Bloomberg News

Ex-Pentagon Matchmaker, Pritzker Open Firm for Deals in Iraq

October 28, 2011

(Adds background on Brinkley in 12th paragraph.)

Oct. 28 (Bloomberg) -- Paul Brinkley, the former U.S. Defense Department official who sought to attract companies to Iraq and Afghanistan, started an investment and advisory firm with backing from billionaire Thomas Pritzker.

Nawah LLC will initially seek to invest in Iraqi companies while advising clients looking to do business in the country and throughout North Africa and Central Asia, Brinkley said in an interview. Brinkley, who left the Pentagon in July, is chief executive officer, with Pritzker serving as chairman.

The executives are starting Nawah, short for North America Western Asia Holdings, as the Obama administration prepares for the exit of U.S. troops from Iraq after eight years. They believe Iraq can be a stable and profitable country where industries such as energy and agriculture can thrive, Pritzker said.

“There’s a point at which the private sector needs to come in and play its role,” Pritzker said in a telephone interview. “It’s potentially an elegant handoff between the government and business.”

Pritzker, who lives in Chicago, is CEO of the Pritzker Organization, the financial and investment adviser to the Pritzker family’s interests. He also serves as executive chairman of Hyatt Hotels Corp. and chairman of Marmon Group Inc., a holding company in which Warren Buffett’s Berkshire Hathaway Inc. bought a controlling stake in 2007.

Pritzker, 61, is the lead investor in the new firm. Nawah declined to disclose how much it will have available to put into deals.

Courting Boeing, Honeywell

At the Pentagon’s Task Force for Business & Stability Operations, Brinkley traveled extensively in Iraq beginning in 2006, eventually bringing more than 200 companies to the country. The visits, which included Honeywell International Chief Executive Officer David Cote and Boeing Co. CEO James McNerney, generated investment commitments of more than $5 billion, excluding oil-related deals, according to task force data.

In Afghanistan, where the task force shifted its operations in 2010, delegations ranged from computer giant IBM Corp. to women’s clothier Kate Spade. The latter is producing cashmere scarves made by Afghan women with locally sourced materials.

The task force’s objective was largely to win over those “iconic” companies, Brinkley, 44, said in a series of interviews in Afghanistan last year. His new firm will advise similarly large corporations on doing business in the region, as well as infuse capital into smaller firms already based there.

‘Patient View’

As with their government work, Nawah is planning to set up shop in a region many companies actively avoid because they’re unconvinced that any financial rewards are worth the monetary and physical risk of operating in war-torn countries with fragile democracies.

“We see an honest opportunity where more risk-averse capital might not be willing to go,” Brinkley said. “It’s a patient view that creates long-term wealth for ourselves and our business partners.”

Brinkley, a former chief information officer for JDS Uniphase, retired as a deputy undersecretary of defense shortly after the departure of Secretary Robert Gates. While the task force was originally slated to move under the auspices of the State Department, the Pentagon, led by new Secretary Leon Panetta, successfully fought to keep it in its ranks.

Pritzker first met Brinkley as the task force was pitching international hotel chains about opening in Iraq and later Afghanistan. Brinkley persuaded Pritzker to travel to Iraq twice and the pair subsequently went twice to Afghanistan, where Pritzker had first visited in the 1970s and again in 2004 with his wife.

Political Stability Key

While Hyatt hasn’t opened a hotel in Baghdad or Kabul, the two men became friends and when Brinkley left the government, he called Pritzker.

“I have a lot of confidence in this group,” Pritzker said. “It’s seen as a can-do team in terms of commercial development. Throughout the region, they have a great and well- deserved reputation for being reliable.”

Brinkley and Pritzker both said their success ultimately will depend on political stability in the region, and in the individual countries. Their work, if done right, may have a hand in helping create that, they said.

“There’s no opportunity like this in the world, given the political developments and the unleashing of human activity,” said Brinkley, who weighed returning to the tech sector after leaving the government. “It would be silly to walk away from it.”

--Editors: Larry Edelman, Steven Crabill

To contact the reporter on this story: Jason Kelly in New York at jkelly14@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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