Tag: new orleans

Billionaire Gayle Benson, owner of NFL’s New Orleans Saints and NBA Pelicans, discusses her venture capital firm and its new biotech investment.

One of the wealthiest women in America, Gayle Benson is best known as the owner of the NFL’s New Orleans Saints team and the NBA’s New Orleans Pelicans. The richest person in Louisiana, she inherited the sports teams and at least ten other businesses from her late husband Tom Benson (d. 2018). These days she spends most of her time overseeing the teams, going to every Pelicans home game and flying around the country to attend every Saints game.

But Benson has bigger ambitions. “People think what I do today is glamorous, but there’s nothing glamorous about going to 42 Pelicans games and 18 Saints games,” she insists. So she is refashioning herself as a venture investor, betting on her home state and, specifically, the Gulf South, which includes the five states bordering the Gulf of Mexico (Texas, Louisiana, Mississippi, Alabama and Florida). Adds Benson, “I was always an entrepreneur and always wanted to create new things.”

Benson set up venture firm Benson Capital Partners (BCP), in New Orleans in 2019; it now has more than $125 million in committed capital from roughly two dozen unnamed high-net-worth individuals and institutional investors including $20 million of Benson’s own cash. The firm has two funds, both of which are focused on investing locally, something the New Orleans-born-and-raised Benson wanted—and had the flexibility to execute—because of her resources and connections. There is a $57 million venture capital fund, which closed in 2020, focused on tech and healthcare, and a $69 million real estate fund, which closed in January.

Benson doesn’t handle the day-to-day operations of the four-person fund (that’s up to the firm’s managing director Mike Katz, director Caroline Crumley and two other full-time investors). But she does attend its weekly investment committee meetings. It was at one of those that she pitched the idea of Benson Capital’s real estate fund. “I really enjoy real estate,” Benson says. “It’s tangible, and it’s something you can have and hold on to. It’s interesting how it’s all come full circle.”

That fund, which is almost a year old, has closed on two investments so far, but still has nearly $60 million to put to work.

BCP’s first investment, in 2021, was in New Orleans biotech startup AxoSim, which creates lab-grown human cells that mimic human organs with the goal of making drug development, particularly for neurodegenerative diseases, faster and cheaper. On Tuesday, AxoSim, which is in the process of raising its third round of funding, announced that it will acquire the human-organoid-related assets of Vyant Bio, a public biotech company that recently delisted from the Nasdaq, for $2.25 million.

“Frankly, New Orleans isn’t maybe known for being a biotech hotbed,” says AxoSim CEO Lowry Curley, adding that accordingly, early-stage funding is relatively difficult to raise in the region. “The support of someone like [Benson] and her team that’s so business-minded and successful … has let us hit some really big milestones, not the least of which is this acquisition.”

AxoSim is representative of the types of investments BCP’s first fund seeks out. That fund has 13 portfolio companies and has room for eight to ten more investments, according to Katz, BCP’s managing director, meaning they generally invest $1 million to $3 million per deal for a median 20% stake.

Benson, 76, inherited her now $5.3 billion fortune five years ago, but she officially started her own business at age 34 in 1981. A couple of years prior, Benson says she left her secretary job and borrowed $10,000 (interest-free) from a friend in the medical field to start an interior design firm, Gayle Bird Interiors. “I just said, ‘Oh, I’m just going to do this on my own,’ and so that’s what I did,” Benson says. She eventually started buying and reselling some of the residential properties she designed—then moved into commercial property, landing several notable clients including Hyatt Hotels, the Ritz-Carlton and the Omni Hotel. In 2000, she helped renovate the public spaces at the Mercedes-Benz Superdome. “It was a lot of fun, but it wasn’t always glamorous like people think,” adds Benson.

Throughout its quarter decade of operation, though, the interior design business had both years of positive cash flow and years of significant debt; Benson faced more than a dozen lawsuits related to her company, mostly alleging that she didn’t pay small bills on time or otherwise breached contracts. It’s not clear what happened in most of those cases from many years ago but in one case, at least, her firm was ordered to pay back $1690. Nevertheless, Gayle Bird Interiors cemented her identity as an entrepreneur and her place as a well-connected New Orleans resident.

In 2004, she married Tom Benson, whom she met at mass at the St. Louis Cathedral (which she is currently leading a multimillion-dollar effort to repair). Roughly a year later, she dissolved Gayle Bird Interiors and got herself involved in her third husband’s network of a dozen businesses, from the New Orleans Saints to auto dealerships to a wine company. She founded thoroughbred horse racing company GMB Racing in 2014.

Tom Benson’s apparent heirs at the time weren’t happy with Gayle’s growing role. Benson, who had been widowed twice before marrying Gayle, announced he did not want his daughter and grandchildren to be heirs of the Saints, Pelicans and other major businesses in 2015; they sued, alleging he was mentally unfit to manage his life and companies; the messy dispute ended in a confidential settlement that left Gayle Benson as sole heir of Tom Benson’s main businesses when he died in 2018. (The deadline to challenge the will passed seven months ago).

Her goal now, she says, is to “continue his legacy of business and economic development in the region.” While the sports teams are struggling with middling records, it’s a bit early to tell if her venture firm’s strategy is paying off yet: BCP’s fund is “slightly up” for now, according to Katz, who says they’re targeting a 30% internal rate of return for that fund.

Still, one advantage her firm has: being one of fewer fish in the pond. “Strategically, this part of the country, with some rare exceptions, lacks institutional capital at scale, and as a result, there really aren’t other firms that we’re bumping into” when competing for deals, says Katz.

It’s not clear, though, how long it will stay centered so closely on the Gulf South. With AxoSim’s acquisition, BCP will have its first investment in the Midwest—related assets of Vyant Bio subsidiary StemoniX include a facility outside of Minneapolis—but AxoSim “will always have a presence in New Orleans,” Curley said.

Like AxoSim, BCP is also hoping to expand outward. About 60% of the first fund’s capital and 50% of the second fund’s capital comes from investors with ties to New Orleans, and Katz says he only expects that to decrease with future funds, although it will remain rooted in New Orleans. For now, the firm has investments mostly in Louisiana as well as Alabama, Texas and Florida, but hopes to expand to Georgia, Mississippi, Arkansas and South Carolina soon.

Meanwhile, Benson circles back to the connection between the worlds of the NFL, the NBA and venture capital: “Whether we are talking about the business of sports or the business of high tech investments, success comes down to the people,” she says. “And we’re deeply committed to identifying, empowering and retaining the best talent that we can.”

“I stepped into some pretty big shoes. I felt like in the beginning I was floating around it,” Benson says. “But I’m just starting to get my footing.”