Encore?

Florida Trend, May 2008 by Vogel, Mike

For years, Brian Moroney, a teacher at an elite Jesuit high school in Manhattan, took a few of his students to the New York Philharmonic to broaden their minds. Decades ago, one such student, Miguel B. "Mike" Fernandez, a Cuban refugee, particularly impressed Moroney with his maturity, his humility and how at peace he was with himself. "Nothing to prove," says Moroney, who was also struck by the freshman's devotion to the arts.

For Fernandez, however, the attraction of the philharmonic wasn't the bassoons on the stage, but the tycoons in the audience. He went to the concerts to study the wealthy, he says. "I would sit around and watch how they talked to each other and how they nodded their heads and how controlled they were in their personalities," recalls Fernandez, 55. "They didn't speak with their hands as much as people that I knew. It was a place where I went to learn what I wanted to be."

He learns well. His ventures in managed care and other healthcare enterprises over the past 15 years have returned an average 133% a year. He owns a mansion on Biscayne Bay, a 161-foot yacht, a home in Utah and a quail-hunting plantation in Tallahassee. He heads one of the largest Hispanic-run private equity funds in the United States. Later this year, after decades operating in the private company sphere, he will for the first time take a company, Critical Homecare Solutions,into the publicly traded market.

And, thanks to those philharmonic visits, his manner is to the manor born, 44 years removed from his childhood as a shopkeeper's son, living above a warehouse in a dirt-road town in southeast Cuba.

In 1964, when Fernandez was 12, his parents fled Cuba with him and his sister. Once in Manhattan, he earned admission to the prestigious, all-boys Xavier High School where Moroney taught. He was only a C student there. In college, he quit pre-architecture on the first day because the dean said the profession was about love of art, not doing well financially. Fernandez was drafted, joined the 82nd Airborne and never finished college.

In 1976, at 23, he was in Miami, selling life insurance. On the side, he was finding his path to fortune, selling healthcare insurance to Air Florida for its fewer than 50 employees. As he landed other airline clients and as Air Florida grew to employ thousands, Fernandez's commissions soared. He also met Cesar Alvarez, Air Florida's executive vice president, who later would lead one of Florida's largest law firms, Greenberg Traurig. Fernandez is "a great listener," Alvarez says. "He really likes to find out about things and how anything works."

Fernandez sold his airline healthcare insurance business - cashing out would become one of his hallmarks - but stumbled in his next venture, a database of group health insurance information that he expected agents would buy so they could comparison-shop for rates. Instead, insurers wanted it. "It took a couple years to figure that out," he says. "I told you I wasn't very smart."

As a prelude to a public offering, he had borrowed against his home. When the offering fell apart, he says, his accountant and attorney recommended he file for bankruptcy. Instead, to pay his creditors, he sold his home and his car and moved his family in with his parents. Alvarez, by that time at Greenberg Traurig, remembers Fernandez coming to ask about his recourse in the underwriting fiasco. "He was really hurting," says Alvarez. He counseled Fernandez that instead of spending up to eight years in a "negative way" litigating, he would do better by doing something positive with those years.

So Fernandez focused on building the company, selling it in 1990 to Ramsay HMO, for which he became an executive. In 1993, he founded a Tampa-based HMO, Physicians Healthcare Plans. He sold that company in 2002; the same year, he founded another HMO, CarePlus, which he sold in 2005. Together, the two sales grossed $607 million.

He and his co-investors in CarePlus gave $28 million of their take to employees to reward them for their contribution to CarePlus' success. Fernandez also has been a major donor to his high school alma mater and to the University of Miami and local non-profits. "The opportunity this country gives to people who are not born here is unique," Fernandez says. "I could not have gone from Cuba to France and been accepted the way I was accepted here. I could not have gone from Cuba to Venezuela. Only America is such a unique, wonderful, vi-brant, beautiful country (where) things happen magically."

His thinking was reinforced by the fear and economic stagnation he saw in 1998 on a return to Cuba to visit his dying grandfather. In his old home, he found a family still using the same furniture his parents had left 34 years earlier. A childhood friend still rode the same bicycle Fernandez left in 1964. Another friend became a hero to the regime fighting for Cuba in Angola, but then had been jailed for five years for taking milk from his barracks for his daughter.

As soon as Fernandez cashed out of CarePlus in 2005, he formed a $240-million private equity firm, MBF Partners, with two executives he had known for years, Marcio Cabrera and Jorge Rico. They sift through 300 companies a year to find a handful that suit their parameters: Operating healthcare service companies - no startups - with $5 million to $25 million in annual earnings, companies to which the partners can contribute expertise as well as capital.