the government of the late Libyan leader Muammar al-Qaddafi. The Qaddafi regime seized the Libyan subsidiary of a major American oil company called Atlantic Richfield, also known as Arco, without paying compensation. Paulsson, who joined the law firm representing Arco fresh out of Yale, recalls a senior partner scrambling for help with the case against Qaddafi. “He started walking up and down the hall, asking, ‘Is there anybody here who has studied international law?’ I timidly put up my hand.” It was a turning point in Paulsson’s life. He guided Arco to an $80 million award against Libya in 1977 through international arbitration, an out-of-court method of resolving crossborder commercial disputes at neutral sites. He also discovered his professional calling. “I’ve been a lawyer in over 600 international arbitrations and an arbitrator in something like 250,” he said. Professor Paulsson now helps other lawyers learn how to arbitrate, not just litigate, at the University of Miami School of Law, where he teaches an intensive introductory course on resolving international commercial conflicts through arbitration. It’s “like a boot camp,” he said. “It’s every day for three hours, including Saturday.” 66
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Professor Jan Paulsson, the Michael Klein Distinguished Scholar Chair at the University of Miami School of Law His popular course at the UM law school is one of many reasons why Miami is likely to grow further as a venue for international arbitration and compete harder with such established venues as New York City and Paris. “This is kind of a new trend in international arbitration, places that are serious about putting themselves forward as reliable places to have arbitration,” said Paulsson, who heads the newly established International Arbitration Institute at the University of Miami. “I think the stars are aligned for Miami, and this could be something good ... You need capable judges. You need interested lawyers. You need good laws. You need an environment where it is known that arbitration is practiced and arbitration is studied.” Expanded acceptance of international arbitration in Latin America also has helped Miami to develop as a preferred site to hold hearings. For example, if a company in Mexico
has a contract with a company in Brazil and it requires arbitration of a contractual dispute, the parties usually will agree to hold an arbitration hearing at a neutral location in a third country under international law. If one of the parties is a US company, neither Miami nor any other US city is likely to qualify as a neutral site for arbitration. Historically, US companies have been involved in so many international arbitrations that domestic cities rarely hosted the hearings. But “things are changing,” said Paulsson, who in April completed a term as president of the International Council of Commercial Arbitration, which is accredited by the United Nations and has developed a model law on international commercial arbitration. “There are a lot of Asian–Latin American contracts, a lot of European–Latin American contracts, and, no American party is involved,” he said. “And there, geographically,
it makes sense to be in the United States. And Miami is every sophisticated Latin American’s second home. So it seems like the ingredients are here.” Judicial support is another asset of Miami. Last Year, the Miami-Dade Circuit Court created a new international arbitration court—one of only two of its kind in the nation—to compel arbitration and enforce application of proper procedures and collection of awards. Allowing local judges to concentrate on international arbitration can minimize problems that may arise from the complexity of this multijurisdictional field. “One day you might have a case that’s under the laws of Mozambique, the next day it’s the law of Switzerland, the next day it’s the law of Nebraska. It tends to be a fairly intellectual discipline,” said Paulsson.
“You don’t want a judge who yesterday had a child custody case and tomorrow will be dealing with an antitrust application.” Miami also is on the international arbitration conference circuit, which has raised the city’s profile as an educational stage for this generally overlooked niche within the legal services industry. For example, in early April Miami became the first US city in decades to host the biannual conference of the International Council for Commercial Arbitration (ICCA), a prestigious event that attracted more than 1,000 arbitration experts and practitioners from around the world. Miami is also the site of an annual convention organized by the Parisbased International Chamber of Commerce, a leading organization in the administration of international arbitration proceedings.
Miami is a gateway to Latin America and a fast-growing base for arbitration hearings. — Jonathan C. Hamilton Partner, White & Case
Burton A. Landy, Partner, Akerman LLP
WHITE & CASE
COMMIT TO INSTITUTE
In April, international law firm White & Case LLP announced in April a major donation to arbitration instruction at the University of Miami School of Law. White & Case is making what it called a multi-year commitment. The UM Law School has renamed the degree program of the International Arbitration Institute the White & Case International LL.M. Degree Program. The donation from White & Case not only will fund development of the degree program but also endows a scholarship fund and establishes an annual series of lectures by visiting scholars. White & Case created the UM law student scholarship fund for Carolyn B. Lamm, a partner in the firm who graduated UM law school with her J.D. in 1973 and is now a leading attorney in the field of international law and arbitration. White & Case also announced that some of its partners will teach at the International Arbitration Institute. One is Jonathan C. Hamilton, who heads Latin American arbitration. He will serve as a visiting professor and will teach a course on negotiating contracts with parties in different countries. “Miami is a gateway to Latin America and a fast-growing base for arbitration hearings,” said Hamilton. E
Legal Stronghold The biannual ICCA conference was a big catch, said Burton A. Landy, a Miami-based partner in the law firm Akerman Senterfitt, because it is global in nature, drawing not only from nearby Latin America but also from Europe, Asia, and Africa. “It has only come to the US one other time, and that was New York about 28 years ago,” he said. “It is a very extensive, impressive two-and-a-half day program … the last one was in Singapore in 2012.” Landy was part of a group that traveled in 2010 to Geneva, Switzerland, and successfully proposed that ICCA hold its 2014 conference in Miami. “With the help of the Greater Miami (Convention and) Visitors Bureau, we put together a pitch and led a small delegation to Geneva in 2010,” he said. “We did a lot of lobbying … We did it methodically. We had assignments. It was like (competing for) the Super Bowl or Olympics.” In addition to his duties at Akerman Senterfitt, Landy serves as chairman of the Miami International Arbitration Society (MIAS) a professional association that promotes Miami as an arbitration venue. MIAS members and Gustavo J. Membiela, Partner, Hunton & Williams
other supporters campaigned for the international arbitration court that the Miami-Dade Circuit Court established. MIAS supported creation of the International Arbitration Institute under the direction of Professor Paulsson at the University of Miami law school. “We put together a library of treatises and authorities, so they will have that available,” said Landy, calling Paulsson one of the top five arbitration experts in the world and the new UM institute “one of our star assets.” MIAS also pushed for last year’s modernization of Florida’s international arbitration law. The Revised Florida Arbitration Code adds greater certainty to the arbitration process for opposing parties and their legal counsel. The revised statute is based on the key elements of model law for international arbitration that the United Nations has endorsed and jurisdictions around the world have adopted. “One of our colleagues, Eduardo
Palmer, really led the charge on this and did a remarkable job,” said Landy, adding that the widely shared ground rules ensure that “if you have an arbitration in one place or another, you can pretty much expect them to be similar.” “Can more international arbitration work come to Miami in the future? I think it has to increase ... We’re an attractive place to arbitrate,” said Landy, citing statistics from two organizations that administer arbitrations, the International Chamber of Commerce (ICC) and the American Arbitration Association (AAA). “The ICC and the AAA have records of
There has been an increase in the number of companies picking Miami as the seat of the arbitration. — Gustavo J. Membiela Partner, Hunton & Williams
how many arbitrations take place, and Miami is usually number two or three in the US. New York leads,” he said. San Francisco and Los Angeles also rank high nationally. Largely because many Latin American nations have embraced international arbitration, “There has been an increase in the number of companies picking Miami as the seat of the arbitration,“ said Gustavo J. Membiela, a Miami-based partner in the firm Hunton & Williams. “If you have a Spanish client who is building in Panama, and they are using a Costa Rican subcontractor, and the Spanish contractor and the Costa Rican subcontractor get into a dispute, where do you go to court? ... It’s those types of questions that the international arbitration clauses are designed for.” Many Miami-area law firms have the legal talent to answer those types of questions. “I think there is a deep bench of practitioners here in Miami that are doing this type of work, both in terms of attorneys who can handle the cases and attorneys who can sit as arbitrators on these cases and have had years of experience doing this,” said Membiela. Among other law firms, Astigarraga Davis has been doing this for a long time. Astigarraga is probably one of the leading names in the field of international arbitration. “Hogan Lovells also has a significant arbitration practice...Their international Latin American team in the Miami office has been doing this for some time. Then there are also a lot of boutique shops that do this type of work,” said Membiela. Perhaps the biggest driver of international arbitration activity in Miami and around the world is corporate resistance to towering legal bills. To avoid costly court battles, companies often do business together by signing contracts with clauses requiring arbitration of contractual disagreements. Arbitration can be costly too, because the parties must pay for at least one arbitrator, usually three for major disputes, and for the services of the International Chamber of Commerce, the American Arbitration Association, or another organization that administers arbitrations. The International Chamber of Commerce, for example, has “a sliding-scale fee structure, depending on the size of the claim, and it’s escalating,” said Miami attorney Jose M. Ferrer, a partner in the Miami office of Bilzin Sumberg and head of the law firm’s litigation team for matters abroad. “Some of these high-stakes arbitrations are more expensive than the traditional litigation, even though you’re not paying the cost of the judge or the cost of the administration. Those [arbitration expenses] are huge costs,” he said. But time is expensive, too, and opposing parties have more control over the pace of arbitration, which tends to unfold faster than
Jose I. Astigarraga, Partner, Astigarraga Davis
Arbitration is developing as the preferred dispute-resolution mechanism. — Jose M. Ferrer Partner, Bilzin Sumberg
Angelika Hunnefeld Shareholder, Greenberg Traurig traditional litigation, in part because arbitration awards generally are final and not subject to appeal. In traditional litigation, “you’re basically left at the whim of whatever the court’s caseload is,” said Ferrer. Litigation is especially expensive in the US compared to many other countries, because “the American style of litigation is very heavy on discovery, or pretrial evidence-gathering,” said Ferrer. “You’re going to send out interrogatories, requests for production of documents; then you’re going to take 50 depositions ... US lawyers feel comfortable 70
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doing wall-to-wall discovery, even if you’re not going to use 90 percent of it.” Civil litigation accounts for a big share of the legal work handled by Ferrer, who was born in Cuba and raised in Miami. But international arbitration accounts for the bulk of his practice. “Arbitration is 50 to 60 percent of it, and the rest is civil litigation, mostly in federal courts,” said Ferrer, who has served as an arbitrator in addition to representing clients in arbitration cases. “Arbitration is developing as the preferred dispute-resolution mechanism,” he said, though
compared to traditional commercial litigation, “you are not going to get every bit of evidence that you would like to get. That, I would say, is the biggest adjustment.” Other local attorneys have made that adjustment, too. One of them is Angelika Hunnefeld. Like other attorneys who practice international arbitration, she started her legal career in civil litigation. International arbitration is now a major part of her practice as a Miami-based shareholder of Greenberg Traurig. She said Miami could become an even bigger center of international arbitration, citing the
Arbitration’s growth in the last 10 – 15 years is in no small part related to the phenomenon of globalization and that’s only increasing with time. Miami is perfectly positioned.
— Eduardo Palmer Partner, Eduardo Palmer Attorneys P.A.
city’s large community of bilingual and multilingual professionals. “I believe there’s a lot of potential ... I can tell you South American companies are getting more comfortable with Miami,” she said. Her first language is Spanish, and “that has been a very valuable skill,” said Hunnefeld, who graduated magna cum laude with a law degree from the University of Miami in 1995. She also speaks conversational French and Portuguese. Miami has benefited from widespread acceptance of international arbitration in Latin America over the last 20 years or so. Many countries in the region previously rejected submission to foreign courts and foreign state-run businesses in the 1980s and a flurry of liberalized trade agreements in the 1990s, including the North America Free Trade Agreement (NAFTA). “All of a sudden, you start having more business activity in Latin America,” said Jose I. Astigarraga, name partner in Miami law firm Astigarraga Davis, which concentrates on international arbitration and other types of commercial dispute resolution. “We’ve had almost 100 years of very strong arbitral law in the United States. That was not the case in Latin America.” Astigarraga’s law firm is part of an arbitration ecosystem in the Miami area that extends beyond law firms. He said that in addition to a cadre of attorneys who concentrate on international arbitration, Miami also has a solid core of ancillary support services, including “the infrastructure of hotels, interpreters, court reporters, and a reliable court system.”
About 10 years ago, Astigarraga was one of the leaders in a successful campaign to prevent the Florida Bar Association rule from restricting the ability of foreign companies to use foreign lawyers to conduct international arbitration in Miami and other cities around the state. “If Florida would have enacted that rule, it basically would have been the kiss of death for the arbitration practice in Florida,” said Astigarraga. Latin American companies, for example, would have been unable to use their own Latin American general counsel or outside counsel to arbitrate in Florida. He said foreign companies instead would have decided “to go to New York or Paris, where they can use any lawyers they want.” One sign of Miami’s new prominence as an international arbitration site is its selection as a resolution venue for a dispute between Panama and the construction consortium that is increasing the capacity of the Panama Canal. The Wall Street Journal reported in February that an arbitration tribunal in Miami will make the determinative ruling on the parties’ dispute over $1.6 billion of construction cost overruns. In an article he wrote for the April 2, 2014 issue of the professional publication Corporate Counsel, Astigarraga said that rather than “placing Miami on the arbitration map, the city’s selection as the venue for the Panama Canal dispute confirmed its overlooked status as an increasingly popular venue for contractual arguments between foreign countries.” Coral Gables attorney Eduardo Palmer, who also concentrates on international arbitration, said he expects international business activity
to continue to increase, adding further to the business world’s need to arbitrate arguments over contracts. “Arbitration’s growth in the last 10 - 15 years is in no small part related to the phenomenon of globalization and that’s only increasing with time,” said Palmer. “Miami is perfectly positioned.” Palmer has been a leader in positioning Miami for more international arbitration activity. Four years ago, he led a successful lobbying campaign to convince state lawmakers to adopt a model arbitration law developed by the United Nations. In 2010, Florida became one of the first US states to adopt the model law known as UNCITRAL, short for the United Nations Commission on International Trade Law. Last year, he led another successful campaign to convince lawmakers to update the state law by codifying court-approved practices that existed in common law. Other cities, too, are positioning themselves to become bigger centers for international arbitration. So when Palmer successfully lobbied legislators last year to update Florida’s arbitration law, he emphasized that the economic stakes were high not just for the legal profession but also for trade and tourism. “This helps our local economy,” said Palmer. “The teams of lawyers who come here from all over the world—maybe four or five counsel, a couple of assistants—they’ve got to stay in hotels, they’ve got to go to restaurants, take cab rides. They hire local court reporters, interpreters, and people who specialize in preparing exhibits for arbitration hearings. And so, there’s an enormous ripple effect throughout our economy.” E JUNE/JULY 2014
The Three Billion Dollar Man By the time University of Miamiâ€™s Momentum2 fundraising campaign concludes, Sergio Gonzalez, senior vice president of university advancement and external affairs, and his team will have raised $3 billion for the University.
By Laura L. Myers | Photography by Jorge Parra
TOP ROW LEFT TO RIGHT: Anne Levy, Senior Development Director, Major Gifts; Susan T. Jones, Associate Vice President for Development; Rudy Fernandez, Vice President for Government and Community Relations; Monica S. Inguanzo, Executive Assistant to Sergio M. Gonzalez; Donna A. Arbide, Associate Vice President, Alumni Relations and Individual Giving. BOTTOM ROW LEFT TO RIGHT: Naomi D. Nixon Esq., Associate Vice President for Central Development; Jacqueline Menendez, Vice President, University Communications; Sergio M. Gonzalez, Senior Vice President for University AdvancementÂ and External Affairs; Ann L. House, Associate Vice President, Advancement Services. Mary Ann Sprinkle, Associate Vice President for Medical Development and Alumni Relations. 72
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The Three Billion Dollar Man
niversity of Miami’s fu n dr a i si n g d r i v e s a re immeasurably more sophisticated than in 1929, when students collected money, door to door in Coral Gables. The 1926 hurricane and ensuing Florida land bust hit the university hard. When the nation’s stock market crashed, so did $15 million in University pledges. Today, University of Miami ranks tops in Florida among universities and colleges—and 36th in the nation in higher-education fundraising campaigns. Its Momentum 2: the Breakthrough Campaign for the University of Miami fundraising campaign, launched in 2012, is targeting a $1.6 billion goal by 2016. Harvard University is No. 1, seeking to raise $6.5 billion by 2018, according to the Council for Advancement and Support of Education (CASE). So far, the University’s chief fundraiser Sergio Gonzalez, 50, and his team have raised $1.3 billion of the $1.6 billion. Gonzalez, senior vice president of university advancement and external affairs, will then be responsible for raising an unprecedented $3 billion—a goal set by Donna Shalala, the University’s president since June 2001. “We’re 80 percent there in 60 percent of the time allotted,” said Shalala. “We may reach it early.” The initial Momentum campaign, from 2001 to 2007, exceeded its original $1.25 billion goal, ultimately raising $1.4 billion. Shalala’s mission, driven with the force of a hurricane, has helped propel the University into one of the nation’s top 50. 74
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Sergio M. Gonzalez, Senior Vice President for University Advancement and External Affairs Today, University of Miami ranks No. 47 of Best Colleges in U.S. News & World Report’s latest survey. Its highest ranking was No. 38 in 2012. “At the crux of all this success is raising money,” said Gonzalez, a lawyer hired by Shalala 13 years ago as a non-traditional fundraiser who was determined to elevate philanthropy in the minds of donors. “We did a lot of listening on how to make a difference. The University’s success has transitioned to a greater success in general to all of South Florida,” said Gonzalez. “We’re in the business of facilitating partnerships where people feel good at the end of the day.” Emotional triggers often open up philanthropic bank accounts,” he said. “Listen, first and foremost. Understand where affinities lie. And understand that most folks want to impact lives. When you build relationships, most people will not say no.”
“Fundraising is primarily an art, with a little bit of science,” added Gonzalez. “I believe in giving back to our donors as much or more than they give to us.” Shalala’s Vision
With Momentum2, $580 million is earmarked for faculty support and research; $470 million for programs and general support; $340 million for new buildings and facility improvements; and $210 million for scholarships and student support. Before hiring Gonzalez, Shalala conducted a nine-month search to pinpoint an executive who had Miami-Dade’s most powerful database of contacts. Gonzalez served as chief of staff to former Miami-Dade County Executive Mayor Alex Pinellas and directed the South Florida Super Bowl Host Committee, and the Miami-Dade County Homeless Trust.
Fundraising is primarily an art, with a little bit of science. I believe in giving back to our donors as much or more than they give to us.
— Sergio M. Gonzalez He is also a board member of The Adrienne Arsht Center for the Performing Arts. He’s a 1999 Henry Crown Fellow at the Aspen Institute, which selects 20 entrepreneurial leaders between the ages of 25 and 45, per annual class. Gonzalez currently serves as a Board of Trustees member for the Council for Advancement and Support of Education (CASE) and is recognized globally for sharing fundraising’s best practices, said John Lippincott, the group’s president. “Sergio Gonzalez is one of those rare individuals who are at once gentle and decisive, humane and strategic, humble and wise, community-oriented and worldly,” said Lippincott. The politically-connected duo of Shalala and Gonzalez could be considered unique. Shalala, with close ties to Bill and Hillary Rodham Clinton, was the longest serving Secretary of Health and Human services in US history.
Gonzalez is high-energy and a good listener who “genuinely cares about colleagues and donors. He asks good questions,” said Mary Ann Sprinkle, University associate vice president for medical development and alumni relations. “He knows this community. He and Donna Shalala are, simply put, a powerhouse duo.”
Miller Medical School
The University’s Miller School of Medicine ranks No. 46 in the U.S. News & World Report’s 2015 ranking of Best Graduate Schools, jumping from No. 56 in 2008, in the annual ranking of top medical schools for research. The medical school’s goal is $1 billion of Momentum2’s total $1.6 billion. “We have a new directive from our president and dean to help junior faculty get much needed funding as well as to help investigators in the basic sciences, public health sciences and
those doing stem cell, genomics, and genetics research get much needed support,” said Sprinkle. So far, the med school has raised $778 million of its goal.
Philanthropist’s View Philanthropist Paul DiMare, president of the nation’s top tomato grower, Homestead-based DiMare Brothers Inc., and wife Swanee, as the campaign’s vice chairs, through their Paul J. DiMare Foundation, pledged $12.5 million to Momentum2. Half of that is earmarked for the medical school, with $6 million dedicated for medical school scholarships; $1 million for paralysis research; and $500,000 for regenerative stem cell research. The $6 million gift was inspired by nearly 30 top potential med students who received bigger scholarships and financial aid packages from other schools. JUNE/JULY 2014
The Three Billion Dollar Man
LEFT: University of Miam medical building
Florida’s Tops Throughout the nation, university fundraising is big business and highly competitive. In April, Dartmouth College, for example, received an anonymous $100 million donation, the largest in its 244-year history. But University of Miami achieved this same milestone a decade ago. In 2004, the family of Leonard Miller, a longtime South Florida philanthropist and founder of Lennar Corp., made a $100 million gift. The University’s School of Medicine was renamed the Leonard M. Miller School of Medicine. 76
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RIGHT: University of Miami biochemical research building
The Miller gift ranks as Florida’s second l a r g e s t t o w a rd h i g h e r e d u c a t i o n , behind $220 million donated by Thomas Monaghan to fund southwest Florida’s Ave Maria University. Today, local Catholic university, St. Thomas University, is undertaking a $100 million capital campaign. It raised $18.5 million in the last 18 months. “People are giving more and more money to education as partnerships,” said Beverly Bachrach, St. Thomas’s vice president for university advancement, marketing and communications. “People don’t like colleges and universities to be isolated anymore.” Because of the state’s current influx of wealthy entrepreneurs and retirees, “you never really run out of donor prospects,” said Bachrach. The University of Florida completed a $1.7 billion campaign in 2012, according to CASE. FIU is currently undertaking a $750 million campaign, while Nova plans to build an $80 million Center for Collaborative Research.
Alumni Donors There are about 184,000 alumni in the history of the University of Miami, first chartered in April 1925 with 370 students. Alums live in 50 states and 154 countries. More than 89,900 live in Florida, with 49,600 in Miami-Dade County. So far, more than 39,000 alumni have donated over $224 million to Momentum2. “My mantra is, ‘Our best prospects are our current donors,’ ” said Gonzalez. The University’s Loyalty Society celebrates consistent donors through recognition at luncheons, receptions, and dinners, said Donna Arbide, University associate vice president, alumni relations. “Affinity engagement and fundraising allows us to have more intimate conversations with alumni about how they want to connect,” said Arbide. About 37,800 alumni donated $376 million during the initial Momentum campaign.
Photos Courtesy of University of Miami
“We’ve lost students because of aid-based needs,” said DiMare. “You have to get the best students. Many will stay here in the community.” Gonzalez added, “Paul and his wife Swanee acted on the challenge through what is now UM’s largest medical scholarship gift. This generous act reinforces Paul and Swanee’s leadership, philanthropy, and support for the University.” Included also in DiMares’ gift is $2 million for a 200-seat musical performance hall; $1.5 million for athletic scholarships; and $1 million to the Schwartz Center for Athletic Excellence.
RIGHT University of Miami music library
LEFT: University of Miami gardens
Change Agents Wealthy donors, sophisticated about philanthropy, are seeking specific goals rather than mere name recognition, said Susan Jones, University associate vice president for development, who oversees the University’s largest donors. “A trend we’re seeing is a desire to be a change agent,” said Jones. Change agents believe in making a difference “by putting their money where their mouth is.”
Parental Giving Today, typical parents of University students are in their mid-40s and 50s. Many are adopting giving patterns similar to those of successful alums. “Today’s student families—overseen by helicopter, umbrella, or Black Hawk parents— are deeply engaged in their children’s lives,” said Anne Levy, University senior development director, parent relations.
Increasing trends of giving by parents prompted the creation of an invitationonly Parents Council. “Parents really do feel they’re part of the university,” added Levy.
Today’s Students No longer is University of Miami known as “Suntan U” for its laid-back academic climate and Miami’s sunny beaches. Many of the University’s 17,000 students come from well-heeled families who value education. Today, the average SAT score of freshmen is 1331, up from 1100 in the last decade. Half of the University’s freshmen graduate in the top 5 percent of their high school classes. Annual undergrad tuition—including room, board, and fees—is $55,166, with an additional estimated $5,740 cost for travel, books, and personal expenses. “The degree I received 30 plus years ago is worth way more today than it was then,” said Jacqueline Menendez, vice president for communications.
The University offers 110 bachelors, 103 masters, and 62 doctoral programs. In fall 2014, it will also offer four new oneyear specialized master’s programs in business analytics, economics, finance, and international business.
International Recruitment Nearly 15 percent of the University’s students are international, the highest percentage of South Florida’s post-secondary schools, according to the National Center for Education Statistics. By contrast, St. Thomas University has about 9 percent. International development is “an emerging focus that’s part of a national trend,” said Naomi Nixon, association vice president of central development. “It’s a natural for us. We have a new crop of parents from South and Central America and the Caribbean,” said Nixon. Gonzalez’s team is targeting new University and corporate partnerships in South America— Columbia, Brazil and Argentina—and in Asia with alumni events, lunches and receptions, said Nixon. JUNE/JULY 2014
The Three Billion Dollar Man
The University has secured more than $300 million in public funding since 2007, under Rudy Fernandez, Shalala’s chief of staff and vice president for government and community relations. Fernandez was a special assistant to the President in the White House Office of Intergovernmental Affairs under President George W. Bush and worked in the US Department of Transportation.
While Gonzalez may be considered a soft touch, his focus is laser-sharp when it comes to setting, and achieving, financial targets. “A set of metrics is produced for each major gift fundraiser,” said Ann House, University associate vice president advancement studies. “Progress toward each goal is measured periodically for benchmarks such as cash amounts raised, campaign commitments, and number of donor calls and solicitations,” she said. “We
need to understand industry best practices, be nimble and deliberate in our actions and deliver the best possible customer service to our donors, alumni, and internal constituencies.” “Momentum2 is a bold and ambitious campaign that will impact the region,” said Ed Moore, president of the 31-member Independent Colleges & Universities of Florida, representing 155,000 students. So will Shalala raise the bar if Gonzalez and his team bank the $1.6 billion Momentum2 goal ahead of schedule? “I’m fine with $1.6 billion,” replied Shalala. E
Photos Courtesy of University of Miami
LEFT: University resident halls on the lake BELOW: BankUnited center
BELOW: University of Miami’s seal
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ABOVE: Jeff Corwin filming an episode for his show Ocean Mysteries with Jeff Corwin at Little Salt Spring, managed by The Rosenstiel School’s Division of Marine Affairs
CONSTRUCTION CAPITAL In Coral Gables, the sound of jackhammers signals how far the University has grown since the Great Depression. In the late 1920s, classes were held IN the Anastasia Building. Originally a hotel, flimsy partitions separated classrooms then, giving the University of Miami the nickname Cardboard College. To have a University of Miami building named after a family, a donor must give 51 percent of the cost of the building, according to University guidelines.
Rosenstiel School The Rosenstiel School of Marine and Atmospheric Science on Virginia Key opened its long-awaited $47 million, 86,000-squarefoot Marine Technology and Life Sciences Saltwater Complex. The complex has the world’s only windwave storm-surge simulator that’s capable of generating a Category 5 hurricane. Researchers study living marine animals and fish and conduct coral research. Scientists focus on climate change, ocean acidification and reef-building processes. A new Alfred C. Glassell Jr. Surge-StructureAtmosphere Interaction research facility was funded with a $15 million federal American Recovery and Reinvestment Act grant and $5 million from the Glassell Family Foundation. The complex includes a National Resource for Aplysia, the world’s only facility to culture and raise sea hares for scientific research in human aging, memory, and learning. Glassell, a Texas oilman who died in 2008, was a renowned sports fisherman who caught a 1,560-pound black marlin in 1953 in Peru.
UHealth Facility Groundbreaking takes place this summer on a new ambulatory, 200,000-square-foot UHealth facility in Coral Gables. It will have urgent care, outpatient surgery, physical therapy, diagnostic imaging, and radiation oncology.
Students from Rosenstiel School of Marine & Atmospheric Science The facility, will also have Sylvester Comprehensive Cancer and Bascom Palmer Eye Institute services. Its cost has not been released.
Music Studios Construction of the new Patricia Louise Frost Music Studios, with 82 chamber and teaching studios began in February 2014. The new Universal Music U initiative is set to offer a new master’s in performance degree, with innovative classes in concert programming, long-term career development, entrepreneurship, touring, stage presence, and business management. Philanthropists Patricia Louise and Phillip Frost, who invented a skin biopsy device and created and sold pharmaceutical companies, fund the complex.
Student Activities A stunning $46.5 million, 119,000-square foot student activities center, funded through a $20 million Fairholme Foundation gift, opened in August 2013. The foundation, overseen by philanthropist Tracey Berkowitz, is the charitable arm of Fairholme Capital Management run by financier Bruce Berkowitz, Tracey’s husband. The three-story center, co-designed by Miami-based Arquitectonica, overlooks Lake Osceola with an outdoor events terrace; meeting, conference and event space for
800; suites for student organizations; journalism news rooms; a Starbucks, food court, and Rathskeller. Whitten University Center also has had renovations to its swimming pool, terraced patio, performance stage, and public spaces.
Career Center A 6,000-square-foot Patricia Toppel Career Center was dedicated in February 2014, with computers and interview suites. Ceiling-mounted miniature cameras record mock job interviews. Toppel was funded by alumna Patricia Toppel with an undisclosed donation. Husband Harold, who died six years ago, was the founder of Xtra Super Food Centers.
Jewish Life A $2.5 lead donation will help rebuild the Hillel center. It is expected to be completed by summer 2015. It will be renamed the Braman Miller Center for Jewish Student Life, after family members of billionaire car dealer Norman Braman.
Bass Bricks School of Law aluma Hilarie Bass, a U trustee and Greenberg Traurig law firm co-president, made a $1 million commitment to renovate the law school’s central gathering area. E
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F r e s h C a p i ta l By Richard Westlund | Photography by Gort Productions
The resurgence of the US economy in recent years has created a unique opportunity for entrepreneurs and business owners. The boom means that now may be a good time to look for capital to grow or expand a business. Today, there are a handful of private equity and venture capital firms in South Florida that provide both financing and managerial talent to support a company’s growth plans or provide an exit strategy for an entrepreneur. In general, these firms build a pool of funds from high-net-worth individuals, family offices, and institutional investors, and then look for opportunities to put the money to work. Private equity firms usually make large investments as high as $100 million or even billions for large companies while venture capital investments are smaller and often below $10 million for early-stage companies. But it’s not all about the money. Private equity and venture capital firms also serve as advisors helping to find additional talent, or create and execute a strategic plan that could double or triple a company’s sales. “While small business is a significant driver of US economic growth, it’s hard for investors to access this asset class except through a private equity firm,” said Derek A. McDowell, managing partner of Boyne Capital Partners. “It’s an investment area with significant risk, but when you do it well there are significant rewards for the community, as well as the business and the investors.” Here is a closer look at five South Florida firms—each with its own distinctive approach to the equity capital marketplace.
Antares Capital Corp.
hen discussing potential venture capital investments with a successful entrepreneur, Jonathan I. Kislak and Randy Poliner take a CEO-to-CEO approach. “Both of us have been CEOs of fast-growing companies,” said Kislak, managing partner, Antares Capital Corp., a venture capital firm in Miami Shores. “That perspective lets us share ideas when we sit down with the owner and talk about what’s coming around the bend.” Since its founding in 1993, Antares has helped more than 30 businesses take their companies to the next level with an injection of private equity funding. “Our strategy is to look for entrepreneurs who have built a company with at least $1 million to $10 million in annual sales with a stable base of customers,” said Kislak. “That scenario offers a good opportunity for growing the business with a modest amount of fresh capital.” Poliner, who founded Macrodyne, an instrumentation and signal processing company, prior to becoming active in the venture capital sector, established Antares. Kislak joined the firm in 1999 after operating Kislak Capital Corporation. Previously, he led the J.I. Kislak Mortgage Corporation and served as deputy undersecretary for small community and rural development in the George Herbert Bush administration. “When we make an investment, we usually sit on the board, but don’t play an active role in management,” said Kislak. “We try to provide an ‘Indian guide’ service to our portfolio companies, staying
in the background so the founders and managers get due credit for their achievement.” Antares typically holds about five diverse companies in its investment portfolio, which currently includes a property casualty insurance administrator, a logistics company, an online lead generation firm for rental apartments, a commercial bank, and an original equipment manufacturer (OEM) of medical test equipment. “While there are venture capital firms that concentrate in a single industry, we look for diversity,” Kislak added, noting that the firm focuses on Florida, Texas, and the rest of the Southeast. Noting that Antares does not get involved in turnaround situations, Kislak said an injection of equity capital is important for small businesses that may not yet qualify for standard commercial bank loans. Once an investment is made, Antares may hold its position for several years. “Most of our exits are strategic purchases by larger companies,” he said. “Today, it’s hard to find good equity investments, so if a company in our portfolio is growing and prospering, we are usually in no rush to sell.” Most investors in Antares’ venture capital funds are small institutions and high-net worth individuals. “We have a traditional model, drawing money as we find deals and returning money to our limited partners as we sell deals,” said Kislak. “If you had invested with Antares since 1993, you would have made more than 20 percent IRR (internal rate of return) annually. We are proud of that success.” E
Today it’s hard to find good equity investment, so if a company in our portfolio is growing and prospering, we are usually in no rush to sell. — Jonathan I. Kislak
LEFT: Jonathan I. Kislak, Managing Partner JUNE/JULY 2014
Boyne Capital Partners
BP Foods is one of the nation’s fastest growing fast-food franchises—thanks to the injection of funds from Boyne Capital, a private equity firm in Miami that invests in companies with high growth potential. “We helped a young manager buy out the majority owner, who wanted to retire,” said Derek A. McDowell, managing partner of Boyne Capital Partners. Since then the Kansasbased company has grown from 65 to 227 Kentucky Fried Chicken (KFC) and Taco Bell restaurants. “Their team has done an excellent job identifying new acquisition targets while remaining focused on operational excellence and value creation.” It’s a success story that Boyne Capital has repeated many times since its founding in 2006. Last fall, the private equity firm helped Family Private Care, a home care services company based in Hobe Sound, acquire Care Services Group and expand its geographic reach along Florida’s east coast. Four years ago, Boyne invested in Miami Lakesbased Catalina Lighting, which had gone into bankruptcy, and brought it back to life as Evolution Lighting. “We help good companies facing challenging situations,” said McDowell, whose partner Charles Hanemann is also active in the investment process and management of the firm’s portfolio. “It might be a tur naround, an acquisition opportunity, a corporate divestiture or the transfer of ownership from one generation to the next. We enjoy partnering with owners of businesses in Florida and throughout
the southeast that have a solid revenue stream and provide value to their customers.” Prior to founding Boyne Capital, McDowell had extensive equity investing experience from previous positions with Trivest, H.I.G. Capital Management, Continental Illinois Venture Corporation, and Corporate Value Associates. His goal was to provide capital and management assistance to lower middle market companies with $2 million or more in annual cash flow. In each case, Boyne’s managers serve on the company boards as active mentors and coaches. “We have built a deep bench of marketing, operational, and financial executives,” he said. “Our team has experience in many industries, enabling us to invest in a wide range of opportunities.” The firm’s areas of investment range from healthcare to consumer products, financial services, government, IT services, quick-service restaurants, and casual dining. Other current members of the Boyne Capital portfolio include two Florida companies: AmeriFactors Financial Group, an accounts receivable financing company in Celebration, and Crispers, a Davie-based soup, salad, and sandwich restaurant chain. Boyne Capital’s exit strategy varies from investment to investment, added McDowell. “We help our companies move toward their objectives and we are flexible as to how long we want to hold our position. We invest for the long-term and believe in helping them to maximize value by focusing on business fundamentals.” E
We help good companies facing challenging situations. — Derek A. McDowell
LEFT: Managing Partners Charles J. Hanemann and Derek A. McDowell JUNE/JULY 2014
León, Mayer & Co.
We make controlled investments in corporate and real estate assets that are underperforming compared with their full potential. — Andro Nodarse-León
ack in 2005, Andro Nodarse-León and Benjamin Mayer formed León, Mayer & Co. as a private equity and investment banking firm. But the two financial professionals, who had been friends at The Wharton School of Business at the University of Pennsylvania, found their timing was off. “We were already in an overheated market,” said Nodarse-León, managing partner of the firm, which has offices in Miami and New York City. “While we were eager to do deals, we remained very disciplined, and focused on the fundamentals.” That conservative approach paid off, and the firm began to grow by helping clients restructure their businesses or raise new capital. In 2009, the firm handled the sale of Verification Bureau to LPS (Lender Processing Services), a public company in Jacksonville that recently changed its name to Black Knight Financial Services. “Our client’s business was founded by young entrepreneurs who had developed identity verification systems for major banks in the US,” said Nodarse-León. Unlike many private equity firms, León, Mayer & Co. focuses on real estate as well as business operations. Nodarse-León—a native of Cuba who came to Miami at age 12—has a background in investment banking at Goldman, Sachs & Co., and worked at Kohlberg Kravis Roberts & Co. (KKR) in New York. Mayer—who shares Nodarse-León’s entrepreneurial spirit—worked in commercial real estate at Meridian Property Company in California and Tishman Speyer in New York. “We make controlled investments in corporate and real estate assets that are underperforming compared with their full potential,” said Nodarse-León.“
Once we make an investment, we focus on aggressively improving the operating performance of the asset we have acquired over a fiveto seven-year period.” In 2012, León, Mayer & Co. launched a major private equity initiative in the education sector, teaming with partner Ricardo Campo to launch Endeavor Schools, a growing collection of pre-K to 12th grade private schools in major US markets. “We wanted to leverage our industry knowledge and experience,” said Nodarse-León. “We attracted investment capital from several sources, primarily family offices, and put in money ourselves.” Endeavor Schools acquired two Montessori schools in Atlanta, followed by a third school in Las Vegas, and more transactions are now in the works. “Our plan is to add five to ten assets a year to that platform,” said Nodarse-León. “We are one of the few players at scale buying both the operations and the real estate. We believe that strategy provides us with better liquidity and we are very comfortable owning an asset with two components.” Nodarse-León noted that the boutique firm is not limiting its investments to the educational sector. “We are very interested in the hospitality market, as well as other corporate opportunities,” he said. “We are building a team with multiple areas of expertise, such as technology, media, consumer services and communications.” The firm now has eight employees, plus an active paid internship program with the University of Miami School of Business. “Entrepreneurs play a key role in our economy,” said Nodarse-León. “It’s a pleasure to help them build successful businesses.” E
LEFT: Founders and Managing Partners Andro Nodarse-León and Benjamin Mayer JUNE/JULY 2014
Pine Tree Equity
eff C. Settembrino has a solid strategy for making private equity investments in smaller businesses. “We believe in the importance of partnering with the founding entrepreneur who is the driving force for growth,” said the founder and managing partner of Pine Tree Equity in Miami. “We don’t want to turn the steering wheel left or right. We want to step on the gas.” Since launching Pine Tree Equity in 2007, Settembrino has guided the firm through 24 acquisitions and five business exits, with the founding entrepreneur typically holding a minority or majority stake in the company. In February, the firm invested in BPI sports, a Hollywood company that develops and markets sports nutrition supplements, leaving its two founders in control of the business. “Pine Tree only invests in service companies in order to scale the operations quickly without the costs of purchasing manufacturing equipment,” said Settembrino. “We don’t invest in capital intensive or research and development intensive businesses or start-ups.” Instead, Pine Tree focuses on businesses from $10 million to $50 million in sales or $2 to $6 million in annual cash flow. “Small business owners have been ignored by the large private equity funds,” he said. Noting that Pine Tree has $200 million of equity capital under management, said Settembrino, “We believe a key driver of continued success is the alignment of interests, and our investment team makes significant personal investments in every transaction.” Once Pine Tree makes a financial investment, it brings in human capital as well. “We often recruit C-level executives from larger businesses
to bolster the company’s bench strength,” said Settembrino, who serves as chairman of the board in all portfolio companies. “We also put in financial reporting and analysis systems to identify any inefficiencies and set the stage for growth.” With that foundation in place, Settembrino guides the company’s strategy, which might mean opening new offices or acquiring complementary or competitive businesses in other markets. “We can take regional success stories and make them super-regional or national,” he said. For example, Pine Tree invested in Hi-Tech Testing, which provides radiography services to check the integrity of welds in oil and gas pipelines. Run by a father-son team, the 2010 transaction allowed the father to “cash out,” and the son to take over day-to-day operations. After two years, the company entered four new markets and more than quadrupled its sales before Pine Tree exited its investment in 2012. Settembrino said Pine Tree’s investors are willing to be patient for their returns. “Our funds have a longer than normal hold to allow a small business to grow. That process takes more time than middle market firms.” Prior to founding Pine Tree Equity, Settembrino was a principal of Trivest Partners. He started his career as an investment banker in the 1990s with Bear Stearns. As for choosing the name of his firm, Settembrino said, “The pine tree is an evergreen that grows throughout the year. It’s a fitting symbol for our investment philosophy.” E
We don’t want to turn the steering wheel left or right. We want to step on the gas. — Jeff C. Settembrino
LEFT: Jeff C. Settembrino, Founder and Managing Partner JUNE/JULY 2014
roy D. Templeton has been thinking about business and finance all his life. “While some kids wanted to be football or baseball players, I knew as a child that I wanted to own a business,” he said. “That’s why being in private equity is so much fun for me. I’m always learning something new. Today, Templeton is managing partner of Trivest Partners, a private equity firm in Coral Gables that focuses on founder and familyowned middle market companies with annual revenues between $25 and $250 million. Established in 1981, Trivest is the oldest private equity firm in the southeast US, according to Templeton. “We have never strayed from our strategy of investing in small, privately held businesses and helping them grow.” In April 2013, Trivest closed a $415 million equity fund (Trivest V) primarily from institutional investors such as corporate or public pension funds, foundations, and universities. Since Trivest seeks to double or triple the size of the business, an average holding period for its investments is around five years. To date, Trivest has invested in more than 200 companies in a wide range of sectors, including consumer products, niche manufacturing, distribution companies, and business services. The firm has 22 professionals, including Templeton, who joined Trivest 25 years ago.
“Our goal is to be a partner of choice for the founder,” said Templeton. “Some want to exit the business, but the vast majority of owners prefer a gradual transition. They don’t want a big company to come in and close down their shop, get rid of employees, or change the culture. Our approach at Trivest lets them have the best of both worlds—obtaining liquidity for their families and estates while continuing to be involved as a board member or a hands-on CEO.” Trivest’s current portfolio includes 16 companies, including: DirectBuy, AM Conservation, Ellery Homestyles, and Ryko Solutions. Thanks to funding from Trivest, Delray Beachbased Twin-Star International has become the largest seller of electric fireplaces in the nation with a sales increase from $85 million to $240 million in five years, said Templeton. Last year, Trivest set a record with nine new investments, including a regional seafood distributor, and is now working with several other companies. To find candidates, Trivest draws on a database of 10,000 companies and actively seeks referrals from other professionals. “We know that small businesses are the growth engines for the American economy,” said Templeton. “Our focus is on people, not formulas or financial models. To be successful, we have to understand the personality and goals of the owner. But we always put the company first—when we do that, the founder and our investors all do well.” E
We have never strayed from our strategy of investing in small, privately held businesses and helping them grow. — Troy D. Templeton
LEFT: Troy D. Templeton, Managing Partner JUNE/JULY 2014
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Hunton & Williams 15th Anniversary Hunton & Williams LLP celebrated the 15th anniversary of its Miami officeÂ hosting a cocktail reception at the Perez Art Museum of Miami.
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Nova Southeastern University 25th Annual Entrepreneur Hall of Fame The H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University hosted its 25th Annual Entrepreneur Hall of Fame program.
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he above isn’t a photo spread from the Restoration Hardware catalog. It is the office of Jose Dans, president of the full-service marketing and special events agency wowfactor. When Dans was adding the third floor to his current townhouse-like office in Coral Gables, it was his intention to make the space feel more like a living room than an office. “I spend a lot of time here and I wanted it to feel like my home,” said Dans. “Business is more about sitting down and talking. The right setting helps to build a strong relationship with clients.” Dans stages his office like he creates a special event—attending to even the smallest of details. The wowfactor team is responsible for many of the area’s best galas, including those for the Patricia and Phillip
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Frost Museum of Science, Miami Children’s Hospital Foundation, and Jackson Memorial Foundation. In addition to wanting visitors to feel comfortable, Dans wants guests to have a full-sensory experience. He has a special scent pumped in through the air-conditioning. (The type of scent depends on the season.) And when you are in his office you can expect to be offered a cup of Cuban coffee; but not just any cup, wowfactor coffee is made with a special recipe including a specific blend of condensed and evaporated milk. “We sell experiences. We want to engage all of the senses. We want people to feel a particular way when they come to either our events or our office. Our ultimate goal is to get people to say, ‘Wow.’” E
Photo by Jorge Parra
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