- Newt Gingrich joins JAM Capital Partners as a strategic advisor
- JAM Capital Fund II seeks $100 mln
- John McCallum, who worked for Gingrich in Congress, launched JAM Capital in 2010
Newt Gingrich, who once bashed Mitt Romney for destroying jobs when he was head of Bain Capital, has joined a growth equity firm.
Gingrich, the former speaker of the U.S. House of Representatives, is a strategic advisor to JAM Capital Partners, according to a statement. He is also a Member of JAM Capital’s advisory board, said John McCallum, JAM’s managing partner in an interview with Buyouts.
McCallum said he worked for Gingrich from 1993 to 1996, when the ex-speaker was developing and implementing his “Contract with America.” (McCallum went on to become an investment manager with Goldman Sachs’s private client group before launching JAM Capital in 2010.)
With JAM, Gingrich won’t be spending all his time sourcing deals. “He has an incredible network,” McCallum said of his former boss. “Newt comes across businesses all the time. He touches lots of people and sees lots of things that we will explore and look at.”
Gingrich is helping JAM Capital with its fundraising efforts, McCallum said. The St. Simons, Georgia-based firm is marketing its second fund, which has a $100 million target. The firm’s first pool collected $40 million.
JAM, a generalist, seeks to invest in lower-middle-market companies with annual revenue of $5 million to $25 million, the statement said.
JAM has invested in nearly a dozen businesses, including BACE, a Charlotte, North Carolina, producer of balers and compactors; Vivex, an Atlanta healthcare company focused on tissue devices; and, HPPE, of Columbus, Georgia, which produces biopolymer-based products.
Many noted the irony of Gingrich’s entry into the world of alternative assets. Gingrich resigned from Congress in 1999. He made an unsuccessful run for the Republican GOP nomination in 2011. During his run for president, Gingrich repeatedly attacked Mitt Romney, who co-founded Bain, and attempted to paint Romney as a corporate raider bent on destroying jobs.
Asked how Gingrich could join a PE firm, McCallum said plainly that JAM isn’t one. JAM Capital is a growth equity firm, he said. (JAM is also called a private investment partnership on the firm’s website.)
JAM Capital is different from large leverage-buyout shops that use debt to acquire companies, McCallum said. The firm seeks to address the lack of financing available for young entrepreneurial businesses and creates jobs by investing in “young, growing companies that need capital,” he said.
JAM does have one distinguishing criterion for the companies it funds, McCallum. The growth firm seeks to invest in businesses run by people that “share and reflect” JAM’s values, he said. This includes executives with high integrity who possess a “real common-sense approach” and have real authenticity, McCallum said.
Politicians in PE
Gingrich becomes the latest political heavyweight to work for a private equity/alternative investment firm.
Timothy Geithner, the former U.S. treasury secretary, joined Warburg Pincus in 2013. Eric Cantor, ex-House majority leader, is now a vice chairman and managing director of Moelis & Co. Wesley Clark, the retired U.S. general and 2004 presidential candidate, joined Blackstone Group in 2013, while David Petraeus, a four-star general and former director of the CIA, is chairman of KKR’s Global Institute.
Of course, Al Gore, the former vice president of the United States, launched Generation Investment Management, a hedge fund, in 2004 with David Blood, the ex-CEO and managing director of Goldman Sachs Alternative Management. Generation Investment Management reportedly had $12 billion in assets in November.
And Mitt Romney is chairman of Solamere Capital, a Boston PE firm that was founded by his son, Tagg.
Some limited partners were surprised that Gingrich was working for JAM Capital, which is relatively unknown. “I would have thought that Gingrich would join a more prominent firm like Moelis rather than a small $100 million fund manager,” one LP said. Having Gingrich around does make JAM more interesting to investors, the LP said.
Action Item: To contact JAM Capital: http://www.jamcapitalpartners.net/contact/.
Photo of Republican presidential candidate former Speaker of the House Newt Gingrich speaking as former Massachusetts Gov. Mitt Romney (R) listens during the Republican presidential candidates’ debate in Jacksonville, Florida, January 26, 2012. Photo courtesy of Reuters/Scott Audette