SENNA

Private Capital Managers Embrace Diversity in Fund Launches

PARIS - The private capital industry is embracing diversity like never before, as fund managers from around the world come together to back a new wave of investment vehicles.

According to data presented at the IPEM conference in Paris, the number of private equity, venture capital and private debt funds with diverse or underrepresented managers has surged in recent years. Leading global asset managers are increasingly partnering with emerging and minority-led firms to bring novel strategies to market.

"There is a real appetite from institutional investors to diversify their portfolios and work with a broader range of fund managers," said Marcia Gonzalez, managing partner at Ascent Capital, a fund-of-funds provider. "Diversity is no longer a 'nice-to-have' - it's a strategic priority."

Industry data shows that funds with diverse or first-time managers raised over $60 billion globally in 2022, up from just $18 billion five years ago. While still a fraction of the overall private capital market, these vehicles are gaining traction, particularly in sectors like technology, healthcare and renewable energy.

"Investors recognize that diverse teams can bring unique perspectives and insights that translate into differentiated returns," said Raj Kundra, chief investment officer at Astra Limited, a large public pension fund. "We're seeing strong performance from many of these emerging managers."

To be sure, barriers to entry remain high, and diverse managers continue to face systemic challenges in accessing capital and deal flow. But the industry appears to be making progress, with leading firms like Blackstone, KKR and Carlyle all launching dedicated programs to back diverse-led funds.

"It's an exciting time - we're seeing fund managers from all backgrounds come together to build the next generation of private capital," said Gonzalez. "Diversity is not just good for investors, it's good for the industry as a whole."