Tapping An Emerging Market

Fund manager Carlton Jenkins looks to invest in inner-city businesses

Carlton Jenkins is looking to tap into emerging markets here in the U.S. As managing partner in the Yucaipa Corporate Initiatives Fund, Jenkins will be seeking out urban-based minority- or female-owned businesses. The fund intends to invest in these businesses and bring Fortune 500 corporations in touch with these firms to invest in, partner with, or acquire services from.

“We’re interested in putting $25 million to $50 million at work in each of these transactions to create minority-owned businesses with the kind of size and scale to leapfrog from local and regional suppliers into national and international suppliers by partnering with Fortune 500s,” says Jenkins. “[We want] to build the kind of company that does $300 million to $500 million in sales.”

The idea is to invest the funds in these companies so they have the necessary liquidity to handle partnerships, supply contracts, sales, or acquisitions of assets with large corporations. The fund’s investments won’t be limited to any particular industry or sector. “We’re looking at high-growth opportunities where we can create jobs in an environment where there’s opportunity to create some wealth-building strategies,” Jenkins says. Such strategies include 401(k) and employee stock ownership plans.

And the private equity fund is on track. Formed in July 2001 by Yucaipa Cos., a private equity firm based in Los Angeles, the fund received its first investment — a $200 million commitment in April from the California Public Employees’ Retirement System (CalPERS), the largest public-employee pension fund with more than $140 billion in assets. The fund intends to become active once it reaches $500 million in capital. According to Jenkins, there’s a commitment in the works from an undisclosed investor that is “similarly sized” to the CalPERS deal he expects to have finalized in June.

Prior to joining Yucaipa, Jenkins was founder and principal of Founders National Bank of Los Angeles, a former BE 100S bank that merged with Boston Bank of Commerce (No. 6 on the BE BANKS list with $261.7 million in total assets).

One of the things Jenkins hopes the fund will accomplish is to bring more minority-owned businesses to the table with the big boys. “There are consolidations taking place, there are divisions being bought and sold, there are brands being sold, and very rarely [involved] in those transactions are people of color,” he laments. “And we believe that if you can introduce enough capital and enough financial resources to a credible player, we can and should fit in some of those rooms, at some of those tables when those opportunities are discussed.”

For more information on the fund, call 310-228-3500.

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