Private Equity News & Analysis

S. African investor backs new US firm

Johnnic Holdings, a Johannesburg investment holding company, has made a commitment of as much as $43.5m to New York-based Blue Wolf, a new, government- and labour-focused middle-market buyout firm, led by two former New York City comptroller investment executives.

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Blue Wolf Capital Management announced today a “substantial commitment” from Johnnic Holdings, a publicly traded South African investment company.

Blue Wolf, formerly named Partnership Equity, was founded by Adam Blumenthal and Josh Wolf-Powers, who worked together in the comptroller’s office of New York City, where they pioneered a private equity programme.

Johnnic, controlled by the $1 billion South African industrial holding company Hosken Consolidated Investments, has agreed to commit between $33.5 million and $43.5 million (€26 million to €34 million) to Blue Wolf to allow it to begin investing.

Marcel Golding, chairman of both Johnnic and Hoskin Consolidated, said in an interview that the agreement marked his company’s entrée into the US middle market. “We are looking at dipping our toe into the US,” he said. “We found Adam and Josh to be the most appropriate people to partner with.”

Johnnic has invested extensively throughout Africa.

Blumenthal said he and the executives of Hoskin Consolidated are “longtime friends”.

Blue Wolf may tap additional sources of capital in the future, but Blumenthal declined to provide additional details. He said his firm has several letters of intent out to potential acquisition targets.

Blue Wolf will target companies in which federal or local governments play a role; companies with labour union presence; and companies facing financial distress. “We’re seeing proprietary deal flow, and we’re seeing transactions with limited competition,” said Blumenthal.