New center to use foreign dollars to create jobs in Pittsburgh region
Ferrum Capital Partners LLC has launched a new venture that aims put more foreign investment dollars to work in the southwestern Pennsylvania by financing construction projects, retail establishments and restaurants, hospitals, medical practices, condos, factories and research centers — and creating jobs.
Ferrum, a specialty asset and management services firm, received approval from the U.S. Citizens and Immigration Services department to open the West Penn Regional Center, a downtown Pittsburgh-based Immigrant Investor Visa Program EB-5 regional center. West Penn is open for business, Ferrum Managing Director Howard Russell Jr. said.
The EB-5 visa provides a method of obtaining a green card for foreign nationals who invest $1 million — or $500,000 in certain regions with high unemployment — creating at least 10 full-time jobs for U.S. workers for a minimum of two years. The investments can be made into a regional center, which is a third-party managed investment vehicle, public or private.
Ferrum, as the center's manager and owner, acts as a private equity firm, Russell explained. It is responsible for all aspects of operations, including investment sourcing and evaluation, worldwide marketing to prospective investors, facilitating investor immigration filings and monitoring investments for compliance under the EB-5 program. It also provides access to subordinated debt and equity to its clients for qualifying projects.
"We pool their money and reinvest or re-lend it," said Russell, who is also managing partner of buyout firm Opus Acquisitions Group. "We become the fund manager on their behalf."
The center has been in the works for more than two years, Russell said. A single project could generate hundreds of jobs, and could also have multiple foreign investors. But each has to produce results or the plug is pulled. If the foreign national investor's petition is approved, the investor and their dependents will be granted conditional permanent residence valid for two years. But within the 90-day period before this conditional permanent residence expires, the investor must submit evidence documenting that the full required investment has been made and that at least 10 jobs have been maintained, have been created or will be created within a reasonable time period.
In addition to Russell, the partners, all local, are:
- James Baldwin, of counsel at Spilman Thomas & Battle PLLC
- Peter Dochinez, president of Greensburg-based Trustmont Advisory Group
- Wilson Farmerie, an engineer
- Jean-Luc Park. a former venture capitalist and consultant
- Eric Bowman, an immigration lawyer.
Each brings different skill sets to the table. Ferrum aims to leverage its partners' capabilities and relationships with strategic partners and financial institutions to effectively match international investors with vetted projects.
"There are two ways of utilizing capital through a regional center," Dochinez said. "One is providing funding only for projects that will meet the USCIS standards for EB-5. The second, and where we are more interested, is taking an equity position in projects that will use EB-5 funding for a part of the cash that's being raised and we'll take an active role in the project either through management or other roles that might be needed."
Ferrum is able to partner with some high-net-worth individuals in the Pittsburgh region as potential investors. They were not identified.
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