How Black Asset Manager uses acquisitions and new ventures to grow
Using acquisitions and new business creation among its strategies, Blueprint Capital Advisors (BCA) takes aggressive steps to attract investors and help the company grow.
The Newark, N.J.-based firm is among a handful of black-owned companies doing business nationwide in the multi-trillion dollar asset management industry. CEO of Blueprint Jacob Walthour Jr. says that only a handful of those companies, including his own, have passed the $1 billion mark in assets under management (AUM). And he swears that even fewer are active in private credit for business.
The moves by BCA come as a Knight Foundation report shows securing new business remains a struggle for black asset managers. A sample reflecting over $82 trillion in assets under management in the United States shows that only 1.4% of the total sample was managed by companies owned by diverse interests in September 2021.
Walthour tells BLACK CORPORATE there is a growing number of companies in the high end private equity industry where companies are buying companies with leverage. Still, he estimates there are perhaps fewer than 10 black-owned businesses in private credit. He said BCA began as a discretionary asset manager focused on marrying investor capital with niche private credit opportunities and direct lending to businesses and other borrowers.
Walthour says BCA has used the business and strategy to develop a deeper understanding of credit investing, loan origination, underwriting, loan servicing and corporate restructuring. His business expanded into the credit counseling business in 2019 and that year acquired Parkview Capital Credit, a Houston-based investment firm with stakes in real estate, healthcare, transportation and the media.
“Advice on distressed business situations is time-consuming and emotionally charged, but the fees charged are very high compared to handling performing loans and business situations,” says Walthour. This move helped BCA grow and double its revenue during the pandemic.
Walthour says the global pandemic has created pressure on several asset management companies and corporate entities, creating an opportunity for BCA to step in and provide stable management and help restructure the debt of these companies. Through his involvement with Parkview, he says Blueprint became the primary lender to Ebony Media Holdings, the iconic black-owned media company.
BCA, says Walthour, helped Ebony through its challenges, managed the business through Chapter 11 bankruptcy filings and sold it to a strategic buyer for more than $13 million in 2021. He swears the sale price was double what the company had sold for five years before when it had 10 times the revenue.
In another corporate matter, Walthour and BCA are awaiting a court ruling on a federal lawsuit filed in 2020 against current and past members of the New Jersey Division of Investment (DOI), BlackRock Alternative Advisors and Cliffwater LLC. The lawsuit alleges racial discrimination, intellectual property theft, as well as other charges.
Last month, BCA entered the real estate business after forming a strategic partnership with New York-based T30 Capital LLC. Walthour calls T30 a real estate lender with experience in commercial real estate bridge financing. He said the partnership will allow BCA to expand its commercial real estate lending business and provide financing to MWBE sponsors and other developers of large-scale commercial real estate projects that have traditionally faced a lack of access. in the capial.
He added that T30 and Blueprint will identify and execute $5 million to $50 million in senior construction and bridge loans for a range of property types, including multi-family, mixed-use, hotel and industrial along the corridor. northeast as well.
“We are thrilled to establish this relationship with T30 at this pivotal time in their evolution,” said Walthour.
“Together, we will not only create attractive opportunities for investors, but also provide MWBE-led real estate projects with access to capital while accelerating the growth of T30’s lending platform. There is a triple bottom line in this business, and we look forward to a long-term partnership. »
In another new venture, BCA in January 2022 acquired a majority stake in Securities International Group LLC, giving it a majority stake in GovDesk LLC, a brokerage firm based in Redondo Beach, California. The all-cash deal for an undisclosed amount is currently undergoing regulatory review.
Walthour says the brokerage firm will focus in the future on offering advice to small and medium-sized businesses ranging from $2 million to $20 million. It will provide fundraising for private equity funds, making GovDesk the only black-owned placement agent in the country.
Overall, BCA is positioning itself for future growth. Walthour estimates that the company’s latest actions will increase assets under management from the current $1.4 billion to $5 billion over the next five years.
“We now have multiple ways to monetize our buy-side and sell-side relationships and we will grow by delivering value to both sides,” he said.