Creating Sustainable Value Through ESG
With a pioneering commitment to ESG, Blue Wolf focuses on operational, strategic and financial discipline to responsibly transform companies. By applying an ESG lens to each company, we identify and execute on opportunities where complexity can deter other investors and obscure intrinsic value. To that end, we have identified seven core ESG themes that are foundational to our investment strategy. They are:
We then work closely with management to implement growth strategies to position companies to thrive over the long-term, creating sustainable value for both our investors and the communities in which they operate.
Blue Wolf 2022 ESG Report
Blue Wolf ESG Policy
Blue Wolf DEI Policy
Recent Activity
ESG Committee
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Bennet
GrillChairMr. Grill is a Principal at Blue Wolf Capital Partners and serves as Chair of Blue Wolf’s ESG Committee. Prior to joining the firm in 2012, Mr. Grill worked as an analyst in the Mergers & Acquisitions group at Citi.
Mr. Grill serves on the Board of Directors of Twin Rivers Paper Company, The State Group, Fox Rehabilitation, KDB, RHA Health Services, and Welch & Rushe. He received a B.S. in Economics from Duke University and is a member of Duke University Financial Partners.
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Michael
MusuracaCo-ChairMr. Musuraca is a Strategic Advisor of ESG and Labor at Blue Wolf Capital Partners. He is an internationally-known leader in the fields of responsible investing, pension fund and corporate governance, and collective bargaining. He advises Blue Wolf’s Principals and portfolio companies on these matters.
Prior to joining the firm in 2009, Mr. Musuraca was an Assistant Director in the Department of Research and Negotiations, District Council 37 of the American Federation of State, County, and Municipal Employees (AFSCME), AFL-CIO. District Council 37 is one of the largest public-sector unions in New York City, representing 125,000 members who work for the City of New York, its covered organizations, and certain agencies of the State of New York. He worked for District Council 37 from 1988 to 2009.
From 1996-2009, Mr. Musuraca was a designated trustee to the New York City Employees Retirement System (NYCERS), a 300,000-plus member pension fund. He also served, from 1997 until 2009, as a trustee to the Cultural Institutions Retirement System (CIRS) – a fund with members from the major cultural institutions and day care facilities in the New York City metropolitan area. Mr. Musuraca was also a founding member of the Principles for Responsible Investment (PRI) Board and was the labor representative to the Advisory Board of the New York City Independent Budget Office. He previously served on the board of Sustainalytics, was chair of the Verité board and currently serves on the PRI Private Equity Advisory Committee and is a member of the advisory committee of the Investor Alliance for Human Rights.
Mr. Musuraca received a B.A. in Political Science from New York University, a M.A. in American History from the University of Massachusetts/Boston, and a Master’s in Philosophy from the Graduate Center, City University of New York. He has published a number of papers on labor affairs and urban history and politics in academic journals and has taught in the Department of Urban and Labor Studies at Queens College, City College, Rutgers University, and the New York City campus of Cornell University.
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Richard
WinegarCo-ChairMr. Winegar is the Chief Operating Officer at Blue Wolf Capital Partners and is the architect of Blue Wolf’s Operating Partner, Safety, Health and Environmental, Cyber Security, and Procurement programs, and a founding member of Blue Wolf’s ESG program. Mr. Winegar has over 30 years of diverse experience across industries including oil & gas, chemicals, pharmaceuticals, healthcare and industrial equipment; as a senior executive, an advisor and a private equity operating partner. Since joining Blue Wolf, he has served as the interim COO of Pearl Technologies (Gloucester), ModernMD Urgent Care, and National Home Health Care. Mr. Winegar oversees internal Blue Wolf operations and Blue Wolf’s ESG, portfolio, Operating Partner and Strategic Advisor programs.
Prior to joining the firm in 2012, Mr. Winegar worked at Capgemini Consulting and served corporate and private equity clients in vaccine manufacturing, pulp and paper, Department of Defense, and capital equipment manufacturing. During this period, Mr. Winegar began his collaboration with Blue Wolf, serving as Lead Engagement Partner for Transformation Initiatives at Finch Paper Company and Pearl Technologies, and serving as interim COO at Channel Technologies Group.
Previously, Mr. Winegar served as a Principal at Tunnell Consulting, a leading operations and compliance consultancy serving Fortune 100 clients in life sciences. Prior to that, he held a variety of roles of increasing responsibility at American Cyanamid, a global agriculture and specialty chemicals producer. Mr. Winegar began his career at Chevron USA as a Production and Facilities Engineer overseeing the design, contracting, and installation of offshore oil and gas production facilities in the Gulf of Mexico.
Mr. Winegar serves on the Board of Directors of Edge Industrial Technologies. He received a B.S. in Mechanical Engineering from the University of Missouri-Columbia and a M.B.A. from Columbia University.
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Kelly
CullinanMs. Cullinan is the Portfolio Reporting Manager at Blue Wolf Capital Partners. Prior to joining the firm in 2020, she worked in the Investment Management group at Deloitte & Touche, primarily auditing private equity funds.
Ms. Cullinan received a B.A. and M.S. in Accounting from Fairfield University. She is a Certified Public Accountant and member of AICPA.
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George
JuddMr. Judd is a Strategic Advisor of Building Products and Industrial Distribution at Blue Wolf Capital Partners. He has spent his career managing turnarounds and growth strategies of under-performing businesses, including as CEO of Novo Building Products and previously as President and CEO of Blue Wolf’s former portfolio company, Snappy Air Distribution Products, where he transitioned from a Board role to CEO, rebuilt the management team, rationalized manufacturing facilities and repositioned the company for profitable growth and acquisitions.
Mr. Judd served as CEO of PrimeSource Building Products, North America’s largest fastener company. He led PrimeSource through its transition to a private equity sponsored company while growing revenues and earnings. Mr. Judd has also served as President and COO of BlueLinx Holdings from 2004 to 2008 and was President and CEO from 2008 to 2013. He was instrumental in guiding the company’s transition from a division of Georgia-Pacific Corporation to an independent, publicly held company. During his 20-year career at Georgia-Pacific, George held a series of positions managing sales, operations, and production in the Building Products Distribution Division.
Mr. Judd serves on the Board of Directors of Hardwood Distribution Incorporated (HDI), Sterling Site Access Solutions and serves as the Chairman of the C&C Forest Products board of managers. He is also an advisor to Ajustco. Mr. Judd has previously served on the Board of Directors of American Builders Supply, Suwannee Lumber Company, The Mulch & Soil Company and the Harvard Joint Center for Housing, PrimeSource Building Products and the Advisory Board of DOCU-SIGN. He received a B.A. from Western Connecticut State University.
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Kate
SpazianiMs. Spaziani is the Director, Government Affairs and Communications at Blue Wolf Capital Partners and has more than two decades of experience in government and public affairs. Prior to joining the firm in 2021, she spent over seven years at the NewYork-Presbyterian hospital system, serving as Vice President of Communications, External Affairs, and Federal Relations. Prior to that, Ms. Spaziani was a consultant with Sachs Policy Group and worked on Capitol Hill in numerous roles, including Senior Policy Advisor to U.S. Senator Kent Conrad, Legislative Director to U.S. Representative Ron Kind, and Legislative Assistant to U.S. Representative Marion Berry.
Ms. Spaziani received a B.A. from Duke University and a J.D. from Georgetown University Law Center.
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Key Affiliations
United Nations Principles for Responsible Investment
Blue Wolf became one of the first middle-market PE funds in the U.S. to sign the Principles in 2009. Michael Musuraca, our Strategic Advisor of ESG and Labor, is a member of the PRI Private Equity Advisory Committee.
Ownership Works
Ownership Works was founded in 2021 to scale shared ownership as a means of addressing economic insecurity.
ESG Data Convergence Project
The project is a collaboration between LPs & GPs to create a critical mass of performance-based, comparable ESG data
from portfolio companies.
Sponsorships
Using the SDGs as a Guiding Light: PEI Keynote Interview
The UN’s 17 Sustainable Development Goals are often referenced as part of efforts to promote social and economic development in developing countries. New York-headquartered Blue Wolf Capital Partners, however, also sees the goals as valuable in helping to guide its strategy for a portfolio that largely consists of US-based healthcare and industrial companies.
Adam Blumenthal, the firm’s founder and managing partner, tells Private Equity International that by providing a framework for stakeholder value creation, the SDGs complement ESG frameworks that emphasise quantitative reporting of key performance indicators. Blue Wolf, he says, has found that ensuring portfolio companies deliver on the SDGs puts these businesses on a stable long-term footing and helps generate returns for investors.
Question: Why is private equity investing suited to promoting ESG principles and the SDGs?
As a private equity firm, we design the strategy through which our portfolio companies generate value and secure returns for our investors. We take seriously the choices we make in doing that – there is more than one path to value creation. As a private equity GP, you have the ability to make those choices and to control critical aspects of how companies behave.
At Blue Wolf, we think of environ-mental, social and governance considerations as being a crucial part of our strategy for building companies that are going to have long-term sustainable value. Every time we make a decision to focus on ESG, we make a choice to create value for our investors – and I argue this approach has been critical to our ability to generate top-quartile re-turns over our history.
The Sustainable Development Goals represent a global consensus on what kind of companies and societies are going to support long-term sustainable growth. It is important to us that we take into account the SDGs, since these set the parameters for the long-term macro environment within which our businesses operate.
Question: What do LPs expect from you in terms of ESG?
There is a range of investor sentiment. We have LPs that are purely interest-ed in whether we are delivering on our return forecasts. They are less interested in the underpinnings of our strategy. All they know is that it works, and that is fi ne with them when we post the numbers.
Then there are investors for which the SDGs and other global regulatory or ESG frameworks are important. We have a sustained dialogue with investors that look for GPs to align their strategies with the SDGs while generating attractive returns – and some of these investors have become loyal and substantial investors in our funds. One of the great things about the strategy we have embraced is that we can draw a direct link between the achievement of ESG goals and financial performance.
Question: To what extent is a standardised framework helpful to private equity investors looking to manage ESG risk and opportunities?
There is a lot of discussion around frameworks in the ESG world. It is worth bearing in mind that some 2,000 years after the initial development of double-entry bookkeeping, we still have not come up with a standardised financial accounting framework that people accept across the globe. To get to a standardised framework for dis-cussing the ESG aspects of investment will take time.
It is positive that there is so much effort today being put into creating those frameworks. It is helpful that frameworks are emerging that allow for the quantification of easily report-able KPIs, because quantification and standardisation are important for the development of data that can be measured and managed. However, these frameworks are often not easily correlated with value creation.
The SDGs are a type of framework that can link to strategy, outcomes and value creation, considered broadly – that is value creation not just for the company, but for societies and economies as a whole. They provide a framework for stakeholder value creation and having a common language for discussing stakeholder value creation will ultimately be an important part of the maturation of the ESG movement. Of all the frameworks out there, that aspect of what ESG is about is extremely well captured by the SDGs.
Question: Looking forward, how can the private equity industry better align with the SDGs?
The growth of private capital markets and private equity into a significant force in the global economy has been one of the defining economic developments over the course of my career. As the private equity industry has matured, its responsibility to the broader economy has become more evident.
As it continues to mature, we need to focus more on the principles through which the private equity industry contributes to the global economy. For instance, many private equity funds – both at the largest level and in the mid-market – have been pursuing the idea of employee ownership as a way of addressing inequality. Over the course of the next five years, I think we are going to see that idea sweep through the private equity toolkit. After all, what is more in keeping with private equity’s reason for being than creating aligned incentives to drive growth throughout the portfolio? That is what the private equity industry is about.
Question: How has Blue Wolf operationalised its approach to ESG integration and alignment with the SDGs?
Like most private equity firms, we are strong believers that you cannot man-age what you do not measure. So, if we are committed to an ESG strategy, we need to capture core metrics, report them consistently over time, and drive them towards a value-creating outcome.
For example, we have established a safety, health and environmental programme that seeks to establish top-quartile safety, health and environ-mental performance and compliance at every portfolio company. We have developed a disciplined, metrics-based approach to measuring our progress, and we tie progress to executive compensation. By doing that on a consistent basis, we have had a great deal of success in moving the portfolio in the right direction.
Aside from capturing metrics, we integrate core ESG themes into the creation of our investment strategies. We have identified seven core ESG themes – every one of which is easily linked to one or more of the SDGs – that are fundamental to our investment strategy, and we look at those thematically as foundational to the value-creation strategy in our portfolio. By linking the metrics-based and thematic approaches to value creation, we think we have created a broad and robust programme.
Question: Blue Wolf is mainly focused on the US market– are the SDGs as relevant in this context as in emerging markets?
There is a growing problem of inequality in industrialised societies. This is broadly recognised as something that needs to be addressed to sustain competitiveness and growth, and I think the SDGs are an excellent framework for discussing those kinds of issues.
About half of our portfolio is health-care-related and one of our principles is to support the healthcare framework Triple Aim – which means achieving better health, at a lower cost, with a higher level of patient satisfaction. An-other principle is to invest in under-served communities, both in rural and urban areas. Both principles are well aligned with the SDG goals of improving health and wellbeing and reducing inequality.
An example of this in practice is Blue Wolf’s investment in Modern-MD, a healthcare company in Brooklyn, New York. We established the company in a joint venture with a local hospital in 2014, after the passage of the Affordable Care Act. Our ESG scan highlighted that the influx of newly insured people would give us the opportunity to address the large unmet demand for primary care in Brooklyn and to create jobs in an underserved community. Fast forward to today, and that company has delivered primary care, plus covid vaccines and testing, to more than 225,000 people during the past year. Naturally, that makes ModernMD a vital part of the community. That is a great example of using ESG principles and the SDGs to have an impact while generating returns for our investors.
Question: Outside of Blue Wolf’s healthcare portfolio, how do you implement your ESG principles?
Our firm began life making industrial investments, so we have a long, proven track record of building companies through this strategy. Some of the in-vestments we made along this route have been in the rural American South, building sawmill companies. We initially invested in a sawmill located in rural Dixie County, Florida, which has one of the highest poverty rates in the state. The sawmill was a vital local employer, but it also had significant environmental contamination issues that had put the company at risk.
We had the opportunity to acquire the company and then put our capacity for brownfield remediation – which we developed in connection with our ESG goals – to work. We became part of a broader community effort to promote economic development and, as a result, became an employer of choice in the region.
That company then doubled profit-ability and became marketable because of the brownfield remediation. We did something similar with a closed saw-mill in Arkansas, which we reopened and revitalised. That generated great returns for our investors, and for those communities in Florida and Arkansas it created jobs and a clean environment for people who may otherwise have had to move away to find employment opportunities.