March 21, 2017 . Dallas,TX – Chijioke Asomugha, Co-Founder and Managing Partner of The Inkwell Group, spoke candidly to a rarefied group of business luminaries at the 2017 Board Leadership Forum. The conference, held at the sprawling Deloitte University campus in Westlake, Texas, played host to diverse corporate board members of the Fortune 500 and Fortune 100 community as well as well as C-suite executives from some of the leading US headquartered Healthcare, Technology and Industrial companies in the world. The theme and message of the three-day event was Moving the Diversity Needle in the Boardroom. “The Inkwell Group was honored to be a participant in this distinguished event. As a private equity firm, we recognize and embrace the value creation achieved by truly diverse leadership teams. The accomplished individuals in attendance serve as both inspiration and continued support of our management strategy to spark innovation and generate attractive returns through operational enhancements including diverse board leadership,” said Mr. Asomugha. The Inkwell Group would like to thank Deloitte and all the leaders of the Forum for their keen interest in our message.
By Jeremy Nobile, Crain’s Cleveland Business
There’s another new private equity firm taking root in Cleveland, but it’s the firm’s focus on diversity in its investment strategy that seems to be setting it apart in a crowded and growing industry.
The Inkwell Group launched earlier this month with base offices in Cleveland and Washington, D.C. Co-founders Marques Martin, 33, and Chijioke Asomugha, 36, will be looking nationwide for deals, but focusing predominantly on lower middle market manufacturing and service companies with up to $10 million in annual EBITDA (earnings before interest, taxes, depreciation and amortization).
Besides having strong ties to the Cleveland investment market — Asomugha was formerly an executive vice president who oversaw mergers and acquisitions at Solon-based manufacturer ERICO International Corp. and a principal investor at Cyprium Partners, while Martin’s résumé includes overseeing KeyBank’s small business team and serving as an investment professional at The Riverside Co. in its micro-cap fund — a presence here underscores the opportunity they see for finding deals in Northeast Ohio and the greater Midwest.
The challenge, of course, will be finding the best companies flying under competitors’ radar, particularly as fundraising in the private equity space has been so strong.
That’s resulting in a buildup of dry powder as more dollars chase fewer deals, Martin acknowledges, creating the seller’s market that’s prevailing today as business valuations grow.
But those are simply the challenges for any investor in today’s market.
To set itself apart from others — and capitalize on a building body of evidence showing that diverse boards and executives result in stronger companies — the firm is building a goal of diversity into its investment approach.
It’s a pitch the duo was working on as their professional work connected them together in Cleveland as each dreamed of starting their own business. While not entirely novel, it’s an approach few firms expressively embrace.
“Private equity firms are popping up every day, and they all tend to say something very similar,” said Martin, who is running Inkwell’s Cleveland base. “There is proven research supporting the case for diverse management teams and diverse boards. It helps drive value. And that’s what a private equity firm should do.
“We think some people are just leaving this lever off,” he added, “or simply not attacking it the way we are going to go about it.”
According to The National Association of Investment Companies, an industry association of diverse-owned and emerging manager private equity firms and hedge funds, an analysis of financial returns of NAIC firms between 1998-2011 showed those companies significantly outperforming the broader private equity market.
The study — their most recent analysis — showed NAIC firms achieving investment returns on average of 20.9%, compared to 11.8% for all U.S. private equity. NAIC firms also saw returning capital to investors at 160%, compared to about 67% for the broader market.
For Inkwell, when the company makes control investments, the goal will be to inject diverse people into executive and boards roles, possibly expanding boards in some cases to take on more people.
That approach would likely work better for smaller companies the firm is looking for anyhow, Martin said. In many cases, those are led by small, homogeneous teams anyway. And while that may not be an inherently bad thing, the facts are that diverse leadership in terms of race and gender generally leads to stronger businesses and, in the for-profit investment industry, better returns.
“Smaller companies tend to have incomplete management teams as it is,” Martin said. “The notion that we’re going to build their management teams tends to be less controversial to begin with. And with the ability to influence these companies versus larger companies by making some key hires at the top level, we can grow a culturally diverse culture.”
Besides being a smart strategy, the diversity is of personal importance to this team as well, Asomugha said.
“We do truly believe in this inclusive model,” Asomugha said. “It’s not just about having the best and brightest people, but having equal representation in these companies to drive value. It’s a way you can spark innovation and growth in these companies.”
With two associates, Inkwell currently includes four people. They’re currently looking for investments on an ad hoc basis.
If things go “according to plan,” Martin said, the whole team will grow to seven before the end of next year. When they’re ready to raise their first formal fund and eventually debut it within the next two years, they plan to have a team of about 20. They plan to do between two to four deals by then.
In a private equity sector ripe with players and capital, the diversity message may not only help Inkwell differentiate itself from others, but, according to the numbers, it could result in even better returns.
And that’s a message that speaks for itself.
“The reception has been warm from that group (of investors),” Asomugha said. “There’s a lot of interest in what we’re trying to do, and that’s been helpful from the fundraising standpoint as we begin our outreach. We’re excited to bring this differentiated model to the marketplace.”
Samantha Sabin, www.dcinno.streetwise.co/
The Inkwell Group, a private equity firm investing in healthcare, financial services, industrial manufacturing and media & telecom has landed in D.C. — and with them, they’re bringing a new way of bringing more minorities into executive positions.
Here’s how the program, called the “Executive Suite,” works: business people interested in taking a leadership role at a company or who might want an opportunity to be a company advisor apply to the group’s Executive Suite. The Inkwell Group will then pull from its program pool of accepted applicants the next time they have a company that might be looking for a new C-level executive, board member or advisor.
Right now, they have about 10 professionals in the pool now who happen to be both women and minorities, including retired executives and experts in the field.
“It is not something where you are necessarily looking for a job right now,” said co-founder and partner Chijioke Asomugha. “But really it’s about wanting an opportunity to be a leader of a growing company, whether you’re employed or not.”
The Inkwell Group, which is minority-owned, is based both in the District and in Cleveland, Ohio, where the two co-founders, Asomugha and Marques Martin, are based. The two partners met while they were both working in private equity in Cleveland.
Between the two of them, they have completed and advised more than 20 acquisitions and divestitures totaling $3 billion before launching The Inkwell Group. The firm plans to invest between $3 million to $30 million in equity per group and focus more on middle-to-late stage investments.
“When you think about a place like Washington, D.C. and just the amount of talent that is in the market, in terms of people who can come and be a part of The Inkwell Group team, as well, it’s significant,” Asomugha said.
“You don’t get more diverse than a city like D.C.”
Moving forward, because they make investments nationwide, the group isn’t worried about how their strategy will change — even once the new administration moves into the White House.
“Our strategy in the marketplace is not reactionary to anything that is going on in the current economic or political climate,” Martin said. “So we view the focus on diversity at the executive level as something that we think is good for business, no matter who is in office and what is going on in the economy.”
Luisa Beltran, www.PEHub.com
- Inkwell will seek to invest between $3 mln to $30 mln equity per deal
- Will invest deal by deal
- Wants to add diverse executives to portfolio companies and boards
- The Inkwell Group launched with the goal of building value by adding diversity to its portfolio companies.
Founded by Chijioke Asomugha and Marques Martin, two PE executives of African-American descent, the lower middle market firm will install diverse executives and boardroom leaders at its PE holdings. Martin pointed to the “Inkwell suite,” which currently has 10 operating executives, that will serve as a “bench of diverse talent” that they will “thrust into action.”
Diversity can mean many things, Martin said. Inkwell — which refers to the ink used to write out aspirations and tell one’s story — will focus on racial and gender diversity, he said. Companies perform better when employees are not judged by their looks and are able to be themselves, Asomugha said. “Diversity helps people feel comfortable about what they are,” he said. “They are able to deliver their best selves.”
Inkwell has offices in Washington D.C. and Cleveland. It will focus on sectors including healthcare, financial services, industrial manufacturing, as well as media & telecom. The firm will seek to invest between $3 million to $30 million equity per deal, taking controlling stakes.
Inkwell plans to execute two to three deals over the next year and expects to close its first deal in Q1, the executives said. Inkwell also does not have a fund but has relationships with high net-worth individuals and family offices that lets it invests on a deal-by-deal basis, the executives said. “We will start marketing a commingled fund within two years,” Asomugha said.
Asomugha and Martin have backgrounds in PE, investment banking and operations. Asomugha was the executive vice president and global head of corporate development at ERICO International. He was also a principal investor at Cyprium Partners and previously worked at Goldman Sachs.
Martin, most recently, was a senior VP at KeyBank, where he directed the small business team with $4 billion of assets. He had prior roles at The Riverside Company and H.I.G. Ventures.
The two executives met in Cleveland in 2009. The U.S. was in the midst of the financial crisis and diversity was not a primary goal for private equity. There were very few— only three— African-American PE professionals working in the city at the time, they said. A mutual friend introduced them and they hit it off.
Both Asomugha and Martin referred to the 2015 McKinsey & Co study, Diversity Matters, that found companies with the most diverse gender leadership teams were 15 percent more likely to produce financial returns that were above the national industry median. The results were better for ethnic/racial diversity. These companies were 35 percent more likely to have financial returns above the national industry median.
Inkwell itself will also seek to be diverse and wants women represented at the GP level, Asomugha said. The firm currently numbers four professionals, including two associates (one is Indian, the other is Asian). It is looking to hire and plans to have seven employees by next year.
“Yes, we plan to be diverse throughout our firm. To live the model that we are investing in,” Asomugha said.
The PE firm, founded by Chijioke Asomugha and Marques Martin, launches with vision to build value through creation of diverse leadership teams
By Kamaron Leach, November 18, 2016 www.themiddlemarket.com
At a time when independent sponsors are giving private equity firms a run for their money, two investment bankers have teamed up to form a new firm with a distinct approach. Co-founders Chijioke Asomugha and Marques Martin have launched The Inkwell Group LLC to leverage racial and gender diversity.
The firm, based in Washington, DC and Cleveland, Ohio, will look to enhance lower middle-market companies through the addition of diverse executive and boardroom leadership. The firm’s investments will target businesses within the healthcare, financial services, industrial manufacturing, and tech, media and telecom industries. On average, The Inkwell Group anticipates investing from $3 million to $30 million in equity to companies with up to $10 million in Ebitda. The firm has yet to make its first investment, however plans to invest on a deal-by-deal basis before establishing its first fund.
“Our goal is to help owners receive partial liquidity while remaining invested in the growth of their companies, should they so choose,” states Martin.
“We are focused on driving growth and believe in the additive impact that diverse executive perspectives and an inclusive culture can have on that process,” states Asomugha. “Small businesses rarely have complete management teams and tend to seek support within their existing network, resulting in group think that runs contrary to igniting innovation. Our approach directly addresses this obstacle to growth.” As part of the firm’s strategy to leverage diversity, Asomugha and Martin have created The Inkwell Executive Suite, a leadership network for experienced women and minority executives to source deals. Companies found in the top quartile for gender and ethnic diversity are are 15 percent and 35 percent, respectively, more likely to have financial returns above their national industry medians, according to a 2015 McKinsey & Co. report.
Asomugha, prior to launching the new firm alongside Martin, led corporate development at Erico Global Co. for three years. Before then, he served as a senior associate at private equity firm Cyprium Partners and also worked in investment banking for Goldman Sachs Group Inc. (NYSE: GS). Asomugha holds a Bachelor of Arts degree in Economics from Stanford University and also received his Master of Business Administration degree in Finance and Management from Columbia University.
Martin, who received his Bachelor of Arts degree in Business Administration from Morehouse College, brings nearly 10 years of industry experience to the firm. Before establishing The Inkwell Group, he served as a senior associate for The Riverside Co., worked as an analyst for H.I.G. Capital, and most recently led KeyBank’s (NYSE: KEY) small business team as senior vice president. KeyBank’s small business team managed approximately $4 billion in assets at the time.
The Inkwell Group coming to market is rather timely as some executives say minorities and women are “grossly under-represented” in the sector. In fact, Robert L. Johnson recently launched his investment bank, RLJ Capital Markets, for some of those very reasons. Johnson owns middle-market private equity firm RLJ Equity Partners and founded Black Entertainment Television. Johnson is no stranger to paving the way for minorities in business.
By Laura Cooper, Wall Street Journal, Private Equity Pro
Aiming to increase racial and gender diversity within the executive ranks of portfolio companies to drive greater returns, two industry professionals have launched Inkwell Group.
Chijioke Asomugha, formerly of Cyprium Partners, and Marques Martin, previously of Riverside Co. and H.I.G. Ventures, co-founded the firm, which seeks to bolster lower midmarket companies “through the addition of diverse executive and boardroom leadership,” according to a news release.
The new firm, with offices in Washington, D.C., and Cleveland, said it plans “to leverage the proven power of racial and gender diversity to enhance business performance and build value.”
According to a 2015 report by McKinsey & Co., companies in the top quartile of gender diversity were 15% more likely to have financial returns above the median, while companies in the top quartile of racial and ethnic diversity were 35% more likely to have returns above the national industry median.
Mr. Martin said he and Mr. Asomugha met in Cleveland while both men were working in the private-equity industry. He said they decided to launch the firm after seeing “the real value that private equity can bring to lower middle-market companies.”
Mr. Martin said while Inkwell is primarily focused on driving attractive returns, he noticed that private-equity firms haven’t taken advantage of the “facts that show the more diverse the management teams are, the higher the returns.”
Inkwell targets control investments in what it calls the “fragmented industry subsectors” in health care, financial services, industrial manufacturing, and media and telecommunications.
The firm seeks to invest $3 million to $30 million of equity per platform in manufacturing and service companies with annual earnings before interest, taxes, depreciation and amortization of up to $10 million.
Inkwell said it is investing on a deal-by-deal basis “prior to a debut formal fund within three years.”
The firm is partnering with family offices, high-network individuals and possibly a few institutions to make acquisitions, said Mr. Asomugha. Inkwell plans to raise a fund in the next two to three years, he said.
The firm has yet to make an acquisition, but is aiming to complete one in early 2017, said Mr. Asomugha.
Mr. Martin said the firm will be finding diverse talent to staff the executive roles of portfolio companies through his and Mr. Asomugha’s networks. He added they have 10 professionals lined up to play various roles in companies. He said these roles include executive positions, operating partners and advisers.
WASHINGTON and CLEVELAND, Nov. 16, 2016 /PRNewswire/ — The Inkwell Group, LLC, a new private equity firm, has launched with a distinctive strategy to leverage the proven power of racial and gender diversity to enhance business performance and build value. Co-Founders Chijioke Asomugha and Marques Martin are experienced operators and investors who have previously completed and advised on more than 20 acquisitions and divestitures totaling more than $3 billion of transaction value.
In addition to providing operational expertise and strategic support, The Inkwell Group seeks to enhance lower middle-market companies through the addition of diverse executive and boardroom leadership. Numerous studies have shown correlation between diversity and financial performance, including a 2015 McKinsey report which found companies in the top quartile of gender and racial diversity were 15 and 30 percent more likely to have financial returns above the industry median, respectively.
“We are focused on driving growth and believe in the additive impact that diverse executive perspectives and an inclusive culture can have on that process,” said Asomugha, who previously worked at private equity firm Cyprium Partners and Goldman Sachs. “Small businesses rarely have complete management teams and tend to seek support within their existing network, resulting in group think that runs contrary to igniting innovation. Our approach directly addresses this obstacle to growth.”
The Inkwell Group targets control investments in fragmented industry sub‐sectors within Healthcare, Financial Services, Industrial Manufacturing and Media & Telecom, where it has strong experience and relationships. The firm will invest from $3 million to $30 million of equity per platform in proven lower middle-market manufacturing and service companies with up to $10 million in annual EBITDA. The Inkwell Group is currently investing on a deal‐by‐deal basis prior to a debut formal fund within three years.
“Our goal is to help owners receive partial liquidity while remaining invested in the growth of their companies, should they so choose,” said Martin, previously at Key Bank, where he directed the small business team with $4 billion of assets, and private equity firms Riverside and H.I.G. Ventures. “We’re confident combining our management and operations expertise with our well-defined investment methodology will achieve this result while generating attractive returns for our investors.”
The Inkwell Executive Suite
As part of its strategy, The Inkwell Group has created and oversees The Inkwell Executive Suite, a leadership platform attracting experienced women and minority executives. The Suite acts as a deal sourcing network for the firm and is a mentoring and coaching resource for Inkwell Group portfolio executives. It also provides a pool of accomplished operating partners to augment existing portfolio company management as C-level executives, advisors or board members.
“The Inkwell Executive Suite enables us to bring our companies the diverse talent and expertise critical to success,” said Martin. “We are excited to discover and provide opportunities to leaders of all backgrounds who can bring value to our portfolio companies.”
Empowering Small Business Management
“Small business is the creative engine that drives economic growth and we are investing at its forefront, helping companies innovate and impact their industries,” said Asomugha. “Our investment goes beyond financial resources, providing businesses with the operational and strategic expertise needed to achieve their next stage of growth.”
The Inkwell Group supports management teams through investment in ongoing education, leadership development and mentorship to drive performance. In addition, Asomugha and Martin seek to apply the latest research and analytics from management science to improve teams’ ability to arrive at optimal solutions to complex business challenges.
“We work to empower, develop and mobilize portfolio companies’ existing and new executives, so each business builds the knowledge and processes for future success,” explained Martin. “The goal is to create a sustainable, vibrant culture that cultivates innovation and spurs growth.”
About The Inkwell Group
Based in Cleveland and Washington D.C., The Inkwell Group is a growth- and operations-oriented private equity firm focused on control investments in innovative lower middle-market manufacturing and service companies. The Inkwell Group was founded with a vision to build upon the story of its companies by creating a vibrant culture that cultivates innovation and ignites significant growth. It does this by partnering with existing management teams to enhance their executive and boardroom leadership with diverse talent, while maintaining a focus on the personal, professional and economic aspirations of all stakeholders in a transaction. For more information, visit www.theinkwellgroup.com.
SOURCE The Inkwell Group, LLC