‘We Must Turn Our Anger and Pain Into Action’

Minority alternatives managers are calling on the industry to fix its woeful levels of investment in Black- and Latinx-led businesses.

Michael Nagle/Bloomberg

Michael Nagle/Bloomberg

Asset managers from Black and other minority communities are urging their peers to help “level the playing field” for businesses led by people of color.

The group — referring to itself as the Diverse Alternative Investment Industry — on Friday issued a statement calling for “a system to ensure African American and Latinx businesses gain greater access to institutional capital.” More than 55 leaders and senior staffers of color at America’s largest asset managers endorsed the letter, including investment professionals at Invesco, Clearlake Capital, Vista Equity Partners, and Ariel Investments.

“This is a time of grief and anger for Americans of all races and backgrounds,” they said in the statement. “Now we must turn our anger and pain into action.”

The letter comes amid widespread protests against police brutality and systemic racism following the death of George Floyd last month. Declaring that “social justice and economic justice must go hand-in-hand,” the group called for “permanent, structural, and perennial investments into communities that have been neglected for far too long.”

“Philanthropic dollars from firms and corporations are necessary but not sufficient,” they said. “We need to build entirely new investment pathways to ensure that African American and Latinx-led companies have greater access to institutional capital.”


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Studies have long shown that minority-owned businesses face greater barriers to institutional capital. A 2015 survey by the National Minority Supplier Development Council found that 71 percent of minority-owned enterprises did not have any outside investors at all — and those that did tended to be backed by friends and family rather than venture capital or private equity firms. A more recent study, conducted last year by RateMyInvestor and Diversity VC, found that just 1 percent of venture-backed startup founders were Black. Only 1.8 percent were Latinx, while 2.4 percent were Middle Eastern.

Such issues extend to the asset management industry itself, where firms owned by women and minorities manage just 1.3 percent of all assets, according to a 2019 study by the Bella Research Group and John S. and James L. Knight Foundation.

In the “call to action” on Friday, the Diverse Alternative Investment Industry urged institutional investors to address these gaps in funding.

“This will level the playing field and create a permanent foundation to help our communities achieve the health and wealth that other communities take for granted,” they said. “As a group, and as individuals, we have long invested our time and money to help our communities. Now our work continues with even greater urgency.”