The Billionaire-Backed Nile Capital Takes Minority Stake at the Wilshire Lane Capital Company in VC.
Fast-growing firms such as the Clearlake Capital and New Entreprise Associates have been able to use funds to acquire minority stakes in investment firms to create new growth capital in booming private equity and venture capital industries. Now the market is expanding to include new companies with which founders from various backgrounds are looking for capital early in the process of building the necessary infrastructure to win the confidence of large pensions and grants.
On Friday, 32-year-old Wilshire Lane Capital, a risk capital company run by Adam Demuyakor, announced the sale to Nile Capital Group of a minority interest. In 2019, Demuyakor, a risk capitalist with blue-chip companies Andreessen Horowitz andFifth Wall Ventures, founded Wilshire Lane in order to invest in early-stage immobilization companies, which grow rapidly as landowners convert retail and office assets into a space of residence, self-storage and logistics.
Demuyakor wanted to initiate Wilshire Lane institutionalization to attract interest in large recipients of funds and pensions after leading 14 investment early on, including storage startups Neighbor, Saltbox, Stuf Storage, WorkChew, Remote Work marketplace and Kitopi cloud kitchen unicorn. A friend of José E. Feliciano of Santa Monica’s private-equity company Clearlake Capital, which together with his wife Kwanza Jones has supported numerous investment firms through their SUPERCHARGED Initiative (in which Harlem Capital includes) has been recommended by Henri Henri Pierre-Jacques, cofounder of TPG Capital and KGR, who supported Harlem Capital in their work.
About 1 year ago, Demuyakor met Feliciano, one of the largest private equity companies with $38 billion in management assets, as the co-chair of Clearlake Capital, a multimillionaire. Feliciano recommended the start of Wilshire Lane institutionalization and increased operations, distribution, and marketing for Demuyakor. In Nile Capital, he and his wife Jones had also tried to systematize their support to diverse investors. The company, which was established in 2014 by former Julius Baer Investment Management Manager Mel Lindsey, invests in partnership between a number of niche investing and emerging asset managing companies.
Nile Capital Lindsey has already managed a number of deals, among them female-led quantitative investment firm Strategic Global Advisors, Native American asset managers, Denali Advisors, and Convergence investment partners, an African US company which repackages long-term hedge funds in mutual fund and ETF formats. With this support, Nile Capital has often contributed billions of dollars in assets under management to scale these companies. For Lindsey, Nile Capital was created through a long career on Wall Street in which investment management company of Julius Baer, from $800 million (assets), to a high point of $78 billion, was built most prominently. Lindsey decided to set up Nile Capital to provide various strategic capital for the GPs as well as practical assistance in the construction of infrastructures, such as operations, sales, marketing and distribution to emerging managers.
Lindsey’s Nile Capital buys at an unspecified price of approximately 25 percent of Wilshire Lane after months of negotiations, while Demuyakor’s majority owned the property. Wilshire Lane’s investment in property tech start-ups until mid-2020 was well over $10.000 million in common with major investors like FJ Labs and his former employers Andreessen Horowitz and Fifth Wall Ventures. Demuyakor wants to expand in transition to capitalize on immobilization markets.
“It’s a match in the sky,” says Demuyakor. “The next step will be crucial for Wilshire Lane and to raise more capital for the exciting space of proprietary technology. For me, it’s helpful to have people around the table who did it before when I’m building an institutional company.
Nile Capital’s Lindsey sees an enormous opportunity in Immobilio Technology to invest niches, such as remote, last-mile, self-storage and new business models for restore businesses, specially specialized by Demuyakor.
“We are undergoing a quite dramatic shift in our thinking about immobilization,” says Lindsey. “The transition from ownership of assets to data and technology is a tremendous value for the company with property technology, which is becoming a greater asset light. That’s why we believe that Wilshire Lane Capital is so exciting.”
Demuyakor, who was born in Ghana, was born about one hour north of Atlanta in Gwinnett County, Georgia. After finishing his studies at Harvard in 2011, he first worked on Wall Street after becoming an analyst at the investment bank Morgan Stanley. Then in 2015, Demuyakor enrolled at Harvard Business School after joining the private equity giant Carlyle Group as an associate. During his studies he became interested in the changes which technology was bringing to the real estate world, when the asset-light business models of Airbnb, Uber, WeWork and Doordash took flight.
In 2016, Demuyakor joined Fifth Wall Ventures, a company specializing in immobiliary technology, in order to have an insider’s perspective on the field. He set out for himself and founded Wilshire Lane after two years at the Fifth Wall. Demuyakor was an active investor and recently found himself investing in the Neighbor Self Storage Sharing App alongside his former Fifth Wall employer.
“The time and prop-tech or real estate tech is an unbelievably exciting one,” Demuyakor says. “There’s just a great deal of change in the immobilization industry with the COVID 19 pandemic. There are many debates about whether people are going to return or remain remote, and there is debate about the future retail and centers. There are many debates. In the end, technology will have a big say and how this property is used in the future.”
In a statement, add Feliciano and Jones. “We are very excited that the platform is unique in its rapidly expanding position with Nile and Wilhelm Lane Capital in support of Adam’s efforts as an integral partner for PropTech companies. .. [We] have supported the best and brightest investment managers, and have seen the impact on an investment firm’s trajectory on the right guidance and access to capital. We are committed to providing them with an important boost.”