Former Chief at Shaklee to Run New Fund

J. Gary Shansby, the controversial former chairman and chief executive of Shaklee Corp., has joined Montgomery Securities, San Francisco, to head a new $50-million venture capital fund specializing in consumer products and services.

Shansby, 49, left Shaklee last December after clashing with the direct-sales vitamin company’s founding family. Its patriarch, Forrest C. Shaklee Sr., was a charismatic chiropractor who preached a gospel of nutrition and capitalism to Shaklee’s evangelical sales force.

Shansby injected professional management during his tenure at Shaklee but was plagued by high executive turnover and, beginning in 1983, a falloff in sales after years of steady growth. He raised Shaklee’s--and his own--profile in San Francisco by contributing heavily to the arts and by spending lavishly to decorate Shaklee’s headquarters tower.

At Montgomery Securities, an investment banking and venture capital partnership also known for its research unit, Shansby will be a general partner as well as the managing partner of the new consumer-oriented venture fund.

The fund will also invest in leveraged buyouts. Shansby “brings an impressive level of operational, marketing and strategic planning experience to our firm,” said Thomas W. Weisel, senior partner of Montgomery Securities.

Weisel said the new fund “will employ the strengths of our research and other departments to strategically invest in a select group of growth enterprises.”

Although Shansby had angled for a high-level political appointment after leaving Shaklee, the well-connected executive had been in no hurry to land a new job. Terms of his separation from Shaklee included a $3.6-million “golden handshake.”

In an interview Monday, the executive said he looked forward to being surrounded “by the bright, analytical people” of Montgomery Securities. He added: “It’ll be quite different than going to Shaklee conventions.”