After biding his time as a senior commercial banker for Bank of Boston in such far-flung places as Cameroon and Zimbabwe in the early 1980s, Peter Hermann returned to the U.S. with aspirations of running his own show. A two-year stint spearheading a new lending division with partner Michel Reichert helped prove his mettle and (temporarily) satisfy his ambitions, but now he was ready to explore uncharted territory: launching a private-equity division within the venerable New England bank. All he had to do was persuade his boss, Chad Gifford, Bank of Boston’s vice chairman at the time, to lend his support (and money).

Twenty-two years later, Hermann, 53, credits the 65-year-old Gifford — now the chairman emeritus of Bank of America, thanks to a string of mergers that brought Bank of Boston into the BofA fold — with having had the vision and confidence to help him achieve success in private equity. After departing Bank of Boston with his partners in 1994, Hermann founded Heritage Partners, a Boston-based private-equity firm focused on buying family-owned businesses.

Hermann: Michel and I knew very little about private equity at the time. We were lenders. But we convinced Chad we knew about analyzing businesses. He gave us the bank's full support and encouraged us to try. At the time, KKR and Citibank were about the only leading names within the asset class.

Gifford: I didn't know much about private equity -- and I wasn't sure how much they knew, either -- but I did know two things; Hermann and Reichert understood people, and Bank of Boston had to do more than just lend money. We had to be able to change with the times. Starting a private-equity practice was a way to grow our business, and that's what I cared about.

Hermann: Chad gave us a chance and protected us. In a big bank, when you're trying something new, political problems often arise. We definitely ruffled feathers and stepped on toes; whenever we had real problems, Chas was the person we would turn to. We would never have survived the internal politics if he hadn't stepped in.

Gifford: When they came to me with news of their plans to hang their own shingle, I was filled with mixed emotions. I was excited for them, but at the same time felt a sense of loss that my team was leaving the family fold. I believe the most valuable assistance I gave them while they were at the bank was the confidence to do their own thing.

Chad Gifford (right) gave Peter Hermann the confidence he needed to pursue his private-equity.

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