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The Power of Content Marketing for Investment Firms

Content Marketing for Investment Firms

For investment firms like venture capital, private equity, and asset managers, content marketing is an essential aspect of modern marketing.

In order to attract and establish trust with potential startups, portfolio companies, and institutional investors, content marketing is crucial. These entities are essential to the success of investment firms as they help firms grow and manage their investments successfully.

Increasing deal flow

One of the primary benefits of content marketing for investment firms is attracting potential startups. By producing and sharing high-quality content that is relevant and valuable to startups, investment firms can position themselves as thought leaders in their respective fields.

This helps establish their brand and generate interest among startups who are looking for investment opportunities. Investment firms can use a variety of content formats, including blogs, videos, webinars, and infographics to showcase their expertise and provide startups with valuable insights and advice.

Supporting portfolio companies

Another benefit of content marketing for investment firms is building trust with portfolio companies. As investment firms work closely with portfolio companies, it’s crucial to maintain open and transparent communication to build strong relationships. Content marketing can help facilitate this communication by providing regular updates and insights into the investment firm’s strategies, goals, and progress. By sharing information that is relevant and valuable to portfolio companies, investment firms can build trust and establish themselves as reliable partners.

Attracting Institutional investors

Institutional investors are another critical target audience for investment firms, and content marketing can play a key role in attracting their interest. Institutional investors are looking for reliable and trustworthy investment opportunities, and content marketing can help investment firms demonstrate their expertise and establish themselves as credible partners. Investment firms can use content to showcase their investment strategies, performance records, and thought leadership in the industry. This helps build confidence and trust among institutional investors and encourages them to consider investing in the firm’s investment fund.

Strengthening online presence

In addition to attracting potential startups, portfolio companies, and institutional investors, content marketing also helps investment firms create a strong online presence. With the rise of digital marketing, investment firms need to have a strong online presence to reach their target audience and stand out from the competition. Content marketing provides investment firms with a platform to showcase their brand, expertise, and thought leadership, which helps establish their online presence and reach a wider audience.

Establishing thought leadership

Finally, content marketing is an effective way for investment firms to educate their target audience and demonstrate their expertise. By producing and sharing educational content, investment firms can help potential startups, portfolio companies, and institutional investors understand the complexities of the investment industry and make informed decisions. This helps investment firms establish themselves as trusted advisors and positions them as valuable resources for their target audience.

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Project Black: Ariel Investments Closes $1.45 Billion Fund For Minority-Owned Companies

project black

Ariel Investments, one of the largest Black-owned asset management companies in the U.S., recently announced the closing of Project Black, LP, its first private equity initiative.

The fund seeks to invest in middle-market companies with revenue between $100 million and $1 billion, with a focus on transforming these companies into certified minority business enterprises of scale.

Project Black will leverage $1.45 billion in commitments from its limited partners and co-investors, who come from various sectors including consumer retail, energy and infrastructure, financial services, healthcare, sovereign and private wealth, and technology. In addition, JPMorgan Chase & Co. intends to co-invest up to $200 million alongside the Fund in future deals.

The Fund’s investment strategy is to pursue 6-10 middle-market platform companies, focusing predominantly on high-margin sectors that fulfill corporate procurement needs, including healthcare, industrial, media and marketing, outsourcing, manufacturing and packaging, technology, transportation and logistics, and financial and professional services.

“We chose to partner with large institutions that are seeking to drive widespread corporate vendor diversity,” said Leslie A. Brun, co-founder, chairman and CEO of Ariel Alternatives, in a news release.

Ariel Alternatives was also co-founded by Mellody Hobson, who is also chairman and co-CEO and president of Ariel Investments.

“Our goal is to help close the racial wealth gap by creating minority-owned businesses of scale through access to both capital and customers,” Mr. Brun said.

Post-acquisition, the Fund’s investment team is expected to partner with its companies to pursue both organic and non-organic growth strategies, with the aim of creating a new class of Black and brown entrepreneurs. The Fund also employs a formal environmental, social and governance (ESG) and social impact policy to ensure its portfolio companies have the potential to create career paths and economic growth for underrepresented minorities.

One example of the Fund’s successful investment portfolio is the acquisition of Sorenson, a leading U.S. communications provider for people who are Deaf and hard of hearing, at an enterprise value of $1.3 billion in April 2022. Prior to acquisition, just 3% of Sorenson’s senior leadership team and board of directors were comprised of minorities.

However, with Ariel’s control and active efforts to augment the organization with best-in-class leaders, minority representation has significantly increased to 43% of the senior leadership team and board.

The Fund’s goal is to help close the racial wealth gap by creating minority-owned businesses of scale through access to both capital and customers. Ariel Alternatives aims to forge partnerships between its network of the world’s largest corporations and its portfolio companies and to scale sustainable minority-owned businesses to serve as leading vendors to Fortune 500 companies.

Over the next decade, Project Black seeks to create 100,000 new jobs in underrepresented minority communities across up to 10 portfolio companies and to generate jobs and economic growth within these communities.

The McKinsey Institute for Black Economic Mobility’s research and insights helped inform the Project Black strategy, which is also supported by a number of legal advisors including Kirkland & Ellis LLP and Willkie Farr & Gallagher LLP, and Greenberg Traurig, LLP.

Ariel Investments, LLC, the parent company of Ariel Alternatives, is a global value-based asset management firm founded four decades ago in 1983. With assets under management totaling approximately $16.2 billion as of December 31, 2022, Ariel serves individual and institutional investors through five distinct strategies, including Ariel Focus Fund, Ariel Discovery Fund, Ariel Fund, Ariel Appreciation Fund, and Ariel International Fund.

by Tony O. Lawson

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13 mins read

East Chop Capital: Building Wealth and Community Through Luxury Vacation Rentals

east chop capital

The global vacation rental industry is expected to surge by 17% by 2030, reaching a value of over $112 billion. The demand for luxury rentals, which offer privacy, uniqueness, and luxury design, is especially on the rise among travelers.

East Chop Capital is a private equity firm that invests at the intersection of real estate, travel recovery, and the new norm of hybrid and remote work.

We caught up with founders Calvin L. Butts, Jr. and Carrington M. Carter, to gain insights into their company and its goals.

Tell us about the founding of East Chop Capital and what inspired you to start the company. 

[Carrington]: Calvin and I started investing in vacation rental homes back in 2014, when we built our first home in the Pocono Mountains of Pennsylvania, a 6-bedroom, 3-bathroom, 2800 sq ft mountain chalet, and launched the Getaway Society brand.

The idea for entering this industry came after I went on several ski trips with friends from college (shout out to Hampton University). Our group of 15+ would stay in large vacation rental homes. After the third trip, I ran the numbers and concluded that the industry had lots of potential, especially with the growth of platforms like Vrbo and Airbnb. 

We quickly expanded to Martha’s Vineyard and then to Hilton Head in order to grow our portfolio, buying about $3.5 million worth of real estate in five years. For Martha’s Vineyard, we both knew about the history as an enclave for African Americans, but after Calvin experienced the magic of the Vineyard firsthand following a Sigma Pi Phi Grand Boule’ conference in Boston, we quickly bought some property. 

As people learned of our success and inquired about how to invest alongside us, we decided to create a separate private equity firm, East Chop Capital, and launched a real estate fund focused exclusively on luxury vacation rental homes. Through this process, we discovered just how much a vehicle like East Chop Capital is needed in our community. 

For our first fund, we raised $4 million from 90 investors, 89% of whom are Black, 11% White, and 18% Women. We are on track to deliver 27% returns, net of fees, which is an outstanding performance for any fund manager, especially for a first fund. 

Our firm is named after the East Chop area in the town of Oak Bluffs on the island of Martha’s Vineyard, where we own two homes. 

Your firm has been able to raise more than double the amount of capital in less time for its second real estate fund compared to its first. What do you attribute this to? 

[Calvin]: We’ve been owners, investors, and operators in this space for almost a decade. Our track record is likely the biggest reason we’ve had faster success raising capital for our second fund compared to our first. For Fund I, it took us three years to raise $4 million.

For Fund II, we raised $9 million in about six months. We’ve sold four properties from our first fund, some at triple digit ROIs, returned over $3 million back to investors, and we’ve done so in this current economic environment. We are pleased with our results, and certainly, our investors are as well. 

In addition to our track record, we’ve spent considerable time building relationships and trust over the past nearly five years since we started East Chop Capital. We are hardworking, genuine, honest, and really dedicated to bringing people along on the journey to learn, network together, and of course, build wealth. The relationships and trust that we’ve built, coupled with our communication, transparency, and “building in public” across social media, gives people the comfort and confidence to recommend us to others. 

Unfortunately, we haven’t received an investment from institutions or family offices, which is critical in order to scale a business. We know the statistics around the lack of access to capital for minority-owned businesses and are aware of competitors who have received $100+ million in support, despite having less experience. We hope that our track record and continuing to tell our story will lead to larger investments in our firm. 

Can you discuss your focus on the intersection of real estate, the rebound in travel, and the future of hybrid work? 

[Carrington]: The thesis of our second vacation rental home fund has four key components:

  1. Real estate as a cash-generating hard asset: Real estate has a well-documented history of generating income and appreciating over time, especially luxury real estate in key locations. 
  2. The rebound in travel post-COVID: COVID is certainly not over, but we are adjusting to living with it as best we can, including traveling. There is still significant pent-up demand to travel and connect with family and friends–birthdays, weddings, new babies, promotions… lots of reasons that people want to celebrate and celebrate together. We feel that experiences will remain a priority over material things.
  3. The demand for drivable, leisure destinations: Our strategy includes building a geographically diverse portfolio of luxury vacation rental homes, within a six-hour drive of major metroplexes across the country. Drivable, leisure destinations will continue to be a viable option for families and large groups who want to enjoy a vacation and save money by driving instead of flying.
  4. The future of work in which hybrid is the new normal: You see headlines everyday about companies trying to force workers back into the office. While company policies will vary, for office workers, it appears that the new normal will be 2-4 days in the office, often with an additional week(s) of remote work offered. We are in the early innings of employees discovering, and more importantly acting on, this flexibility to live, work, and travel in ways never before possible. Vacation rentals will play an increasing role in this new life of flexibility as weekend trips turn into a full week, or a one-week vacation may turn into multiple weeks.

What is your strategy for identifying and acquiring luxury vacation rental properties in desirable locations across the US and internationally? 

[Carrington]: It’s part art, part science. First, it starts with us. Places that we have visited and enjoyed, or places that we have heard about as enjoyable vacation destinations. Aside from personal insights, often this intel comes from family, friends, investors, and others in our network. Put another way, we listen to customers of luxury vacation rental homes.

Next, we analyze travel reports and other “top destination” lists from companies like Vrbo, Airbnb, Vacasa, Evolve, AirDNA, and media outlets like Travel + Leisure, Conde’ Nast, National Geographic, Travel Noire, CNN Travel, TripAdvisor, Lonely Planet, Skift, and others. 

We also track growing metroplexes and look for the surrounding areas that people will escape to for weekend getaways and extended trips. When given the choice, travelers tend to have a strong affinity for beach, lake, mountain, and entertainment destinations. 

east chop capital
Getaway Yacht Charter’s 54-foot Azimut Flybridge named Struqqle –  Photo: Above Visuals.

What are your future plans for growth and expansion in the vacation rental market and in the private equity industry overall? 

[Calvin]: With our Getaway Society brand, powered by East Chop Capital, our goal is to own a boutique portfolio of 100-150 luxury vacation rental homes around the world. Buying, building, renting, and opportunistically selling over time to generate returns and build wealth while delighting guests around the world. 

Right now we have homes in Martha’s Vineyard, Hilton Head, Orlando, Gatlinburg, the Pocono Mountains, Virginia Beach, and Broken Bow (Oklahoma). We are building two large homes in Orlando: a 12-bedroom, 13,000 sq ft home and a 10-bedroom, 6,000 sq ft home, which we’re calling self-contained resorts.

east chop capital
3D rendering of 12-bedroom, 13,500 sq ft property in Orlando. FL – Photo credit: MJS Designers Group.

They’re being built with amenities such as a resort-style pool, bowling alley, indoor basketball court, movie theater, game room/arcade, and fitness center.

east chop capital
3D rendering of 12-bedroom, 13,500 sq ft property in Orlando. FL – Photo credit: MJS Designers Group.

We are also building four beach houses along the Texas Gulf Coast in Port Aransas, and two luxury mountain homes in Banner Elk, North Carolina, located two hours outside of Charlotte, and near Beech Mountain, Sugar Mountain, and Grandfather Mountain. 

Carrington and I also have a fascination with yachts, and we hope to build this fascination into a parallel business that gives guests a new experience on the water in places where we have homes. I grew up in Savannah around water. We went to Hampton University, which is three-quarters surrounded by water, and loved watching yachts in the harbor. Getaway Yacht Charters had a soft launch last year, with the acquisition of a 54-foot Azimut Flybridge. This business is still in its infancy, but we are excited about its future. 

On the private equity front, earlier Carrington mentioned how much a vehicle like East Chop Capital is needed in our community. It was an “Aha moment” for us. Real estate will continue to be our foundation, but under the overall objective of building wealth, we have discovered a unique way to mobilize our community of 150+ LPs [limited partners/investors] to make sizable investments ($100,000 to $1+ million) in other deals.

We are equally excited about this vertical within East Chop Capital, as it perfectly aligns with our commitment to provide the best combined financial, educational, and social returns through curated and vetted investments across various industries. 

We’d love to have your support as we continue to scale and welcome the opportunity to host you for a vacation! Please follow us @GetawaySociety and @EastChopCapital on Instagram, Facebook, and LinkedIn, and join our email lists to stay connected about our growing portfolio of luxury vacation rental homes, and other East Chop Capital investments.

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Alternative Investments 101: An Overview of Real Estate, Private Equity, and More

Alternative Investments

Alternative investments are a popular way for investors to diversify their portfolios and potentially earn higher returns. These types of investments are not the typical stocks, bonds, and cash, but rather a range of other assets that offer the potential for higher returns and lower volatility.

Real Estate

Real estate is one of the most popular alternative investments and can take many forms, including residential properties, commercial properties, and real estate investment trusts (REITs). Investing in real estate allows investors to earn income through rent and capital appreciation. Furthermore, real estate can provide diversification benefits as it doesn’t always move in sync with the stock market.

Private Equity

Private equity funds invest in private companies, typically with the goal of taking the company public or selling it to another company. These investments can provide significant returns, but they also come with a higher level of risk. Private equity is only available to accredited investors and institutional investors.

Hedge Funds

Hedge funds use a variety of investment strategies to generate returns that are not closely correlated with the overall stock market. These strategies can include short selling, leverage, and derivatives. Hedge funds are only available to accredited investors and institutional investors, and they typically have higher investment minimums and management fees than traditional mutual funds.

Commodities

Commodities are raw materials that are used in the production of goods and services. Investing in commodities can provide diversification benefits and the potential for higher returns. Commodities can be traded through futures contracts, commodity ETFs, and commodity-focused mutual funds.

Art, Collectibles

Investing in rare and valuable art, antiques, and other collectible items can be a great way to diversify a portfolio. The value of these items can appreciate over time and they can also provide enjoyment while they’re held. Investing in art, and collectibles can be difficult, as it requires knowledge and expertise to accurately value the items.

Venture Capital

Venture capital funds invest in start-ups or early-stage companies with high growth potential. These investments can provide significant returns, but they also come with a higher level of risk. Venture capital funds are typically only available to accredited investors and institutional investors.

Infrastructure

Investing in infrastructure projects such as roads, bridges, airports, and other public assets can provide a steady stream of income through tolls, fees, and rentals. Infrastructure investments also provide long-term growth potential as the economy grows and the infrastructure assets become more valuable.

Private Debt

Investing in loans made to companies or individuals, such as real estate loans or small business loans, can provide a steady stream of income through interest payments. Private debt investments can also provide diversification benefits as the returns are not closely tied to the stock market.

Alternative investments can provide diversification and the potential for higher returns. However, it’s important to note that they also come with a higher level of risk, and they may only be available to accredited investors and institutional investors. It’s also crucial to do your research and understand the investment before putting your money into it.

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5 mins read

Attorney Talk: Deal-Making in Private Equity

kimberly mann

Kimberly Mann is a corporate and securities attorney with a principal focus on private equity. She has an in-depth understanding of the legal, regulatory, and business opportunities and challenges that fund managers encounter.

In this interview, she shares her journey, approach to successful deal-making, interesting trends in her practice areas, and valuable advice for associates and law students looking to follow in her footsteps.

What inspired your decision to practice law?

I have always enjoyed the challenge of advocating for others, even as far back as grade school. I love investigating, negotiating and problem solving.

After working as an accountant for several years and saving money, I decided to enroll in law school in the evening program. I loved the work I did in law school and as a summer associate. My love of the work, the great experiences I had as a summer associate, and the encouragement from others led me to decide to practice law.

What is your approach to successful deal-making?

I approach each transaction by first understanding what the business deal is, what my client’s goals and objectives are, and what “success” is for my client. A deal is successful only if the client thinks it is a success.

Once we establish the ground rules and come to an understanding regarding fees, my goal is to create solutions that are practical and pragmatic from both a legal and business perspective.

What interesting trends you’re seeing in your practice areas?

One of the interesting and exciting developments in private equity and venture capital is that there are increasing opportunities for African Americans in the industry.

Founders and emerging managers of color are beginning to receive more funding from investors and the number of investors of color is increasing.

We are beginning to see an increasing number of fund managers (sometimes referred to as “GPs”) of color. Those managers are getting opportunities to demonstrate their capabilities to institutional investors. It is a beautiful thing.

What do you enjoy most about what you do?

I enjoy working closely with fund managers to navigate through the legal, regulatory, and business opportunities and challenges they encounter throughout their life cycle. 

Whether it is at the formation phase, a challenge with a key person, or the excitement of an exit, I love helping them achieve great outcomes.

Also, a significant part of my practice involves representing investors, such as funds of funds and other investors in private funds. I enjoy counseling them on issues relating to their investments and helping them understand and negotiate investment terms.

What advice do you have for associates and law students who want to follow in your footsteps?

  • How much time do we have? I can think of a thousand things. Here are ten things that come to mind immediately:
  • Treat everyone as a prospective client because they are.
  • Stay in touch with friends and former classmates.
  • Keep your head about you when all around you are losing theirs.
  • Hard work pays off. Play the long game. There are no shortcuts.
  • Never lose sight of who you are and the values you represent. Maintain perspective.
  • The practice of law is a profession and a business. Client service is job one, but never forget about the economics.
  • Find mentors and sponsors you respect and trust, but remember that these relationships work both ways.
  • Seek excellence in all you do.
  • Be versatile. Learn new things. Be prepared for new opportunities.
  • Chart your own path, and don’t be afraid to take an alternate route.

On the subject of alternate routes, when I graduated from law school and began working in a law firm I decided that I would re-evaluate my career every year to make sure I was on the path that was right for me. That process has served me well and I recommend it to associates who ask me for advice.

Changing course can lead to great opportunities. By changing course two years ago and moving from a very large law firm (where I had worked for more than 25 years) to Shulman Rogers, new opportunities opened for my practice and for me personally. I think introspection is a key component of a long and satisfying career. 

by Tony O. Lawson

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4 mins read

Why The Car Wash Industry Is Becoming Increasingly Attractive To Investors

car wash

Up until about three years ago, the car wash industry wasn’t particularly appealing to investors. Private equity firms owned approximately 1% of the nation’s 65,000 total car washes and 2% of the nation’s roughly 17,000 conveyor-style car washes as of June 2019, according to data from one of the industry’s specialized brokerages, New York-based Car Wash Advisory LLC.

In the next five years, some industry advisers expect that to change.

“We’re nearing the basket tipping point, but there is still a ton of runway to go,” BlackArch Partners LP managing director John Conklin said. “If I think about car wash operators with some sort of private equity backing in this space five or so years ago, I’d say there were no more than 10. Now I’d say there’s probably 50.”

Car washes were for a long time primarily a cash-heavy, labor-intensive model. Previously, the focus was on full-service car washes, where a driver would wait 45 minutes to have their car washed and detailed.

Advances in technology have transformed once-old school car washes into scalable businesses. New sales and marketing models like monthly memberships create recurring revenue for car washes and allow them to build a brand.

It is not unheard of for a single location to have 5,000 subscribers, and when you do the math, even at a lower cost package of $20 per month, that is $1.2 million in guaranteed revenue annually.

This new model increases revenue consistency and decreases the need for on-site staff. This is exactly the type of business investors salivate over.

They are interested in car wash businesses that own express washes, also known as tunnel washes and conveyor washes. These locations are nearly fully automated, require minimal labor, and utilize conveyor or belt equipment to transport vehicles through the car-washing process.

According to bankers participating in the acquisitions, investors are now paying high sums for regional chains, as much as 18-to-20 times earnings before interest, taxes, depreciation, and amortization. This is a significant increase from previous years.

According to Grand View Research Inc., the express car wash industry has a current market size of over $11 billion and is anticipated to increase at a CAGR of 4.0 percent to 4.8 percent through 2028.

In the United States, where more than 72% of drivers utilize professional car wash services on average 13 times annually, conveyor car washes routinely generate the highest profits in the industry.

Demand is outpacing the supply. Even in the face of inflation and rising gas prices, its believed that the satisfaction customers feel from keeping their cars clean combined with the relative affordability of the service has created a strong opportunity for growth.

However, as a result of rising prices for labor, chemicals, and equipment, the sustainability of the business model for car washes is being put to the test by high inflation.

Some investors are concerned that customers would stop washing their vehicles if the economy experiences a downturn, despite the fact that the car-washing sector likes to promote the fact that it is resilient to economic downturns.

“Car washes went from not being on the private equity radar to being at the forefront for nearly every firm,” says Geoffrey Jervis, co-founder, and CEO of Mint Eco Car Wash. “They all want to be in the industry in some way, which means there are billions of dollars flowing into this space right now.”

Tony O. Lawson

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Alitheia Raises $100 Million to Invest In Women Owned Businesses Across Africa

Alitheia

Alitheia IDF (AIF), Africa’s first women-led and women-focused private equity fund announced the final close of a $100 million fund in December of 2021. With this final close, Alitheia IDF becomes the largest woman-focused private equity fund by value in Africa.

Led by principal partners Polo Leteka and Tokunboh Ishmael, Alitheia IDF invests in growth-stage companies across six African countries: Nigeria, South Africa, Ghana, Zimbabwe, Lesotho and Zambia.

Alitheia
Polo Leteka co-Founder and Principal Partner – South Africa(Credit: Bridget Corke Photography)

The fund has a mandate to plug the over $42 billion investment gap between male and female entrepreneurs as a means of catalyzing the economic power of African women as producers, distributors, and consumers.

In 2021, the fund began implementing this mandate by leading investment rounds in five women-led businesses across essential sectors including agribusiness, education, manufacturing, housing, technology, and logistics.

The investee companies are Jetstream Africa (Ghana), ReelFruit Ltd (Nigeria), SKLD (Nigeria), AV Light Steel (South Africa), and Chika’s Food (Nigeria).

“Globally, women have tremendous purchasing power as consumers and controllers of household economics. In the same vein, women entrepreneurs have a significant presence in Africa’s SME sector with African women making up 58% of the continent’s self-employed population.

Alitheia
Tokunboh Ishmael – co-Founder and Principal Partner – Nigeria

However, despite this economic power and presence, African women are underserved as consumers and producers.

This has had a huge impact on economic growth as the potential of more than half of the continent’s population remains untapped due to structural and systemic issues.

We are proactively working towards filling this gap with a clear mandate to support women-led businesses across the continent while raising awareness for gender-smart investment as a path towards inclusive economic growth,” said Principal Partner Tokunboh Ishmael in Nigeria.

African women have remained underserved by the financial sector even as the historical investment gap between men and women continues to widen.

Estimates show that African women receive less than 5% of all investment on the continent even though over 40% of small and medium-sized enterprises (SMEs) in Africa are women-led.

Reports by McKinsey point out that closing the investment gap will lead to 26% gross domestic product (GDP) growth ($28 trillion) by 2025.

By applying a gender-smart lens to investment, Alitheia IDF is setting the pace and providing a framework for gender-inclusive investments with the goal of enabling economic growth for African countries and, critically, African women.

Polo Leteka, Principal Partner in South Africa, explained that it is her hope that Alitheia IDF’s leading example will inspire other investors on the continent to invest in women, noting that women have an important role to play in unlocking the economic potential of Africa.

She further stated that “the historic inability to appropriately capture the economic potential of African women has affected Africa’s development. Alitheia IDF is on a mission to fill this gap by using a gender smart approach and financial capital to empower women as consumers and producers.”

Tony O. Lawson

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Africa Focused Private Equity Firm Raises $900 Million

africa focused

Development Partners International (DPI), a premier investment firm focused on Africa, today announced that African Development Partners III Fund (ADP III), has exceeded its US$800 million target, and is set to hold a final close at US$900 million, with an additional US$250m of dedicated co-investment capital. This brings a total of US$1.15 billion for investments on the continent. The fundraising establishes ADP III as one of the largest funds dedicated to investing global capital in Africa.

ADP III will invest in established and growing companies in industries that benefit from Africa’s fast-growing middle class and the increasing digital transformation of the continent. All investments have the highest standards of impact and environmental, social and governance (“ESG”) work. In doing this work DPI is using its proprietary DPI Management System (“DPIMS”) toolkit to deliver impact in line with 10 of the UN Sustainable Development goals, as well as driving the highest standards of ESG.

Runa Alam, co-founder and Chief Executive of DPI commented: “Africa remains an exciting investment destination with positive demographics, rising adoption of technology, and rising consumer and business spending. Against this backdrop, DPI has continued to generate top quartile returns by leveraging our team’s deep-rooted local expertise across the African continent.

“As we look towards the future with our ADP III fund, we will focus on innovation-driven companies leading the digital transformation of the economies in which they operate. In addition, our deep integration of impact and ESG initiatives in the investment life cycle has been widely recognised and ensures we are known as a trusted partner.”

ADP III secured capital from a broad range of leading pension and sovereign wealth funds, development finance institutions, endowment and foundations, insurance companies, fund-of-funds, asset managers, and impact investors. The global investor base represents 20 countries across North America, Europe, Middle East and Africa. In addition to strong support from existing investors, DPI welcomed over 25 new LPs into its investor base. This is testament to DPI’s track record and ability to create institutional-grade investment opportunities in Africa, while continuing to deliver sustained environmental and economic impact.

Joanne Yoo, Managing Director at DPI, said, “The strong support for ADP III validates our strategic focus, creative approach and investment discipline. We are grateful for the trust that our investors have placed in DPI, and we are confident that our talented team will continue to deliver competitive returns and impact.”

ADP III has made four investments to date, including:

  • Channel VAS, a leading global fintech business providing mobile financial services;
  • SICAM, a leading Tunisian tomato producer, in one of the largest private equity transactions undertaken in the country;
  • Kelix Bio, a biopharmaceutical platform broadening access to speciality generic drugs across Africa; and
  • MNT-Halan, Egypt’s leading fintech ecosystem.

Additionally, DPI has a significant pipeline of investment opportunities across the continent, focused on key sectors of the economy such as financial services, healthcare, agri-business, education, and telecom infrastructure.

DPI places an emphasis on promoting best in class standards in ESG through its investments, with the aim of creating institutionalised high-performing companies at exit. Working with its portfolio companies, DPI seeks to contribute to the UN Sustainable Development Goals by implementing its proprietary Impact and ESG Management System based on three key impact themes: Job Quality, Climate Change, and Gender Balance.

ADP III was the first African fund signatory to the Operating Principles for Impact Management (“Impact Principles”), an international market standard for impact investing and the first to be granted 2x Flagship Fund status, as part of the 2x Challenge, a gender-lens initiative.

PJT Park Hill acted as advisor and placement agent for ADP III, and Debevoise & Plimpton LLP served as legal adviser for the Fund.

Tony O. Lawson

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3 mins read

Largest Black Owned Mutual Fund Secures $200 Million Investment To Scale Minority Owned Businesses

Black Owned Mutual Fund

Ariel Investments, the largest Black owned mutual fund, is launching a private investment firm, Ariel Alternatives, which will initially focus on funding and scaling minority-owned businesses. The move into private investments is a first in the company’s 38 year history.

Ariel Investments co-CEO Mellody Hobson along with Leslie Brun are the co-founders of Ariel Alternatives. Mr. Brun, an Ariel board member and founder of the investment firm, Hamilton Lane, will be its chairman and CEO and will lead the first initiative of Ariel Alternatives called “Project Black.”

The new fund, which has secured $200 million in initial funding from JPMorgan Chase, plans to invest in minority owned businesses and non minority owned businesses that will serve as leading suppliers to Fortune 500 companies.

The firm plans to infuse the non minority owned businesses with the capital and minority executive talent needed to qualify as a certified minority business. In order to qualify as a certified minority business, suppliers must be at least 51% minority owned, managed, and controlled, according to standards established by the National Minority Supplier Development Council.

According to Brun, Project Black aims to fill a massive diversity gap in the corporate America supply chain. Fortune 500 companies spend about 2% annually on minority-owned suppliers, well short of the 10% to 15% spending goals many corporations set last year.

Despite “announcements and pronouncements” by corporations about increasing the amount they spend with minority-owned suppliers, many have difficulty finding those with enough capacity to meet their needs, Brun said.

“We’re intending to create those minority suppliers of scale, in concert with our Fortune 500 relationships, to provide the solution to their issue, as well as create the opportunity for us to then leverage that into the social impact initiatives that we have,” he aded.

According to a release announcing the fund, “Project Black will forge a new class of Black and Latinx entrepreneurs. The initiative will seek to position these companies as leading suppliers to Fortune 500 companies — supporting supply chain diversity.”

Project Black plans to focus predominately on health care, industrial, media and marketing, outsourcing, manufacturing and packaging, technology, transportation and logistics, and financial and professional services.

 

Tony O. Lawson

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