A new investment firm whose leaders include former state budget director Lee Roberts is starting out with a $100 million commitment from a local business and is looking to raise significantly more money from investors.
Roberts, who has a background in banking and investing, stepped down as Gov. Pat McCrory’s budget director last month to become one of three managing directors at the fledgling investment firm, SharpVue Capital.
SharpVue is the creation of Raleigh-based Medical Mutual Holdings, the corporate parent of Medical Mutual Insurance Co. of North Carolina, the largest medical malpractice insurer in the state, and other insurers that offer medial malpractice coverage in more than two dozen states. As a mutual insurance company, Medical Mutual Holdings is owned by its 13,000 policyholders.
Medical Mutual has committed $100 million to SharpVue, which Medical Mutual CEO Dale Jenkins called “our initial allocation.”
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Roberts said he exited state government to take advantage of the “unusual opportunity” afforded by SharpVue.
“There is the chance to create a new (investment) platform and help build it, but with the sponsorship and backing of an established capital partner,” Roberts said. “That’s an unusual combination.”
SharpVue’s strategy calls for it to invest in a mix of exchange-traded funds, or ETFs, private equity and real estate. ETFs are traded like stocks but track assets such as commodities like an index fund.
“We’re not trying to replicate someone else’s (investment) model,” Jenkins said. “We’re trying to create the new model.”
Although SharpVue is technically a subsidiary of Medical Mutual, “we are really looking at ourselves as a capital partner to SharpVue,” Jenkins said.
Jenkins noted that SharpVue’s three managing directors also have an ownership stake in the business.
The other managing directors, besides Roberts, are: Matt Mongia, an experienced private equity investor, and Geremy Connor, who previously was chief investment officer for a Philadelphia investment management firm. Roberts was executive vice president and chief operating officer at VantageSouth Bancshares and managing director at Cherokee Investment Partners before becoming state budget director.
SharpVue also plans to raise money from other investors, including, but not limited to, physicians who have policies with Medical Mutual.
“We are also very excited about making this available to the non-physician community,” Jenkins said. “We think this is going to be an attractive investment for individuals, for endowments, for corporations and other types of entities that have investable dollars.”
Minimum investment requirements for individuals haven’t yet been determined.
Neither Jenkins nor Roberts are saying how much money SharpVue ultimately hopes to raise.
“We didn’t create this business to be small,” Jenkins said. “ ... We are very optimistic and very excited that we can build something of size.”
SharpVue, which has an office in the same Spring Forest Road building where the Medical Mutual has its headquarters, is an outgrowth of Medical Mutual’s past efforts to diversify its investments. Over the years it has invested heavily in real estate, becoming the majority owner in properties valued at about $750 million.
Several years ago, the insurer started enabling the physicians it covers to become co-investors in real estate deals. That proved to be so successful, said Jenkins, that the physicians sought an expansion of the investment program.
Jenkins and Roberts actually did some brainstorming together about possible ways to do that when, said Jenkins, “Lee got the call for public service” and became the state budget director in 2014. Since that time, Jenkins periodically updated Roberts on the company’s plans and “when things got to the right point, we had more serious conversations about him joining full-time.”
“We have spent a considerable amount of time at Medical Mutual making sure that we have the right team in place,” Jenkins said. “Strategy is important, but the people who execute that strategy are really going to be the drivers of success.”