New owner for bankrupt Swarthmore Group plans shift to venture capital
Gerald Jones says the Philadelphia area needs venture capital for small industrial and retail companies, and he has a plan to raise some.
Gerald Jones, a Philadelphia real estate and fuel entrepreneur and former stockbroker, says the time is right to set up a Black-run, Philly-based venture capital firm that will bet on start-ups in consumer-facing industries.
Noting the region is better known for its software and biotech investors, Jones says he’s appealing to public pension funds and a couple of university endowments. He wants them to fill gaps in the local investment scene by pumping capital into his Swarthmore Capital Fund I LP, which he hopes to close by next spring with $100 million for “seed-stage” venture capital investments.
“It’s what Southeastern Pennsylvania is missing right now: a classic asset-management business” focused on regional private manufacturing, retail, and defense-industry companies that talk directly to consumers, Jones said.
Court records show Jones last month agreed to pay $50,000 for the name, logo, trademark, and domain names of the Swarthmore Group Inc., the Philadelphia firm formerly owned and run by James Nevels.
Under Nevels and former Swarthmore Group president Glenn Becker, who also headed the state pension fund’s investment committee, Swarthmore Group invested as much as $2 billion in stocks and bonds for Pennsylvania state and county pension plans and other clients before its 2022 financial collapse and filing for federal bankruptcy liquidation.
Jones plans to use the name and initials TSG for the managing company that will set up a venture fund and invest in labor-intensive, physical asset-based “established industries — logistics, manufacturing, food systems, energy services.”
Jones said he has selected a team of professional money managers to work for the new Swarthmore and targeted several companies for initial investments of up to $5 million. He declined to identify the companies or likely investors.
“We anticipate public entities will want to play a part,” Jones said, arguing that Pennsylvania state, Philadelphia city, and other municipal pension investment funds should consider investments “to create jobs in Philadelphia instead of Austin, Boston, or Silicon Valley. Philadelphia has been missing a piece of these investments for the past 20 to 25 years.”
Jones, who ran a trading desk for then-infant BlackRock Inc. in the early 1990s, also worked at Bank One and other large banks before cofounding housing developer Broadway Properties and starting Union Core America, a fuel transport venture.
He said the Swarthmore Group, as “the historic and oldest minority-owned registered investment adviser headquartered in Pennsylvania,” still had cachet and connections.
“Mostly we are buying the goodwill of the name” to build “a venture-focused business which Southeastern Pennsylvania is missing right now,” Jones said.
