SE Williams | Black Voice News
The Black Economic Development Fund (BEDF), managed by the Local Initiatives Support Corporation (LISC), a nonprofit community development finance institution, achieved its goal of $ 250 million in capital to invest in banks run by Blacks, anchor institutions, companies and real estate developers and is now preparing to deploy its first investments.
The BEDF, launched last summer, is part of LISC’s 10X Project, a billion-dollar strategy to close racial gaps in health, wealth and opportunity. The private equity fund has raised capital from 11 public and private companies, with McKinsey and Company having recently released $ 15 million.
“We are excited about the wave of interest from impact investors, as it speaks not only to the quality of the fund, but also to a growing recognition that access to capital is what facilitates access to funds. opportunities, ”said George Ashton, Managing Director of LISC Strategic. Investments, the fund management arm of the company, one of the largest community finance organizations in the country.
“Impact investors align their treasury strategies with their missions in order to strengthen the economic base of their businesses and economic justice for their clients,” he added.
Beneficiaries of the first investments
With BEDF now fully subscribed, LISC also announced the fund’s first five investments this week, with no less than 20 additional fund investments expected by the end of the year.
The initial deals include deposits in two black-owned banks to help build their capacity, as well as various loans to three black-owned real estate development companies that create and develop economic opportunities and jobs in the communities where they operate. .
The common thread is that these businesses, like so many minority-run businesses, have typically not had access to the flexible capital they need to grow. LISC’s goal is to provide funding that helps them grow their businesses, while helping to lay the groundwork for other investors to follow.
Among the five recipients are Optus Bank, Columbia, SC; Unity National Bank, Houston; : Dantes Partners, Washington, DC; Bridging the Gap (BTG), Pittsburgh; and Phoenix Adams Rising, Jacksonville, Florida.
Investing for prosperity
“The Black Economic Development Fund allows us to make an impact by investing in black and brown talent who want to be in this industry and ensure they thrive,” noted Buwa Binitie, with Dantes Partners. “Investing represents the freedom for us to be who we want to be and to own our projects. It allows us to evolve in ways we never quite imagined. In a very short time you will start to see ribbon cuts for the trades that this fund is enabled for.
According to Lisa Glover, President and CEO of LISC, “These five transactions illustrate the power of inclusive investing. They fuel black-run businesses and benefit communities of color, and they also contribute to the broader landscape of regional economic opportunities by catalyzing jobs, local incomes, business activity, and gains in quality of life. They help build widely shared prosperity, well beyond the individual activities supported by each investment.
Companies that have invested in BEDF
The fund’s investors are: Netflix, which helped launch the fund, Paypal, Costco, Square, Inc., Aflac, Wayfair, DuPont, McKinsey and Co., ThermoFisher, HubSpot and Dicks Sporting Goods.
“Fueling social mobility and opportunities like this was our vision for the launch of the Black Economic Development Fund last summer,” said Aaron Mitchell, director of human resources, and Shannon Alwyn, director of treasury, at Netflix. . “More and more companies are recognizing that redirecting capital to black-led institutions improves local equity, and we invite other companies to do the same.”