How One Black Asset Manager Is Using Acquisitions and New Ventures to Scale Up
Utilizing acquisitions and entering new businesses among its strategies, Blueprint Capital Advisors (BCA) is making aggressive moves to attract investors and help the firm grow.
The Newark, N.J.-based firm is among a few Black-owned firms doing business nationally in the multitrillion-dollar asset management industry. Blueprint chief executive officer Jacob Walthour Jr. says only a handful of those firms, including his, have crossed the $1 billion mark in assets under management (AUM). And he swears even fewer are active in the private credit area for the business.
The moves by BCA comes as a report by the Knight Foundation shows obtaining new business remains a struggle for Black asset managers. A sample reflecting over $82 trillion of AUM in the United States shows just 1.4 percent of the total in the sample were managed by diverse-owned firms as of September 2021.
Walthour tells BLACK ENTERPRISE there is a growing number of firms in the high-profile private equity industry where firms buy companies with leverage. Yet, he estimates there are perhaps under 10 Black-owned firms 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 corporates and other borrowers.
Walthour says BCA used the business and strategy to develop a deeper understanding of credit investing, loan origination, underwriting, loan servicing, and company restructuring. His firm expanded into the credit advisory business in 2019 and that year acquired Parkview Capital Credit, a Houston-based investment company with holdings in real estate, health care, transportation, and media.
“Advising on distressed corporate situations are emotionally and time intensive but the fees earned are very high relative to managing performing loan and corporate situations,” Walthour says. The move helped BCA grow and double revenues during the pandemic.
Walthour says the global pandemic created stress 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 its involvement with Parkview, he says Blueprint became senior lender to Ebony Media Holdings, the iconic Black-owned media firm.
BCA, Walthour says, helped Ebony address its challenges, managed the company through Chapter 11 bankruptcy filings, and sold it to a strategic buyer for over $13 million in 2021. He swears the selling price was double what the company sold for five years prior when it had 10 times as much in revenue.
In another company matter, Walthour and BCA are waiting for a court ruling on a federal suit filed in 2020 against current and past members of the New Jersey Division of Investment (DOI), BlackRock Alternative Advisors, and Cliffwater L.L.C. The suit claims racial discrimination, theft of intellectual property, along with 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 an experienced real estate debt lender of commercial real estate bridge financing. He said the partnership will allow BCA to scale its commercial real estate lending activities and provide financing to MWBE sponsors and other developers of large scale commercial real estate project that have traditionally faced lack of access to capital
He added T30 and Blueprint will identify and execute $5 million to $50 million of senior bridge and construction loans for a range of property types, including multifamily, mixed-use, and hotel and industrial along the Northeast Corridor as well .
“We are excited to establish this relationship with T30 at this pivotal point in their evolution,” Walthour says.
“Together, we will not only create compelling opportunities for investors, but also provide MWBE-led real estate projects access to capital while accelerating the growth of T30’s lending platform. There is a triple-bottom line to this endeavor, and we look forward to a long-term partnership.”
In another new endeavor, BCA in January 2022 acquired majority-interest in Securities International Group LLC, giving it a controlling interest in GovDesk LLC, a Redondo Beach, California-based brokerage firm. The all-cash deal for an undisclosed amount is now under regulatory review.
Walthour says the brokerage firm’s focus going forward will be offering corporate advisory for small and mid-sized companies ranging from $2 million to $20 million. It will provide capital raising for private investment funds, making GovDesk the nation’s only Black-owned placement agent.
All told, BCA is positioning itself for future growth. Walthour estimates that the firm’s latest actions will increase AUM from $1.4 billion now to $5 billion in the next five years.
“We now have multiple ways of monetizing our relationships on the buy-side and sell-side and we will grow by delivering value to both sides,” he says.