Our approach was to invest in the junior tranche of the fund as well as provide a grant to Winrock International to get businesses ready for capital.ģ.
South to address systemic barriers to accessing capital by diverse entrepreneurs exacerbated by the COVID 19 pandemic. On the debt side, where investors have less “ownership and influence” we have increased ours by coming in junior tranches or pairing our investments with grant capital for technical assistance or market-building opportunities (e.g., accelerator programs focused on supporting women entrepreneurs, etc.).įor example, last year we invested in the Southern Opportunity and Resilience Fund, which focuses on providing debt capital to women- and minority-led micro and small businesses in the U.S. Setting targets for risks and returns to make our capital more catalytic The Beacon Fund is a great example of the types of investments we have made and the way the fund manager has incorporated a gender lens across all its activities. In addition, this capital tends to be at the early stage of a fund’s and a company’s journey therefore, you are working to build an equitable and diverse foundation from the start.Īcross all our VC investments we have incorporated a gender lens at three distinct levels: 1) Governance and Leadership 2) Investment Strategy and Portfolio Management and 3) Client / Beneficiaries. For example, in the private equity and venture capital space, limited partners like ourselves but also fund managers themselves have significant ownership and high level of influence, which make these conversations strategic.
We have found that it is important to tailor our diversity lens and expectations depending on asset class. Further, we work with our investees to incorporate a gender lens across many facets of the firm’s governance, leadership, workforce development as well as their investment strategy, investment products, and clients, working with the fund manager hand in glove as these issues are nuanced and contextual depending on the sector, geography, and asset class we are investing in.Ģ. Our minimum requirement for our private market investments is 2X Criteria alignment. Maximizing the impact of catalytic capital when supporting emerging fund managers If we want a more inclusive and diverse capital market ecosystem, we need all hands on deck. This approach has allowed us to take a “screening in” versus a “screening out” approach with the goal to support both those that are best in class from a gender equity and diversity lens perspective and those that have a genuine interest and commitment to becoming better. We have prioritized diversity by taking a dual approach, by 1) investing in women-led fund managers that invest in gender-diverse and inclusive small businesses (more than 50% of our investments to date), and 2) investing in fund managers who are committed to further improving their diversity within their firm and their operations. In addition, we have incorporated a gender equity lens across all our investment activity.ġ. One of our investment priorities is to invest in emerging and diverse fund managers, first closes, and junior tranches with the goal to reduce the perceived risk of these transactions and crowd in additional capital at scale. More importantly, we need to take it a step further and take concrete action to diversify investment firms at large because it is good for society and good for business.
Assessing impact and risk when deploying catalytic capitalĬombatting systemic bias calls for systemic solutions: To channel more capital to diverse entrepreneurs we need to channel more capital to diverse fund managers.
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