ILLUMEN CAPITAL RELEASES ANNUAL IMPACT REPORT, PROVIDING INSIGHTS ON FOSTERING A MORE OPTIMAL ASSET MANAGEMENT LANDSCAPE
The report explores proprietary quantitative and qualitative data that highlights industry trends, including that the vast majority of fund managers recognize the financial & moral benefits of reducing their racial and gender biases.
OAKLAND, Calif., July 25, 2024 /PRNewswire/ -- Illumen Capital, a fund of funds addressing systemic inequity by reducing racial and gender bias in investing, released its Annual Impact Report today, as part of a larger effort to understand the influence of the firm's bias reduction programming and stewardship efforts. Collected quantitative and qualitative data showcases the impact of the firm's unique approach to supporting fund managers in their efforts to build a more optimal and inclusive asset management industry. This report aims to understand the influence of the firm's bias reduction programming and stewardship efforts.
Studies show that as stressors increase, individuals are more likely to rely on their biases when making decisions. This tendency is pronounced in the asset management industry during periods of high inflation, market volatility, and increasing political polarization, amidst ongoing backlash against diversity, equity and inclusion (DEI) efforts. These heightened biases often result in a disproportionate decline in funding being allocated to women and people of color, exacerbating existing disparities. Illumen Capital has remained steadfast in its commitment to addressing bias. By focusing on mitigating the impact of bias on financial returns, Illumen Capital aims to unlock both impact and economic value within its portfolio and the broader investment landscape.
"Despite recent industry challenges, the team at Illumen Capital has remained dedicated to our core thesis of supporting our fund managers in their racial and gender equity journeys," said Daryn Dodson, Managing Partner of Illumen Capital. "Our latest Annual Impact Report highlights the importance of continuing to support underrepresented fund managers and working toward a more inclusive and optimal asset management field."
Key quantitative and qualitative data from the 2023 report showcase the benefits of Illumen Capital's approach to supporting fund managers. Led by Joanna Kuang and Leila Mengesha, the insights focus on the mindsets of portfolio fund managers and staff. Highlights include:
- Illumen Capital continues to transparently publish data on the racial and gender demographics of its portfolio firms and underlying portfolio companies, setting an example for ongoing accountability;
- Illumen Capital's portfolio firms continue to become increasingly diverse, reaching gender parity at 50% women and 50% men across their full teams;
- Illumen Capital's portfolio has double the number of women partners and four times the number of underrepresented partners of color represented across its portfolio, compared to the industry benchmark;
- Over 80% of respondents recognize the financial and moral benefits of DEI, with 87% advocating for perspectives that mirror societal demographics;
- Between 2022 and 2023, there was a 12% increase in fund managers' confidence in their ability to drive change through diversified investments;
- Compared to 2022, responses indicated an increased availability of best practices, policies, and guidance, potentially including tools like Illumen's proprietary curriculum, the IllumenIQ™ toolkit. In 2023, 45% of individuals cited a lack of 'best practices and policies' as one of the largest barriers to increased representation, compared to 58% the year prior. However, it's worth noting that despite this improvement, respondents still predominantly perceive organizations as responsible for driving DEI progress, rather than individual action;
- There is a lack of accountability for pushing DEI initiatives forward. While junior team members are increasingly demanding a push into DEI, 41% feel there's a lack of accountability for those in charge of advancing DEI-focused initiatives;
- In 2023, 70% of respondents reported they do not believe that pipeline issues (e.g., too few candidates) contribute to promotion disparities. This contrasts with the findings from 2022, where 68% of respondents identified pipeline scarcity as a leading cause for the lack of promotion of underrepresented people of color (URPOC). This significant shift indicates an evolving perspective that promotions are not solely dependent on candidate availability but are influenced by other systemic factors such as bias and lack of access.
"A primary takeaway from this year's report is that partnering with executive coaches or other partners fosters a more integrated approach to bias reduction," said Kuang, Senior Vice President of Product Development and Impact at Illumen Capital. "We've always been proponents of training, continually providing new resources and initiatives, such as written tools, animated videos, impact measurement and management support, and cohort learning opportunities, to help our partners evolve and refresh their approach to bias reduction and ultimately see its benefits."
Over the past year, Illumen Capital continued to make significant investments in bias reduction infrastructure, further enhancing and expanding IllumenIQ™, a proprietary bias reduction toolkit designed to support portfolio fund managers in identifying and mitigating individual and organizational bias. Illumen Capital also hosted two Impact Experience events, taking fund managers and investors to Montgomery, Alabama to better understand the legacy of slavery in an effort to shift mindsets and promote a deeper understanding of racial and gender bias.
The firm also expanded capital deployment to first-time and emerging fund managers, primarily investing in funds led by women of color. By leveraging coaching, Illumen tailored programs to address the unique DEI goals and needs of each fund manager in its portfolio. Additionally, Illumen Capital has added a new impact theme - Inclusive Systems, defined as fund managers who focus on building diverse, equitable solutions and specifically support diverse communities in the products and services they fund.
As of December 31, 2023, Illumen Capital had committed $210 million across 33 unique funds across its portfolio.
For additional information, or to view the full report, please visit https://www.illumencapital.com/.
ABOUT ILLUMEN CAPITAL
Illumen Capital is a Black-owned and led fund of funds dedicated to achieving racial and gender equity across investing. Illumen Capital invests in venture, growth, and private equity funds, and works closely with fund managers to install a set of strategies and tools designed to reduce racial and gender bias in the hiring, investment, and company support processes. This research-informed bias reduction program – supported by a strategic relationship with Stanford SPARQ - empowers fund managers to expand their investable landscape and uplift entrepreneurs who have historically been overlooked and underestimated.
MEDIA CONTACTS
Courtney Tolbert
5W Public Relations
[email protected]
SOURCE Illumen Capital
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article