Blue Sage Grows Lush Fund –

A wildflower flourished in the untamed backdrop of the American Southwest. Austin, Texas-based Blue Sage Capital LP closed its inaugural fund with a total of $170 million of capital. The fund bloomed well beyond the firm’s original goal of $100 million, giving the budding buyout shop the opportunity to put more equity to work than expected.

The fund is earmarked for 15 to 20 investments of $5 million to $10 million each. Fair game for Blue Sage includes profitable companies with between $5 million and $100 million in revenue and between $2 million and $8 million of cash flow at the time of investment.

Nearly 99% percent of the fund’s equity came from financial institutions. Blue Sage received commitments from Wells Fargo, Bank One and The LBJ Holding Co., the latter of which invested $20 million in the fund. Other limited partners include private equity fund of funds, government entities and the fund’s three principals.

The investment vehicle is geographically-focused and will be put to work in U.S. companies based primarily, but not exclusively, in Texas and its bordering states. Blue Sage Founding Partner Peter Huff said that with the exclusion of real estate and oil exploration and production, Blue Sage will consider investments in industry sectors across the board. Fifty percent to 70% of the fund’s capital is reserved for buyouts and the remainder in growth-capital investments.

“It’s good to get out of the fund raising business and into the fund investing business. We were very exited to start looking at investments,” Huff said. Since the fund’s close in early April, Blue Sage has been focused on investing and plans to announce the close of its first deal by summer’s end.

The firm’s three founding partners-Bo Baskin, Jim McBride and Huff-relied on personal contacts and their standings as investment GPs to raise the fund. No placement agency was used. Huff was formerly a partner of both Austin Ventures and J.H. Whitney. Baskin was formerly with Goldman Sachs. McBride spent the last decade as a senior non-family executive for the LBJ Holding Co, the private investment holding company of former President Lyndon Johnson, which came in as an LP.

The fund, Blue Sage Capital LP, was named in honor of Lady Bird Johnson as a debt of gratitude for the former First Lady’s investment in the firm and also as a tribute to her decades of work toward the preservation of wildflowers. “The Blue Sage wildflower is native to Texas and does extremely well in drought conditions, so we feel that it also serves as a great metaphor for strength, longevity and perseverance through difficult times,” Huff said.