Mr. Penn’s new fund, Stagwell Group LLC, has raised $250 million in funding, including from former Microsoft Chief Executive Steve Ballmer, who is a core investor in the new company.
Stagwell Group also has the capacity to use leverage to make up to $750 million in acquisitions, the company announced Wednesday. Stagwell Group will focus on investing in companies that are “digital-first” and can use technology and data to inform creative work, Mr. Penn said. In addition to digital marketing services, the fund said it may invest in advertising, research, data analytics and public relations.
“There’s a lot of room for new blood in the advertising and marketing industry,” said Mr. Penn, who will leave his current role as executive vice president at Microsoft by September. “Every client is looking for how to combine good advertising creative with good data analytics. I don’t think they’re getting those answers from the companies they’ve got, even if they’ve got some of the biggest companies in the world.”
Stagwell Group will start with a series of medium-sized companies that “we can believe we can grow and put together in an enterprise that is dynamic, not bureaucratic, and is digitally-based,” Mr. Penn said.
Mr. Penn was previously the co-founder and CEO of market research firm Penn Schoen Berland, which he sold to advertising giant WPP. He later became CEO of WPP’s Burson Marsteller public relations firm, before joining Microsoft in 2012, reporting to Mr. Ballmer. At Microsoft, Mr. Penn managed marketing strategy efforts and led data-analysis projects. Microsoft had adjusted Mr. Penn’s title to chief insight officer earlier this year.
Mr. Penn’s departure from Microsoft comes as the tech firm undergoes a broader reshuffling of senior leadership announced Wednesday, which includes the exit of other top Microsoft leaders such as former Nokia CEO Stephen Elop.
“A number of months ago, Mark Penn shared with me that he is planning to leave Microsoft in September to form a private equity fund, among other things,” Microsoft CEO Satya Nadella wrote in a memo to staff. “Over the years, Mark has leveraged his talents and insights on Microsoft’s behalf. From helping craft a Super Bowl ad and helping design new business and marketing models to his work in data analytics, Mark has helped me set the company on a new course.”
Mr. Penn also served as a White House pollster for President Bill Clinton and was a strategy adviser in his 1996 re-election.
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