E.M. Warburg Pincus & Co.

A description of the firm from DSP Merrill Lynch: "Warburg Pincus is today one of the largest and most established private equity investment firms in the world. It raised its first private equity fund in 1971 and has since raised eight private equity funds totaling US$11.3 billion. It is also one of the largest private equity investors in India with a portfolio of over $300 million. Currently, Warburg Pincus has over US$11 billion invested in more than 420 companies, providing equity capital across the life-cycle of the enterprise, from start-up through growth financing to acquisitions and restructuring. Operating from 8 offices around the globe covering North America, Europe, Asia Pacific, and Latin America, Warburg Pincus maintains a distinctively long-term and active investment style, deep expertise in key industry sectors including financial services, media and communications, healthcare and information technology. Its past and present portfolio of investments includes companies such as Mellon Bank, Intuit Inc., BEA Systems, Veritas Software, HDFC and Bharti Tele-Ventures Ltd."

Regarding health care, that "deep expertise" is synonymous with "inside connections." Christopher Brody, Albert Lasker's grandson and the treasurer of the Lasker Foundation, was a partner in Warburg Pincus from 1971 through 1998. Connections with the Lasker Foundation, which controls the National Institutes of Health, are surely a great advantage at every stage of the process of the commercialization of pharmaceuticals, including promising areas of research, government support, and FDA approval. Considering how the Lasker Syndicate has totally controlled research and cranked out corrupt Surgeon General and other reports to racketeer against tobacco, all without the slightest oversight or opposition, they should be strongly suspected of exploiting their opportunities to the fullest.

Lionel I. Pincus

Chairman and CEO. "Mr. Pincus has been with Warburg Pincus since 1966 and has been in the investment business for more than 40 years. Prior to founding Warburg Pincus, he was a Partner of Ladenburg, Thalmann & Co. Mr. Pincus was a founding Director of the National Venture Capital Association. He is Chair Emeritus of the Trustees of Columbia University and a member of the Columbia Business School Board of Overseers." He is also a trustee of Montefiore Medical Center and of New York-Presbyterian Hospital; a director of the Credit Suisse Group; and a member of the CFR.

Pincus Executive Biography / Hoovers Online

"Pincus's grandfather had migrated from Poland and his parents had a clothing and real estate business in Philadelphia. As a Ladenburg, Thalmann partner, he invested money in corporate ventures for wealthy families." Pincus took over E. M. Warburg & Co. in 1966. Although Eric M. Warburg had promised to withdraw his name, and Siegmund Warburg was "disgusted" with its retention, Lionel Pincus kept it in order to exploit its cachet (along with a painting of Eric in his reception area). Pincus "became a philanthropist and Park Avenue socialite into the bargain." (The Warburgs, by Ron Chernow. Random House, 1993, pp 660-662.) Princess Firyal of Jordan is his frequent companion.

Lionel Pincus at UNA-USA Ambassador's Dinner / New York Social Diary
Lionel Pincus & Phoenix House / New York Social Diary 2001
Jimmy & Rosalyn Carter dinner at Alice Mason's / NY Social Diary.com

Pincus was on the guest list of a Clinton White House Coffee, Jan. 17, 1996, for big Democratic National Committee supporters. (Washington Post.)

Clinton White House Coffee Guest List / Washington Post

Eric M. Warburg

Eric Warburg's friend and distant relative Otto Heinrich Warburg was Adolph Hitler's authority on cancer. He enjoyed special protection during the Third Reich and kept his post throughout the war.

Siegmund Warburg

Siegmund Warburg, another of Eric's relatives, was a militant anti-smoker who habitually used tantrums to intimidate people. He was a partner of Kuhn, Loeb and his firm SG Warburg and Co. represented Kuhn, Loeb in London. Cummins Engine Company was one of their clients.

John L. Vogelstein

Vice Chairman and President. "Mr. Vogelstein has been with Warburg Pincus since 1967 and has been in the investment business for more than 45 years. Prior to joining Warburg Pincus, he was a Partner of Lazard Freres & Co. Mr. Vogelstein is a director of ADVO, Inc., Journal Register Company, and Mattel, Inc. He is Chairman of the Board of Trustees of the Taft School, President of Prep for Prep, a Member of the Board of Overseers of the Leonard N. Stern School of Business, New York University, and Trustee of New York University and The Jewish Museum, a member of the Board of the Rand Graduate School, and Chairman of the Finance Committee and Treasurer of the New York City Ballet."

Vogelstein bio / EM Warburg Pincus
Vogelstein Executive Biography / Hoovers Online

Vogelstein is a member of the President's Circle of the RAND Corporation: "Members of the Circle provide extraordinary service and financial support to RAND." Top corporate donors include The Ford Foundation, Kaiser Permanente, and State Farm Insurance. "Benefactors-$50,000+" include Harold Brown, Newton N. Minow, Cynthia and John Reed, Donald H. Rumsfeld, and Benno C. Schmidt Jr., plus Allstate Insurance Company, Aon Corporation, and the Association of Trial Lawyers of America.

RAND Policy Circle / RAND Corporation

Richard T. Hanley vs. Warburg Pincus et al. (1997): A securities class action suit naming Christopher Brody and John Vogelstein as defendants, alleging breach of fiduciary duty for allegedly helping Warburg Pincus at the expense of a company in which WP held stock. Brody left Warburg Pincus in 1998. (Stanford University Law School - Securities Class Action Clearinghouse.)

Hanley vs. Warburg Pincus / Stanford University Law School

Vogelstein was elected to serve the unexpired term as Trustee of Temple Emanu-El of the late Maxwell M. Rabb, who besides being a former US Ambassador to Italy was also a former Trustee of the American Health Foundation. (Temple Emanu-El Bulletin, 2002 Dec. 6;75(6).)

Bulletin Dec. 6, 2002 / Temple Emanu-El NYC (pdf, 4pp)

Vogelstein is on the Board of Trustees of New York University, along with Mrs. Elmer Bobst and Laurence A. and Preston Robert Tisch.

Trustees / New York University

Harold Brown

Harold Brown, who has been a director of Warburg Pincus since 1990, was the Secretary of Defense during the Carter administration and is a former chairman of the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies. Brown has also been a director of the Philip Morris Companies since 1983, a counselor at the Center for Strategic and International Studies, and a longtime director of Cummins Engine Company, whose executives helped found the Health Effects Institute.

Team / Warburg Pincus

Harold Brown also has connections to Frank Press of the Lasker Foundation-associated Washington Advisory Group, dating from when they were graduate students together at Columbia University.

Warburg Pincus Ventures

Warburg Pincus Ventures was by far the leading investor in the health-related field in 2000, at $485.6 million. Top investments are in InterMune Pharmaceuticals, The Medicines Company, and American Medical Systems. The number two investor, Chase Venture Capital, was a distant second at $218.2 million. Novartis was the number eleven investor, and Johnson & Johnson Development number 36. The Rockefeller family's venture capital firm Venrock is only number 32 at $46.6 million.

Top 50 Health Care Investors Based on IPOs in 2000 / Asset News (pdf)

The Medicines Company

"The Medicines Company was founded in 1996 to acquire, develop and commercialize selected pharmaceutical products in late stages of development and approved products." Directors include James E. Thomas, a Managing Director of Warburg Pincus since 1989, previously a VP at Goldman Sachs International in London; Stewart J. Hen, VP of Warburg Pincus since May 2000, previously at Merck & Co.; and Nicholas J. Lowcock, who has been with Warburg Pincus since 1994.

Company Profile / The Medicines Company
Officers / The Medicines Company

"The company's lead product, Angiomax, is an anticoagulant originally acquired from Biogen. The drug, touted as an alternative to Heparin, has received initial FDA approval" and is approved for marketing in New Zealand. Products in development include CTV-05 (lactobacillus to treat [sic] bacterial vaginosis, which is caused by viral infection of lactobacilli), and IS-159, touted as "a potential treatment for migraine headaches. Investment firm Warburg Pincus owns nearly 40% of the company; Biotech Growth owns 25%."

InterMune Pharmaceuticals

"InterMune Pharmaceuticals has licensed Actimmune (interferon gamma-1b) from its former parent Connetics (which in turn had licensed it from top biotech Genentech) for diseases that primarily affect children..." Underwriters: Warburg Dillon Read LLC; Chase H&Q; Prudential Vector Healthcare. Investors: Warburg, Soros Private Equity, Global Crossing, Signal Lake Venture Fund, Lucent Technologies, GE Capital.

The Medicines Company & Intermune news / Biospace.com 2000 May 19

Soft Money

The National Venture Capital Association, of which Lionel Pincus was a founder, was the #1 donor ($246,950, 25% to Democrats and 75% to Republicans). #9 Warburg Pincus gave $34,750, 3% to Democrats and 97% to Republicans. (Center for Responsive Politics, current election cycle, Oct 1, 2001.)

Industy campaign contributions / Center for Responsive Politics

Warburg Pincus & Tobacco

Brian S. Posner: Brian Posner took the helm of the Warburg Pincus Growth & Income Fund after nine years at Fidelity Investments. "Of the 100 or so stocks in the portfolio, no more than 10 remain from when his predecessor, Tony Orphanos, managed the fund.... He said he has changed the fund by loading it with 'blue chip' names such as Philip Morris Cos. and International Business Machines Corp. In recent years, the Warburg fund lagged because of big investments in shares of gold mining companies." (Warburg Fund Gets New Chief, New Focus. Bloomberg News, Mar. 10, 1997.) Posner headed the $15.5 billion Fidelity Equity-Income II Fund for 4½ years. "Fidelity said Equity-Income II would be turned over to Bettina Doulton, 32, who already manages another very large fund, Fidelity's Puritan Fund, with nearly $19 billion in assets. With her new responsibilities, Doulton is managing more money than anyone in America except Robert Stansky, manager of Fidelity's $55 billion Magellan Fund." (Exodus at Fidelity continues Fund manager Posner leaves for N.Y. rival. By Charles Stein. Boston Globe, Dec. 3, 1996.) "Financial adviser Doug Wilson has about $20 million of his clients' money in Fidelity Investments' $14.8 billion Equity-Income II Fund -- and he might take it out. Wilson was a big fan of Brian Posner, the fund's manager, who quit this week to take a job at Warburg, Pincus Counsellors Inc. 'I hate to see (Posner) leave,' said Wilson, vice president of Scarborough Group Inc. in Annapolis, Maryland, which oversees retirement accounts for employees of General Motors Corp. 'The great thing about him was when he made an investment, he stuck with it.''" (Investors, advisers unsettled by fund manager changes; Redemptions in anticipation of poor performance may create self-fulfulling prophecy. By Tim Quinson. Austin American Statesman, Dec 7, 1996.) "Posner becomes at least the eighth high-level fund manager to leave Boston-based Fidelity this year.... Posner, a Chicago native, joined Fidelity as an analyst in May 1987 and became a portfolio manager in 1990. He was hired by Fidelity from John Nuveen & Co., where he worked as a research associate." (Fidelity Loses Its Eighth Fund Manager This Year. By Tim Quinson. Bloomberg Business News. Dec. 13, 1996.) Posner left Warburg Pincus in 1999 to launch Hygrove Partners, a limited partnership. (Some new investment ideas for making your nest egg grow Portfolio strategies. By Russel Kinnel. Baltimore Sun, Aug. 20, 2000.) "Legg Mason agreed in June to swap its brokerage operations for Citigroup's struggling $437 billion asset-management group. Citigroup also will receive about $1.5 billion of Legg Mason stock. The deal would cement Baltimore-based Legg Mason's move from a regional brokerage firm to the fifth-largest money-management firm in the world. After the Citigroup deal closes, possibly as soon as Nov. 1, Legg Mason's assets under management will more than double to about $830 billion. Mr. [Brian Posner], 44 years old, said his initial focus at Legg Mason will be helping with the transition of the stock-fund group from being part of a firm where money management was a relatively small operation to one where it is the only focus. (International Investor: Legg Mason Fills Top Job at New Unit
Tom Lauricella. Asian Wall Street Journal, Oct 14, 2005.)

"If you're looking for a stake in tobacco with a portfolio to pad the exposure, the Warburg Pincus Focus Fund might fit your criteria. As of May 31, 3.9% of the fund's portfolio was parked in Philip Morris shares. (Amid the legal crossfire, tobacco is still smokin'. Business Week 2000 Aug.)

Warburg Pincus Value Fund / Business Week 2000

Warburg Pincus & Anti-Tobacco

Using government to eliminate rivals: The UK government has banned tobacco companies from sponsorship in sports, and Warburg Pincus has taken their place instead. Snooker's biggest break. British Broadcasting Corp. 2000 Dec. 7. "Jeremy Young and Dominic Shorthouse of Warburg's are on TSN's five-man board, plus chairman Ian Doyle, Glasgow lawyer Gerry Sinclair, and CEO George Smith. "For venture capitalists like Warburgs, a return on investment is seldom far from their minds." [Duh.]

Snooker's biggest break [sic] / BBC

"Serious riches: The right formula." Financial Times. Eddie Jordan Grand Prix sellout to Warburg Pincus.

Eddie Jordan Grand Prix / Financial Times

Bess Weatherman

Bess Weatherman, Managing Director, is on Corporate Advisory Council of The National Alliance for Hispanic Health, along with six pharmaceuticals, AOL, Bestfoods, Gerber, and Kellogg. The Alliance was founded in Los Angeles in 1973 as the Coalition of Spanish Speaking Mental Health Organizations; opened an office in Washington DC in 1974; in 1981 began "ongoing involvement in Health Objectives for the Nation (Healthy People); and in 1995 received their first funding for tobacco control."

Directory / National Alliance for Hispanic Health

Other notes


WebGain is a competitor of Microsoft in internet software development. Warburg Pincus owns about 65% of the company and BEA Systems owns about 20%.

Company Overview / Hoovers
WebGain / Intel Portfolio Company

Credit Suisse Warburg Pincus Funds

"The name change and move to loads on its remaining no-load funds are the latest in a series of significant changes at CSAM as the group has attempted to digest the operations of three different money-management units acquired over the past decade. In 1990, Credit Suisse purchased a majority stake in BEA Associates and acquired Warburg Pincus in 1999. But it wasn't until the summer of 2000 that BEA and Warburg Pincus were fully folded together. Then just months later, Credit Suisse Group purchased DLJ. The addition of DLJ Asset Management to CSAM (DLJ's brokerage operations were folded into Credit Suisse First Boston) complicated matters significantly. For starters, many DLJ funds overlapped with the Credit Suisse Warburg Pincus lineup and the DLJ portfolios also were entirely broker-sold and carried loads. Late last year, some 35 former DLJ Asset Management employees lost their jobs in a reorganization and several Warburg Pincus executives left the firm. The disappearance of the no-load Warburg Pincus name will mark the end of an era. The firm's origins stretch back to 1939, and it was in the stock-fund business for 30 years. The New York asset-management company made a big splash in 1997 when it lured former Fidelity Investments star manager Brian Posner. However, Mr. Posner left Warburg Pincus soon after the firm was acquired by Credit Suisse." (Warburg Pincus Is Shifting to Load Funds. By Tom Lauricella. Wall Street Journal, Nov 8, 2001.)

The Warburg Pincus asset management unit (value at the end of 2000, $55.9M) holdings in Novartis, makers of Habitrol, amount to 0.5% of net assets. International II Equity Fund holdings are 2.96% in Novartis and 3.21% in GlaxoSmithKlinePLC.

Credit Suisse - Warburg Pincus deal / CSAM
Lionel Pincus proposed for Board of Directors / Credit Suisse 1999
Credit Suisse Warburg Pincus Funds / CSFB
Credit Suisse Warburg Pincus International Equity II Fund / Warburg Pincus
Novartis AG Profile / Business.com

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cast 09-08-07