|PE Movers & Shakers|
Mitchell Blutt's Consonance Capital doesn't exactly fit the private equity mold. Then again Blutt isn't your prototypical hard-driving buyout executive. A trained physician and sometime lyricist-songwriter, Blutt became one of Wall Street's first physician/PE investors in the late 1980s. Armed with a B.A., M.D. and M.B.A. from the University of Pennsylvania, Blutt joined what was then Chemical Venture Partners, the progenitor of J.P. Morgan Partners LLC, now CCMP Capital Advisors LLC, upon completing his medical residency at the New York Hospital-Cornell Medical Center. One day a week he saw patients and taught at the medical center; the rest of the time he was a principal investor hunting down deals.
The nexus of those two lives forged the beginnings of an 18-year career at J.P. Morgan Partners, where he eventually headed healthcare investments before retiring from the firm in 2004. After an interlude -- he finally turned to his life-long interest in poetry and ditties and devoted time to composing -- he caught a second wind, launching Consonance Capital in 2005 as a healthcare hedge fund investing in public companies.
"We were taking a private equity approach and applying it to small, entrepreneurial companies, the only difference being that they're publicly traded," says Blutt.
The firm is now a blend of public and private equity. Blutt, 54, reunited with an old colleague and friend, Ben Edmands, who joined Blutt's group in 1993. Edmands, 40, recently left CCMP to co-found Consonance Capital Partners, the firm's new private equity arm. A PE fund will launch shortly.
They aim to bring their healthcare experience to bear in a more "synergistic" way, they say, with hedge fund and private equity professionals immersed in the sector full-time sitting in one conference room trading information.
Consonance, the opposite of dissonance in music, denotes harmony and collaboration, explains Blutt, which is how he likes to engage with management teams. DJ Orthopedics LLC, which began as a small, low-tech producer of knee braces in San Diego, is perhaps illustrative of his firm's ambitions, but Blutt concedes it won't always work this way. The business grew through multiple add-ons and went public in 2001.
CCMP fully exited in 2004, but Blutt stayed on as an independent director, and in 2005 he began buying shares in the company, renamed DJO Inc.
Blutt sat on the board until DJO was sold to Blackstone Group LP-backed ReAble Therapeutics Inc. for $1.6 billion in 2007.
"Everybody made a lot of money on it," says Les Cross, DJO chairman and former CEO. "They're smart investors."
Innovative grass-roots businesses positioned for change due to healthcare reform, such as those offering lower-cost services and consumer-focused efficiencies, would be attractive targets, explains Edmands.
The duo argue that their hybrid model offers some advantages owing to their specialization. "We think our combined model is an enormous strength," says Blutt, "but within a single industry we can really be different."