A guide to investing in first-time women and diverse fund managers
Fiduciary duty is often cited as the reason why investors and investment advisors limit the universe of investable propositions to structures and managers that are familiar and considered established. And yet we know that a significant portion of the market – investment in women setting up funds for the first-time – is currently being overlooked. Many of the most innovative funds are from emerging managers. This guide, produced by GenderSmart’s First-Time (Women and Diverse) Fund Managers Investing with a Gender Lens Initiative, is a tool for asset allocators and advisors, as well as for fund managers. It is designed to help you make the case, be inspired by leading investors who are showing the way, understand the structural solutions to backing more of these funds and structured vehicles, find deal flow, and understand how to diligence and move capital into these innovative managers.
Fiduciary Guide to Investing with Diverse Asset Managers and Firms
From the Diverse Asset Managers Initiative (DAMI). This guide is designed for institutional investors (trustees and staff), primarily of public, corporate, faith, and labor union pension funds, as well as foundation and university endowments, who are interested in exploring the possibilities of investing institutional assets with diverse-owned asset management firms.
NAIC Performance Study Shows Diverse Asset Managers Continue to Beat Benchmarks
From the National Association of Investment Companies (NAIC). Diverse-owned private equity firms continue to outperform their benchmarks, according to Examining the Returns 2019: The Financial Returns of Diverse Private Equity Firms, a study released by NAIC. Despite delivering consistent returns, diverse- and women-owned firms collectively manage only 1.3 percent of the investment industry’s $69 trillion in assets under management.
Preqin Special Report: Making the Case for First-Time Funds
From Preqin. Covering areas such as first-time fund performance and fundraising, and with examples of LPs that have had success investing in these new managers, LPs reading this report can expect a data-driven overview of first-time fund investing.
First-time funds have traditionally faced challenges securing capital commitments from LPs due to the nature of traditional closedend fund due diligence. Most investment professionals (or their external advisors) with responsibility to vet these private capital funds typically place significant emphasis on the GP’s track record, firm and investment history, and the duration of time for which the investment team has worked together. As closed-end funds are long-term and illiquid investments, many LPs do not feel comfortable committing significant capital to unproven managers, especially as many of these first-time funds focus on diverse and innovative, yet unproven, investment ideas.
Every top performing and “brand name” GP has had to raise a fund for the first time. Whether these first-time funds were teams spun off from a balance sheet at an investment bank or insurance company, or individuals leaving a more established GP to start their own firm, there have always been LPs providing capital commitments to back these investment ideas. Many of the LPs that have supported these first-time GPs’ initial investment strategies and talents have been rewarded with strong (and in some cases, exceptional) fund performance, increased portfolio diversification, experience with niche strategies and other factors beneficial to their overall investment program.