Tony James’ family office has spawned a private equity firm backed by the Blackstone billionaire that’s courting investment firms for other members of the world’s super-rich.
Madison River Capital, made up of the former private equity team at James’ investment firm, is seeking about $400 million from family offices and institutional money managers for its first fund, with almost half the total already raised, according to a person with knowledge of the matter. The fund is set to close this year, said the person, who asked not to be identified as the details are private.
The move highlights a major change in how the septuagenarian manages one of Wall Street’s biggest fortunes. James previously oversaw his private equity investments through his New York-based family office, Jefferson River Capital, where Madison River Capital managing partner David Wittels served as president before launching the spinoff in early 2022. The same year, James stepped back from Blackstone after spending almost two decades at the company.
A representative for New York-based Madison River declined to comment.
James, formerly Blackstone’s executive vice chairman, has a net worth of about $6 billion according to the Bloomberg Billionaires Index.
James led the effort to take Blackstone public and helped transform the New York-based firm into one of the world’s largest alternative-asset managers, with current assets of about $1 trillion.
In 2021, he sold more than $1 billion of Blackstone’s stock, his biggest annual disposal in at least a decade. The following year, as Madison River started as out an independent firm, James recruited a former money manager for Laurene Powell Jobs to be chief investment officer of his family office.
Madison River oversees about $1.6 billion in assets, which includes the value of investments it still manages for James, according to regulatory filings. An entity affiliated with James’ family office committed about $60 million to become an anchor investor for the private equity firm’s fund.
Wittels helped establish Jefferson River — named after a waterway that runs through the James family’s Montana ranch — in 2016 after working at hedge fund Scopia Capital Management and Donaldson, Lufkin & Jenrette, where he overlapped with James.
While Wittels was at Jefferson River, the family office struck private equity deals for companies including the owner of US college bookstore operator Follett Higher Education and Autism Learning Partners, a provider of therapy for developmental disabilities. At Madison River, Wittels has a similar focus, seeking to buy or partner with companies in the health-care, industrials and business-services sectors, according to the firm’s website.
Madison River made its first public announcement earlier this year on a strategic investment into health-care services firm Senior Care Therapy for an undisclosed sum. Among the other senior staff who came from Jefferson River Capital’s private equity team are former Clayton Dubilier & Rice executive Richard Dresdale and managing director Michael Somma, who worked at Scopia Capital’s private equity team with Wittels.
This article was provided by Bloomberg News.