The one-stop shop for local businesses on the move. Whether the business is looking to expand, diversify, restructure, acquire, or a sale, Bluhaus provides the financial advice and capital solutions to execute its plans.
Founded in 2014 by Eduardo Inclán, Alberto Toro and Waldemar González, Bluhaus Capital is a Puerto Rico-based financial advisory and investment management firm. The firm’s advisory practice grew as a natural continuation of the founders’ investment banking careers. Bluhaus takes a “customer centric approach” to engagements, where clients benefit from the firm’s wider scope, while focusing on the specific requirements of a transaction. Bluhaus’ advisory client roster is weighted toward institutional clients but is notably shifting toward small and medium sized businesses as the firm has become more focused on its Small Business Investment Company Fund entity.
The long recession made evident the need for new forms of capital to stabilize and grow local businesses, which require capital to expand, consolidate, and/or enable ownership rejuvenation. The Puerto Rican economy continues in the process of receiving a significant funding injection from Federal Aid due to Hurricane María, the Covid-19 pandemic, among others. This additional funding is a boost to most sectors of the economy, generating a positive business sentiment and driving a notable resurgence of financial transactions activity.
Puerto Rico businesses, after having slogged through the last 15+ years of economic recession, have proven their resiliency, and with a rising economy are, in many cases, attractive investment opportunities.
Businesses have also forcibly become more operationally efficient.
In April 2020, in the midst of the COVID-19 Pandemic, and after a long licensing process, Bluhaus, through the Bluhaus Small Business Fund (“BSBF”) became the first Small Business Investment Company (“SBIC”) based in Puerto Rico in the last 30 years.
An SBIC is a privately owned and operated limited partnership licensed and regulated by the U.S. Small Business Administration (the “SBA”). The SBA encourages the creation of SBICs by qualified investment professionals and managers to increase the flow of investment capital to small independent business concerns. Many prominent U.S. companies have been the beneficiaries of SBIC financing, including, among others, Apple Computer, Federal Express, Intel Corporation, Staples, America Online, Sun Microsystems, Sybase, Callaway Golf and Outback SteakHouse.
Puerto Rico presents a compelling opportunity for an SBIC Fund. Capital availability deficit vs. other jurisdictions, commercial banks forced to reduce available credit, low asset prices, proven resilient businesses, and emerging alternative capital vehicles are some of the present factors that support the development of a Puerto Rico focused SBIC Fund. Additionally, capital is necessary for the sustainable growth of family-owned businesses, as well as the growth of firms in the tourism, healthcare, energy and agricultural sectors. An emerging entrepreneurial class of young Puerto Rico-based business owners and the human and financial capital attracted by the Act 60 tax incentive law also supports the presence of these types of alternative investment vehicles.
BSBF $60 million fund has invested over 60% of available funds in eight (8) companies to date, supporting over 800 permanent full time equivalent local jobs. Both the firm’s SBIC-fund and direct investments are industry agnostic. Past transactions have been focused on industries such as healthcare, financial services, logistics, construction, and tourism.
The firm’s advisory referrals and pipeline provide an important portion of the investment opportunities for the SBIC-fund as well as direct investments that the firm has closed on. An example is the acquisition of East Island Excursions in 2015. Today, East Island Excursions, directly overseen by Bluhaus, is the largest nautical tourism company on the Island, operating eight (8) vessels supported by 80+ employees. With tours departing from the eastern coast, southern coast, and the San Juan Bay area, Bluhaus’ vision for the company includes an aggressive expansion plan for the next 5 years – in the water and on land.
Bluhaus supports the creation of additional third-party locally managed fund vehicles. The growth of the private equity-private lending sector will help consolidate BSBF and other participants as a mainstream capital partner alternative. Bluhaus, through BSBF and future platforms, strives to continue to fuel incremental economic activity and support businesses in Puerto Rico and abroad through the complete growth cycle. Target for the Bluhaus team is for the launch of BSBF II in 2023.
