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The Angelakis’ share

7 April 2015 By Richard Beales

Michael Angelakis could become the envy of C-suites everywhere. Comcast’s chief financial officer is getting $4 billion from his employer to invest in chunky deals. If he can generate a 17.5 percent gross annual return, Breakingviews pegs his personal share, averaged over a decade, at about $40 million a year.

CFOs ready for a new challenge typically have to look elsewhere. But Brian Roberts, the U.S. cable operator’s chief executive, is handing over a sum larger than most private equity funds, which is essentially what Angelakis will be running once his successor is found.

Projected 10-year cash flow for Michael Angelakis

Comcast chart

Source: Reuters Graphics/Breakingviews

Projected 10-year cash flow for Michael Angelakis

Before joining Comcast in 2007, Angelakis worked at buyout shop Providence Equity Partners. The deal-making experience has proved useful in his current role, too, as he helped structure the huge acquisitions of NBC Universal and Time Warner Cable. Comcast is hoping he’ll find investments that grow into new businesses for the $150 billion company, for example in overseas markets. Delivering financial returns, however, will be a big priority.

A fund-level annual investment return in the upper teens over the 10-year life of his deal with Comcast would make Angelakis a good, but by no means unprecedented, private equity performer. If he manages that, Comcast will get a return just shy of 15 percent after paying $40 million in annual fees, a Breakingviews analysis suggests.

The real winners in private equity, though, are successful fund managers, and Angelakis would be no exception. Using the same assumptions, he’d net about $400 million by 2025 or so. The bulk of that, or more than $270 million, would come from his cut of the 12.5 percent of gains, or “carry,” that he and his colleagues at the new firm are to share.

He’ll also earn $8 million a year in salary and would benefit from more than doubling his own money, at least $40 million of which he is investing alongside Comcast. The spoils are back-ended, but average out at roughly twice his existing CFO pay package of about $20 million.

Angelakis would pull down on average triple that, not just double, if his fund returns get up to 25 percent – while he’d still match his current pay with annual gains of just 10 percent. Though most other public companies aren’t likely to follow suit, it probably won’t stop finance chiefs far and wide from running the numbers.

 

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