Steve and Connie Ballmer have announced a $400 million investment with four organizations focused on Black investment managers and Black businesses. This commitment targets an undercapitalized market.
Steve and Connie are pursuing a fund of funds strategy with two partners that have demonstrated a strong historical track record in the space: Fairview Capital and Goldman Sachs. These partners were selected based on their demonstrated ability to execute the fund of funds strategy at scale, drive at or above market rate investment returns, and partner effectively with emerging fund managers. The investments will go exclusively to Black-led venture capital and private equity funds, and at least 30% of the underlying portfolio companies will be led by Black entrepreneurs/founders. The partnerships include a commitment from Goldman Sachs and Fairview Capital to amplify the impact of the funds with additional capital.
Steve and Connie will also work with J.P. Morgan & GCM Grosvenor, as well as Ariel Alternatives’ Project Black. Project Black is a private equity initiative with a mission to scale sustainable Black, Latina and Latino-owned businesses to serve as Tier 1 suppliers to Fortune 500 companies.
This commitment is unlike any other that Steve and Connie have made through either their philanthropy or personal investment portfolio. From Steve: “This is an incredible opportunity to invest in an undercapitalized market,” noting that Black investment managers and Black entrepreneurs are underfunded relative to their White peers. “We hope it will signal to other investors the value in giving Black investment managers access to capital. There are great people out there, and we are excited to catalyze this segment and look forward to excellent returns.”
The approach aligns with Ballmer Group’s philanthropic focus on improving economic mobility in America, but these investments are not philanthropic. They use market-based methods to drive economic mobility. “We know that systemic racial inequities impede access, opportunity, and outcomes in economic mobility – especially for Black families and communities,” shares Connie.
The investment thesis is built in part on the understanding that the vast majority of investment decisions are now made by White investment managers, leaving gaps in the market. Steve and Connie believe these gaps present a significant opportunity for private investors and wealth managers. Steve notes, “We haven’t traditionally focused on investments and private equity, but we are just incredibly excited to take this approach.”