Two former New York City pension investment professionals have launched a new firm, Partnership Equity, to focus on middle-market investments in “complex situations”, according to a source.
The firm is led by Adam Blumenthal, who until the beginning of this year was first deputy comptroller and chief financial officer in the office of New York City Comptroller William Thompson.
Prior to joining Thompson’s office in 2002, Blumenthal was vice chairman of Washington DC-based American Capital Strategies, a publicly traded “business development company” that makes equity and debt investments in private companies.
Joining Blumenthal is Josh Wolf-Powers, who until recently oversaw the comptroller’s $4 billion allocation to private equity funds.
The comptroller’s office advises five New York City pension funds with an aggregate value of approximately $85 billion.
Last December, Thompson hired Deborah Gallegos, the former deputy state investment officer for the state of New Mexico’s pension fund, to serve as Thompson’s chief investment officer. At New Mexico, Gallegos was a big proponent of the private equity asset class.
Partnership Equity, based in New York, will “invest in complex situations characterized by impaired value or obstacles to liquidity” according to marketing materials from the firm. Situations in which the firm may invest include companies with embedded relationships; companies facing constrained governance; companies that have recently gone through a Chapter 11 bankruptcy; over-leveraged companies; and companies with labour difficulties.
The firm will often pursue bids that are “fully financed”.
Wolf-Powers, before joining the comptroller’s office three years ago, worked at New York private equity distressed specialist KPS Special Situations, which has long worked with unionised companies.