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Three Former B of A Executives Form Venture Capital Firm : Investment: Forrest Binkley & Brown will open Newport office this month. Partners seek $100-million SBA fund for starters.


NEWPORT BEACH — Three former Bank of America Corp. executives, including former vice chairman Nicholas B. Binkley, said on Wednesday that they have formed a venture capital firm called Forrest Binkley & Brown.

The threesome--which includes Greg Forrest and Jeff Brown--will open an office later this month in Newport Beach, Forrest said. The three men plan to file an application with the U.S. Small Business Administration to establish a $100-million limited partnership fund to invest in small businesses, he said. Such funds have existed since 1958, but recent legislation makes them more attractive to investors.

Binkley said the timing is right because little capital is now available to growing businesses and because "our country (is) on the verge of economic expansion and recovery, and a key component of President Clinton's economic package calls for helping small and medium-sized businesses."

Since the new regulations took effect in November, "we've gotten a lot more calls," said Sandy Sutton, director of the SBA's district office in Santa Ana. "I don't know if that means people are going to be setting up more investment companies, but certainly there's been a greater interest."

The new regulations remove some limits of the old law, including a $35-million cap on government-backed funding.

Forrest Binkley & Brown hopes to make half of its investments through the SBA program. Other funds are to come from limited partners Sid R. and Lee M. Bass of Fort Worth, Tex. The Basses are among the world's 10 richest people, according to Forbes magazine, worth $6.8 billion.

The firm is looking to invest in a number of industries, including financial services, light manufacturing, services and distribution, specialty retail, consumer products, communications and technology.

Likely candidates for investment are privately held small and mid-size companies, Forrest said, but not start-ups.

"We're not out there to hit home runs," Forrest said. "We want to hit singles and doubles and make a profit on every deal we do."

Binkley, 47, and Forrest, 45, met when they were working for Security Pacific Corp.'s non-bank subsidiaries division. Eventually, Binkley rose to become president of Security Pacific's non-bank group, and Forrest became president of the venture capital group.

When Bank of America and Security Pacific merged in April, 1992, Binkley became vice chairman of the board and a member of the bank's managing committee. Forrest became chairman and president of Bank of America Venture Capital.

Forrest met Brown, 32, when he was interviewing students at the Stanford Graduate School of Business. He hired Brown, who most recently was a senior vice president at Bank of America Venture Capital.

All three men left their jobs at Bank of America within the past two months.

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