[See: http://ibn.worldmedianetworks.com/bin/content.cgi?ID=2221&q=1 , on how “Portland Trust” hired Eival Giladi, the Israeli Prime Minister’s aide who planned and oversaw the expulsion of the Jews from Katif and provided Giladi with handsome remuneration in the process. It may not be a coincidence that Sir Ronald Cohen has now purchased Israel’s largest public telephone company, Bezek, and has appointed Dov Weisglass, Ariel Sharon’s expulsion architect, to be the new CEO of Bezek. Israel Resource has recently been informed that Weisglass has been hired once again by the office of the prime minister of Israel – db ]

Sir Ronald Cohen: Financier who is hoping for a peace dividend After a quarter of a century at private equity firm Apax, he now wants to help solve the Israeli-Palestinian crisis

Almost a year after surprising everybody by retiring from the firm he founded and which made his name, Sir Ronald Cohen is finally moving out of his office at Apax Partners. “It’s just not big enough,” he says of the huge corner room filled with pictures of the great and the good, and a desk the size of a small bus. The panelled office may be large enough for a sizeable modern art collection but it is far too small to contain the ambitions of one of the pioneers of the British venture capital industry. “It’s been a hugely intensive year,” he says in a rare interview. “I left [Apax] in order to devote my efforts to social investment, among other things.”

The “other things” include an effort to help the Middle East crisis by funding Palestinian businesses, an attempt to “work out where the investment management business is going”, and a book aimed at helping entrepreneurs avoid common pitfalls. Worth some £250m, he is a major Labour donor. And next week he is set to announce the results of an official review into the £5bn left unclaimed in British bank accounts.

The scope of his activities and flashes of hubris make it easy to be cynical about Cohen in a very English sort of way. Someone who knows him quite well said: “I got a letter from Ronnie when he left Apax announcing that he was going to address the financial problems of the Middle East. A noble and somewhat wide-ranging task.”

Yet it is hard not to be impressed by the “lofty ideals” of a man who came to Britain as an 11-year-old with almost no English and a sense that he wanted to restore his family fortunes and improve the world. After grammar school, he won a place at Oxford, where he was elected president of the Union. He thought of going into politics, only changing his mind at Harvard Business School. “I discovered venture capitalism and saw the progress of some of my colleagues [such as William Waldegrave and Douglas Hogg] in the Thatcher government. I decided politics might not be as exciting as the VC industry.”

He has travelled a lot in the past year and works 12-hour days. “I left Apax with a sense of excitement,” he says in an accent that shows traces of his birth in Egypt 60 years ago. “It was a little like the locomotive being unhitched from the wagons. Instead of being concerned about the minutiae of managing a very large group, I’ve been able to travel the world, think deeply about things and push a number of different initiatives, here and in the Middle East.”

But, he admits, “I’ve failed to spend a lot more time with my family.” Cohen married his third wife, the film producer Sharon Harel-Cohen, 20 years ago and the couple have two teenage children.

Described as ruthless as well as “spectacularly smooth” by one pretty smooth private financier, talking to Cohen is a bit like having a dinner party conversation with a professor, full of thoughtful insights about the world, if not personally very revealing.

Overpaying

His successors at the powerful private equity firms should take heed, however. Among his concerns are the historically high levels of debt being taken on by the industry because of a combination of low interest rates, a benign economy and the large sums of cash invested in buyout funds. “People are overpaying [for businesses] because they are including a lot of leverage,” he says.

Is an industry involved in the UK’s biggest takeovers acting irresponsibly? “I don’t think responsibility is the word I’d use… I’m sounding a note of caution rather than ringing an alarmist bell.”

An “advocate” for venture capital – he calls it entrepreneurship’s “double helix” – he suggests the industry is adapting to its increasingly mainstream role. “The industry can no longer say, ‘I want to ply my trade in private’.”

Under his aegis, Apax invested in start-ups including PPL Therapeutical, which cloned Dolly the sheep, and the computing group Autonomy, as well as the Virgin Radio and Waterstone’s book chain buyouts.

Few have done so much to establish private equity as Cohen, who throws fabulous parties at his homes in Notting Hill, Manhattan and Cannes. Jon Moulton, another founder, says: “People either like him or hate him. But at the very least you have to say that he was the most effective chairman of the British Venture Capital Association.”

When Cohen and three friends set up Apax in 1971, he was just 26 and private financiers were regarded as risk-taking corporate raiders. While vestiges of this reputation remain, private equity – used to buy struggling firms as well as provide seed-financing for new ones – now attracts hundreds of millions in pension fund and other institutional money. As Cohen says: “It has moved from the periphery to the mainstream.”

Cohen now wants to do the same for social investment, funding businesses in some of the poorest parts of Britain. After heading a government task force, he co-founded Bridges Community Ventures in 2002, which raised its second investment fund of £33m two weeks ago.

Similar schemes have disappointed those hoping that hundreds of millions would be pumped into the sector, helped by tax incentives. Yet Cohen, who has put £2m into Bridges, calls it “an innovator in the area of social return”. The fund aims to make an average return of 10%-15% – about half that of its private-equity peers.

“A whole sea change is beginning to start where the values that existed in business are being transported to social activity,” he says. “You can’t expect substantial capital to go into an area unless the returns can be measured.”

He has used the same philosophy to attract investment to the West Bank and Gaza. The Portland Trust, which he calls an “action tank”, has raised eyebrows for many reasons – not least that such a prominent Jewish businessman is behind it. “My interest in the Middle East stems from the fact that I was born in Egypt, am Jewish and am married to an Israeli. I can understand both sides of this conflict. I believe the economic dimension is crucial to keep the peace, just as it was in Northern Ireland.”

Emissary

The trust has allowed European and US agencies to continue to invest in the area despite the election of Hamas. He has reportedly started to take over the role of government emissary from Lord Levy by meeting Israeli leaders, including the prime minister, Ehud Olmert.

He is circumspect on the subject of the Middle East, citing political tensions, and even more reticent about his “investment management”, which he is said to be involved in with some very rich families but refuses to discuss.

His friendships have been crucial to winning backing. Friends said to have attended parties at his London mansion, with its reportedly “colossal” underground swimming pool, include the Rothschilds, Sir David Frost, Lord Browne of BP and the Rausing tycoons.

David Freud, a former banker who is now chief executive of the trust, says: “He is clearly one of the great networkers of our time. And I’ve met a few.”

Colleagues say Cohen treated Apax like a family. “It was an extension of him,” said one. Hugely supportive, he demands loyalty in return. He told one turncoat: “If you catch a provincial train, you’ll end up in a provincial town.”

Why did he leave Apax? It needed a “clear handover of leadership to a new generation,” he says. “I also had the feeling that I was not destined just to be a private-equity investor. I thought there were other things I could do.”

Cohen believes the current wave of philanthropy is the product of an entrepreneurial age. “We are finding a generation of entrepreneurs who started from nothing – Bill Gates is the latest example – saying that they want to give something back. It’s what’s motivated me. There are huge opportunities to be successful now and if you come from humble beginnings you tend to want to do the same for others.”

A Liberal in his youth – he stood in two elections in the 1970s – he changed allegiance in 1996. “I believe in the realignment of the left, getting the Labour and Liberal parties to face the same way,” he says. “Then I met Tony Blair and I thought, ‘this bloke is trying to do exactly what I believe in.’ Labour has managed to establish itself as a centrist party, devoid of ideology but with a philosophy that encompasses taking care of people who do less well.”

Now more aligned with Gordon Brown, whose aides sing Cohen’s praises, he says David Cameron has a “great challenge ahead of him”.

One of the many donors to have given more than £1m to Labour since 1997 who have received a title (for services to the venture capital industry), I ask whether a recent trip to parliament was at all linked to the cash-for-honours inquiry.

It wasn’t. He was chatting to Jack Straw. “I think my credentials are well enough established to be beyond doubt,” he says. And I have to confess that he is probably right.

RELATED ARTICLESMORE FROM AUTHOR