RMG Capital ('RMGC') commits to launch a $500 million fund to create union manufacturing and skilled trade jobs in the Mid-Atlantic Region (the 'Region') through investment in manufacturing companies in the areas of clean tech, renewable energy, and energy-efficient manufacturing with at least 25% of the investments going to green or clean-tech companies. As a result of these investments, RMGC projects over 5,000 jobs being created by 2017 and approximately 17,000 jobs over the life of the commitment (seven to ten years after the initial investments). In addition, RMGC has teamed up with labor unions to create union jobs in portfolio companies and also to support the 'Making it in America' job training program, providing grant assistance for existing training facilities. RMGC will reserve annual assistance to contribute to the operations of the program and integrate the market perspectives to guide training into areas with higher anticipated job availability, strengthening the manufacturing employee base in the Region, affecting the lives of hundreds of workers each year.
The RMGC team is led by the non-profit Renewable Manufacturing Gateway (RMG), which is the first non-profit merchant bank in the United States, providing capital raising, business planning, and management expertise. The deal origination will be from RMG, based at the center of the Region in Pittsburgh, PA, with a team of industry experts to support and develop emerging technologies into viable businesses that attract lenders and investors. This existing deal platform allows for faster deployment of capital into start-up and growing companies on both debt and equity sides of the capital structure.
For fund management and compliance, RMGC will include Ares Management LLC, a $59 billion investment firm with offices worldwide, for investment execution and reporting. Ares Management's experience in fund management gives RMGC a dependable private equity model to follow.
RMGC will raise its capital principally from national and state pension funds in Maryland, Michigan, New York, Ohio, Pennsylvania, and West Virginia as well as union-controlled pensions. Participating union pensions will provide capital and create both returns and jobs for their constituents. RMGC's strong commitment to utilize the Region's infrastructure, natural resources, and skilled workforce has attracted many of the Pittsburgh community foundations to support the fund's mission. Moreover, the team's inroads into the regional and national financial community will allow RMGC to thrive in its mission to create jobs in and around the Region.
June 2013: Public announcement of RMGC Fund
December 2013: Closing the fund with investments committed by union pensions, state funds, regional foundations and institutional investors
December 2014 - 2017: Companies identified for investment, due diligence performed, investments made.
While the CGI commitment timeline ends at the end of 2017, ongoing quarterly reviews of the portfolio companies will be conducted. The monitoring of job creation metrics as companies are established and/or grow over time will be done by the Fund Manager as reporting is consolidated for investors. It is anticipated that the Fund will be liquidated in seven to ten years, allowing unions and other participants to receive their principal and returns.
United States manufacturing jobs are at an all-time low in the country's history. The number of jobs in this sector has fallen 38%, from its peak of 19.5 million workers in 1979 to less than 12 million workers in 2012. Now more than ever, innovative solutions must be leveraged in order to preserve existing and grow new jobs in U.S. manufacturing.
Currently, 34% of the manufacturing jobs in the U.S. are located within 300 miles of the confluence of the Allegheny, Monongahela, and Ohio rivers in the Mid-Atlantic Region of the United States (the 'Region'). It was here that the United States industrial revolution first started, spurred by a combination of cheap and abundant resources, including water, raw materials, and energy. These factors gave rise to the American manufacturing hegemony that propelled the U.S. into a position of influence and wealth. However, since the 1980s, growing costs have pushed manufacturers to set up shop abroad in order to maintain competitive pricing in an ever-globalized market.
After the offshoring of many industries, the Mid-Atlantic Region has been left with many underutilized resources, extensive and depreciated heavy industrial infrastructure, a skilled workforce, a comparatively low cost of living, and ease of transportation within and outside of the Region. Moreover, new developments have created an attractive economic backdrop in the Region for companies using skilled labor and manufacturing, allowing the Region to again be competitive on a global scale. This includes the gas shale providing raw materials and low-cost energy, advances in manufacturing automation (integration of robotics and additive techniques), and the ability to leverage a world-class science and engineering applied knowledge base supported by local universities and government research facilities. Coordinated in the right way, these resources can be leveraged to rebuild the manufacturing heart of the United States. New jobs will be created. New industries will be formed. New fortunes will be made.
RMGC is seeking partners interested in supplying potential projects for investment, investment funds from interested impact investors, and public relations support for the Fund's mission to invest in companies interested in relocating in the Region.
RMGC is offering investment for projects that fit the mission of the fund, knowledge as to the investment climate for manufacturing in the Region, and introductions to new technologies emerging from start-ups in the Region.