BHMS, formed by Morgan Stanley, KKR executives, nears final close on debut

  • BHMS hired Jason Perlroth from Sutton Place Strategies
  • Raising first institutional fund
  • Expected final close in August

BHMS Investments, launched by former Morgan Stanley and KKR executives, hired Jason Perlroth from Sutton Place Strategies to focus on business development as the firm nears the final close on its debut fund, according to people with knowledge of the firm.

Perlroth joined New York-based BHMS this year from Sutton Place Strategies. Perlroth joined Sutton Place Strategies in its early days in 2010 and led the research and analysis division, according to his biography on BHMS’s website.

Whether someone will succeed Perlroth role at Sutton Place is unclear. No one returned a call to a general phone number at the firm on July 25.

BHMS, meanwhile, expects to wrap up its debut institutional fund around August, according to a person with knowledge of the process.

The firm is targeting around $75 million and has already held closes on the fund. How much BHMS Investments Fund I has raised so far is unclear. A Form D filing from June showed Fund I had collected about $33.2 million from 32 investors.

BHMS invests $10 million to $15 million of equity per deal and is targeting five to seven deals out of Fund I, one of the people said. The firm generally targets business services, including healthcare services, but is opportunistic and will look at distressed situations.

The firm “likes to spend time with [the] companies … putting in the elbow grease,” the person said.

BHMS made six prefund deals, using capital sourced from a group of family offices. One of the deals was an investment in insurance brokerage Hilb Group LLC, which grew after the investment by acquiring numerous smaller companies. ABRY Partners acquired Hilb Group in 2015, buying out BHMS’s stake.

BHMS was formed by Managing Partners Kevin Angelis, 38, and Robert Salamon, 37. Angelis formerly was at Morgan Stanley, investing in distressed debut and equity transactions. Prior to leaving, he was an executive director in the special-situations group. Prior to Morgan Stanley, Angelis worked at Carlyle Group and American Capital.

Salamon, prior to BHMS, co-managed a $1.25 billion opportunistic value portfolio at KKR. He invested in public debt and equity using a long-term, private equity approach to public markets, according to his bio on the website. Prior to KKR, Salamon was an investment banker at JP Morgan.

Angelis chose the name BHMS because it was the former ticker symbol of Bethlehem Steel, Buyouts previously reported. His grandfather, whom he was close to, rolled steel for 40 years.

Bethlehem Steel was once the nation’s second largest steel producer before it filed Chapter 11 in 2001. “It has nice symbolism,” Angelis told Buyouts in the prior interview. “Bethlehem Steel was one of the world’s preeminent firms and then it filed for bankruptcy protection. You need to always be thinking ahead.”

Action Item: Check out BHMS’s Form ADV here:

Moravian Academy students practice lacrosse with the blast furnaces of the now-closed Bethlehem Steel mill behind them in Bethlehem, Pennsylvania, on April 21, 2016. Photo courtesy Reuters/Brian Snyder