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Blue Point Capital’s John LeMay Talks about Private Equity Investing and its Future

September 21, 2018 @ 7:30 am - 9:00 am

Event Recap:

The Center For Free Enterprise hosted its 18th consecutive sold-out program on Friday, September 21, 2018 at The Racquet Club in Pepper Pike, Ohio.

Ben Calkins, of sponsor The Calkins Law Firm, Ltd., welcomed the attendees and asked Ken Greaney and Greg Keegan, of sponsor JP Morgan Wealth Management, to stand up and be recognized for their substantial contributions to CFE and its programs.

Mr. Calkins mentioned that CFE is currently looking for an additional sponsor for the new CFE website and newsletters, and this year’s programming. Interested parties should contact Mr. Calkins or Mr. Brown directly for details concerning this rare and unique sponsorship opportunity.

After giving of the attendees the opportunity to briefly introduce themselves, Mr. Calkins introduced David Brown, of Red Hawk Associates, another sponsor, as the program’s moderator.

Our presenter was John LeMay, of Blue Point Capital Partners.

Reflecting back to 1998, Mr. LeMay pointed out that relatively few private equity investors existed at that time. Back then, investment bankers had relatively few private equity investors to shop their deals to. Today, by contrast, investment bankers typically are forced to cull their list of private equity investors from thousands to hundreds before sending out a book.

Blue Point has just raised its fourth fund, of $730 Million. Two of the founders of Blue Point, David Given and John Kirby, have retired and the firm has successfully navigated a transition from the original management team to a new management team that includes Mr. LeMay.

Blue Point and other private equity investors have several steps in the process to manage:

  • First, the firm has to reflect on and think about what types of businesses to acquire.
  • Second, the firm needs to source deals, to select from amongst those considered as to which to pursue, and to then compete for and close those acquisitions.
  • Third, the fund needs to manage the investment and to take the business invested in to another level of performance.
  • Finally, the investor needs to navigate to an exit/ liquidity event.

Mr. LeMay pointed out that the most frustrating part of his work is to be unable to close on an acquisition opportunity after falling in love with it.

Mr. LeMay notes that Blue Point pursues an acquisition opportunity where they believe that they have a compelling advantage as an acquiror, from the standpoint of the change they believe they can drive in the asset.

Blue Point likes to think that it loses deals only because of price and not because of other, intangible, factors.

The market for acquisitions is at an all time high, and Mr. LeMay notes that deals will today typically close at 10% more than they were at when the management presentations take place.

In this frothy market, deals are expected to close quickly also, in 8 days on average from when the buyer is selected which puts tremendous pressure on the players to move swiftly.

Blue Point is typically looking for acquisition opportunities that meet the following criteria:

  • A family-held businesses
  • with a platform already in place,
  • where there is a clear path to grow the business and add value to it,
  • with a favorable risk profile,
  • and a high franchise value.

Mr. LeMay points out that Blue Point has historically had an advantage over many other private equity investors in that Blue Point has had an office and a partner, Chip Chaiken, in Shanghai. Blue Point has been able to use this presence and expertise in Asia to benefit businesses it has acquired.

Blue Point also has tremendous digital expertise which enables it to assist businesses it invests in with digital marketing, e-commerce, big data, etc. This can be used to benefit portfolio businesses.

Mr. LeMay pointed out that Blue Point prefers to invest in family-owned businesses with managers who have a capacity for growth. That said, investors are given only limited opportunities to meet with and access management, and over time the risk associated with that management – and whether they have capacity for growth – has essentially been shifted to the investors.

Looking ahead, Mr. LeMay feels that the future for private equity investing is bright, despite the fact that multiples and prices and therefore the opportunity for returns going forward are more limited than in the past. Investors in funds like Blue Point’s continue to invest despite the perhaps more limited prospects for returns going forward, because even these projected returns are higher than what the investors expect to be able to generate from the public markets.

Mark your calendar for Friday, November 16, 2018, for our next CFE program which will feature Bassam Mansour, of Resilience Capital, as our presenter.

 

Original Event Post:

Private Equity Investing


As we know, the Private Equity Industry ended 2017 with close to $556 billion in “dry powder” available for investment in privately held companies. Business valuations have increased to reflect increasing demand for private deals. Established PE firms have been busy converting their investments to cash and searching (with difficulty) for new desirable investments.


Blue Point Capital Partners does this work well. The firm manages over $1.5 billion in committed capital across its second, third and fourth institutional funds and currently owns 12 companies in its portfolio. Through the Private Bank at J.P. Morgan, the firm delivers customized wealth management advice and solutions to wealthy individuals and their families, leveraging its broad capabilities in investing, family office management, philanthropy, credit, fiduciary services and special advisory services to help its clients advance toward their own particular goals.


A twenty-year veteran of Blue Point, John LeMay will talk about Blue Point’s investment approach, recent transactions, their view of the next few years for PE investors and his activities with Breakthrough Schools.


Join John and an engaged audience and get insights to these topics and more along with Q & A at the Cleveland Racquet Club. Check in and complimentary breakfast starts at 730a, Panel starts at 750a. This event is complimentary and by invitation only.


Prior to joining Blue Point in 1998, John was with the Boston Consulting Group, Inc. where he led strategy and operational effectiveness studies for a range of Fortune 500 companies. Prior to attending business school, John was with Salomon Brothers in Chicago and Sydney, Australia, and focused on mergers and acquisitions advisory assignments.

John graduated with a B.S. in Economics and Finance from Miami University and received his M.B.A. from the Kellogg Graduate School of Management at Northwestern University. John serves as a director of Italian Rose and Hilco Vision. He previously served as Chairman of the Board for a number of Blue Point investments including JTM Foods, Packers Sanitation Services, Quality Synthetic Rubber and Apex Companies.

Outside of the office, John enjoys spending time with his wife, daughter and son, and his interests include travel, SCUBA diving and coaching youth sports. Against his better judgment he remains an avid Cleveland sports fan. John also serves on the Board of Trustees and as Investment Committee Chairman at Hawken School and serves on the Board of Directors and as Investment Committee Chairman at Friends of Breakthrough Schools, a group of high-performing charter schools in Cleveland.


Blue Point invests in market leading lower middle-market companies in the sectors of manufacturing, business services, consumer products and value-added distribution.


Who should attend? Investors, managers or advisors to businesses.


Please join us at the Cleveland Racquet Club. Check in and complimentary breakfast starts at 730a, Panel starts at 750a. This event is complimentary. Please register in advance. This event is the seventeenth in our series which started about 3 years ago. We have had more than 1,000 attendees including nearly 100 at each of 2 recent events. If you like to learn, meet, eat and have fun, then join us. 


Moderator: David Brownco-Founder of the Center, provides advice on the acquisition, sale or restructuring of family or founder-owned middle market businesses.


Program Host: Ben Calkins leads The Calkins Law Firm. He is co-founder of the Center. 


Thank You to Our Sponsors!:


JP Morgan Private Bank: it is a leading provider of wealth management solutions and advice and is an important segment of JPMorgan Chase, the largest US bank and the 6th largest bank in the world. 



For more information about JP Morgan Private Bank’s services, please contact Greg KeeganVice President, Investment Specialist, Ken Greaney (216/781-2392) Vice President, Banker or John Arrowsmith, Managing Director, Investment Specialist.


The Calkins Law Firm is a premier boutique law firm that specializes in business law and focuses on business transactions and business disputes. Please contact Ben Calkins (440/796-4592).


Red Hawk Associates helps investors acquire founder or family owned firms. Please contact David Brown (216/464-8714).


A Special Note from Ben


CFE is offering, for the first time since its launch in 2015, a limited first come first come first served sponsorship opportunity. CFE has hosted 17 consecutive sold out programs since its launch.


The new sponsor, which will join JP Morgan, Red Hawk Associates and Calkins Law Firm as a fourth sponsor of CFE, will be consulted re future CFE programming and will benefit from considerable CFE related exposure including at programs, on the new Web site and in the thousands of CFE related e mails that are distributed each month to members of the business community in NorthEast Ohio. Crains Cleveland also promotes CFE’s events. As CFE’s sponsorships are all industry exclusive, the fourth sponsor should not be a bank, asset/ wealth manager, business intermediary or law firm.



Contact Ben Calkins 440 796 4592 for additional details.


Meeting Agenda


730a Continental Breakfast and Networking


750a Program


850a Adjourn


 FAQs


 Are there ID requirements to enter the event?


Pre registered guests only, please, due to space limitations.


 Is my registration/ticket transferrable?


Yes.


 Do I need to print and bring my paper event ticket?


No.


 Where can I contact the organizer with any questions?


Contact David Brown at [email protected] or 216/464-8714.


 How do I contact the professionals at JP Morgan Private Bank? 


For more information about JP Morgan Private Bank’s services, please contact Greg Keegan, Vice President, Investment Specialist, Ken Greaney (216/781-2392) Vice President, Banker or John Arrowsmith, Managing Director, Investment Specialist.