Less than 2% of AUM (Assets Under Management) are handled by diverse-owned firms. According to a 2019 study, 2.68% of single-manager active equity funds were managed by Black managers. A 2023 AFAJOF report found that 9.65% of U.S. hedge fund managers are Black. What’s more, there are just 33 Black-owned investment management firms with more than $1 billion in assets under management responsible for an aggregate total of $272.2 billion.
Bahiyah Yasmeen Robinson was all too familiar with these sobering numbers when, in 2018, she decided to launch VC Include (VCI), an organization aimed at accelerating investment into historically underrepresented emerging managers. This means providing fund managers with the tools they need to access capital to scale up their investment portfolios, something the industry isn’t known to do.
Robinson, a respected leader in philanthropy and impact investing, spent decades navigating and excelling in spaces where Black women were the literal and figurative minority. She was one of the few Black women who launched her own fund of funds, and also a seeding platform, The INCLUDE, which is designed to build infrastructure to drive sustainability and integrity around environmental and social governance, with equity and inclusion embedded in the model.
So, essentially, she knows what she’s doing and was also aware of what others in the industry needed to get ahead. With that in mind, two years later she spearheaded VC Include’s Fellowship, a weeks-long program aimed at nurturing the next generation of institutional grade asset managers in venture capital, private equity and impact investing.
“There were a few things that were happening in 2020—the social justice reckoning stemming from the George Floyd event and the pause in the market because of the pandemic,” Robinson tells ESSENCE. “I’d already built a platform of about 200 impact fund managers. But there was a new moment that emerged from the George Floyd incident and pandemic in 2020, and that was a lot of new fund managers, particularly fund managers that were Black and Brown coming to market. I saw the number from 200, which is now above 650, really skyrocket after 2020. And so the nonprofit was really a response both to the moment, to the market, but also when we think about enabling environments and fostering what we call catalytic capital, we needed to provide a safe landing for new managers to really get the apprenticeship style support that they didn’t have access to, quite frankly. There wasn’t a lot of private equity or venture capital fund managers that looked like us at the time.”
Since its launch, VC Include’s apprenticeship program has impacted the lives of dozens of fund managers, leading them to raise millions for their respective funds. VCI’s executive director, Milton Speid says the program is helping to expel the notion that there weren’t many managers of color out there.
“I was at a networking event that was packed with these brilliant and talented fund managers, and the light bulb went off for me,” he tells ESSENCE. “It’s not that there’s a lack of talent, it’s just a lack of awareness and access. I’ve been part of that community ever since. In 2020, when VC Include launched, there were similar social and political, I guess, unrest. There was still a heightened awareness of the inequities that we’re seeing right now in the venture space. But fast forward four years, we’re still seeing many of the same issues and same challenges. While the the examples have changed, the challenges still remain the same. I think one of the things that gives me a lot of hope and inspiration is the work that the managers do themselves. They are the ones that are persevering through these really tough political times, the really tough social times, and giving us inspiration to keep moving forward.”
Phil Reeves, a VCI Fellowship alum says his participation in the program directly impacted his raising nearly $60M at Apis and Heritage Capital Partners, his social impact private equity firm that empowers workers of color to own their futures through employee-led buyouts.
“When you’re out trying to raise a fund, build a firm, taking out time every single week for months, is a challenge,” Reeves tells ESSENCE. “But I think it’s more than worth it. It’s one of those things where this business is an apprenticeship business. It takes a lot of training. I think that’s what people don’t pay enough attention to. There’s a lot of focus on the investment side of the business, making investments and doing good deals but what is very under-discussed is what it takes to build a firm. I think people don’t realize is that, yeah, you’re managing money for institutional LPs, but you’re also building your own business. I think what VCI does a great job of is that part. That part is only taught or learned by being in the GP seat, if you will, and very few people of color get in those seats.”
Moving forward, VCI says they are looking ahead to the future and investing in the empowerment of underrepresented groups, even in the midst of sweeping DEI divestment.
“I think that, look, DEI backlash is real,” Robinson shares candidly. “We all know it. But with the background in the impact investing space that I had, the benefit was understanding that DEI, unfortunately, would probably be a moment. I hoped it wouldn’t, but here we are. A lot of our focuses have always been inclusion, and it’s even embedded in the name VC Include. We’re not excluding anyone. In fact, many of the teams have a multitude of different racial backgrounds. But what we wanted to focus on was making making sure that we tie the fact that including more managers that didn’t reflect the 98% of managers in the market were both given the opportunity to compete and also historically would be shown to find better deals over time. From a market perspective, we wanted to make sure that we didn’t get too bogged down with the DEI title. That being said, it is what it is. The anti-DEI campaign has been strong in the last couple of years. We have definitely responded to several questions about why we’re focusing on a particular demographic or why we over index on Black funds, and VC Include.”
She adds: “And the answer is simple. We are looking for the best talent that might not be given a chance in another environment. We want to make sure that they have all of the support and mentorship that they need to compete on an even playing field. And so we flip it on its head that it’s not about DEI because we’re already diverse. We’re already including ourselves. We’re already being equitable, but we’re including ourselves and, most importantly, prioritizing ourselves in the venture capital and private equity space. That has and always will be the goal.”