The Brief | February 5, 2024

The Brief: Confronting bias in asset management

The team at


Greetings, Agents of Impact! In today’s Brief:

  • Countering the attack on diversity in asset management
  • Health services for low-income patients
  • Apollo’s clean transition fund
  • Asset allocation for impact 

Featured: Returns on Inclusion

Confronting real bias in asset management to set the record straight on DEI. The gloves are coming off. Attempts to roll back initiatives promoting diversity, equity and inclusion have opened the door to a more fulsome debate about the real racial biases affecting the managers who steer more than $82 trillion in investment assets in US capital markets. The campaign against DEI has included lawsuits and state legislation, as well as diatribes from hedge fund billionaires like Pershing Square’s Bill Ackman and Citadel’s Ken Griffin. Bring it on, says political strategist Robert Raben, who as head of the Diverse Asset Managers Initiative, or DAMI, is turning up the heat on firms that appear to be “curating for whiteness.” If DEI opponents are serious about barring race as a selection factor, “Explain the studies that show 98.6% of assets are managed by white men,” Raben tells ImpactAlpha. “I used to have to pretend to be nice because people didn’t like being attacked. Now that they’re attacking, we can take the gloves off and really talk about what’s going on.”

  • Diversity of perspectives. Of the $82 trillion in US investment assets, all but roughly $1 trillion are managed by white, male-owned firms. The gap between the diversity of the country and the diversity of asset managers can be seen as a proxy for persistent racial and gender wealth gaps more broadly. By diversifying who manages the nation’s wealth, “we can better tap unforeseen opportunities and build a more equitable and prosperous future for us all,” write the authors of the latest Knight Foundation report on the asset management industry. 
  • Weaponizing DEI. Last year’s Supreme Court ruling barring affirmative action in higher education admissions turned DEI into a target across the economy. Conservative strategists have hit companies, government programs and venture capital firms, including Fearless Fund and Hello Alice, with lawsuits claiming that race-specific granting and lending strategies amount to racial discrimination against white people. Ackman jumped into the fray in last year’s campaign to oust Claudine Gay, Harvard’s first Black president. Ackman, who manages the $18 billion New York hedge fund Pershing Square, “says out loud what so many people falsely think,” says Raben. “They overlook white mediocrity, but when there’s Black excellence, they explain that away.”
  • Racial bias. Ackman’s anti-diversity statements run counter to Pershing Square’s own stated values, and may violate the firm’s fiduciary duty, says Raben. The Congressional Black Caucus, with a prod from DAMI, sent a letter to Ackman and Pershing Square last month requesting diversity data from the firm. “We strongly believe that diversity is an economic imperative and a crucial element of fiduciary duty,” wrote the CBC members.
  • Cultural cover. Despite the anti-DEI attacks, much of corporate America remains sold on the value of diversity. Last month, JPMorgan’s Jamie Dimon, referring to himself as “a full-throated, red-blooded, patriotic, unwoke, capitalist CEO,” said the bank isn’t retreating from its diversity, equity and inclusion efforts. A critical mass of public pension funds, universities and philanthropies now report their utilization of diverse asset managers, Raben says. The increased scrutiny is in service of a broader shift in public opinion to position DEI not as a burden but as a value-driver. When you get there culturally, he says, “It really doesn’t matter what the Harvard case says,” he says. “My goal is not a legal victory here. This is a cultural fight.” 

Dealflow: Circular Economy

Impaqto Capital backs Sinba’s recycling services in Peru. Sinba provides recycling services for 1,500 residential customers and 70 companies, including Starbucks, Nestle and Coca-Cola. Its services help offset Peru’s more than 30,000 tons of daily solid waste and curb more than 310 tons of carbon emissions monthly. The company estimates that 80% of Peru’s solid waste is reusable. Impaqto supported Sinba with $100,000 in revenue-based financing. The impact investment firm writes checks of between $50,000 to $200,000 to early-growth stage social enterprises in Ecuador, Peru, Chile and Colombia.

  • Economic mobility. Sinba partners with grassroots organizations like the San Martín de Porres Association to give Peru’s informal waste collectors a pathway to formal work. Most recycling in Peru and other emerging economies depends on individuals who pick reusable materials out of the trash. Recycling, says Sinba’s Andrea Rivera, “is an act of love.” She wants to shift society’s perception of informal trash pickers to one of “empathy and gratitude.”
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Accompany Health scores $56 million to provide health services for low-income patients. Physician Rahul Rajkumar started Accompany Health to “place social determinants of health front and center” and to help underserved patients “connect the dots” between primary care and other providers. “The patients who need the most support are the most often left behind,” he wrote. The company, based in Bethesda, Md., chose Detroit as its first market, and serves 8,000 patients there, in partnership with an undisclosed healthcare provider. The company’s Series A equity round was backed by Venrock, ARCH Venture Partners, Granite Capital Management and others.

  • Patients first. Accompany connects patients with medical teams that include physicians, clinicians, nurses, mental health specialists and pharmacists, as well as community health workers and social workers for home and virtual consultations. The online patient portal is accessible to underserved patients, including those with disabilities and limited English skills and with slow internet service.
  • Dive in

Dealflow overflow. Investment news crossing our desks:

  • Media Development Investment Fund invested in elDiarioAR, an independent media outlet in Argentina that focuses on social, gender, environmental, human rights, climate and poverty issues against the country’s “backdrop of economic, political, social and press upheaval.” (MDIF)
  • Private equity giant Apollo kicked off its second Clean Transition fund less than a year after launching its $4 billion first fund as part of a $50 billion climate strategy. (New Private Markets)
  • Izote Biosciences clinched $2.6 million to develop a salt-based (rather than an oxygen-based) fermentation process for lab-grown meat and other biotechnologies, which the company says lowers production costs. (TechCrunch)
  • Breakthrough Energy Ventures notched $555 million for its Select fund, according to an SEC filing. The fund makes follow-on investments in existing BEV portfolio companies to support demonstration projects for new energy and climate technologies. (SEC)

Short Signals: What We’re Reading

🧪Out of the lab. Direct air capture, synthetic biology, CO2-based green products and fusion energy are among the top game-changing technologies Boston Consulting Group says are poised for a breakout “ChatGPT” moment. (BCG)

👩🏽‍🦱👨🏾‍🦲👩🏻‍ Diverse unicorns. Of the 1,000 startup unicorns minted in the past decade, 38 are Black or Latino founded. Those billion-dollar babies, including Rihanna’s Savage X Fenty and fintech Brex, are valued at a collective $109 billion. Their most active investor: Tiger Global Management. (Harlem Capital)

⏩ Blended trends. More nature and climate finance, solutions tailored to local needs, catalytic philanthropy, and better measurement and accountability are among the trends driving blended finance in 2024. (UBS)

🤹 Impact across asset classes. How can impact investors break out of siloed asset classes? More tactical allocations to impact across asset classes is one strategy identified by Impact Frontiers, which explores the issue in a new report. (Impact Frontiers)

🍄 Psychedelic M&A. Fierce Biotech counted three M&A deals and a half-dozen partnerships in the burgeoning psychedelic therapy field last year (for background, see, “Investors in psychedelics aim to disrupt mental health economics – and outcomes”). Otsuka scooped up Mindset Pharma, MPM BioImpact grabbed Reunion Neuroscience, and Cybin acquired Small Pharma. (Psychedelic Alpha

Agents of Impact: Follow the Talent

Don’t miss these upcoming ImpactAlpha partner events:

  • Feb. 26-28: Neighborhood Economics (San Antonio) (use code NE_PARTNER to save $100)
  • Feb. 27-29: FLII 2024, Mérida (take 30% off with code PARTNER_ALPHA30)

Aaron Tanaka, co-founder of both the Boston Ujima Project and Center for Economic Democracy, will join One Project as co-director in July… Beneficial State Bank taps Terra Neilson, previously with US Bank, as chief impact officer… BlueMark promotes Sarah Gelfand to president… Felipe Arango, former technical advisor to IFC, becomes chief operating officer of Fair Trade USA… Meg Massey, former director at Upaya Social Ventures, joins Social Finance as policy and communications associate director. 

Criterion Institute seeks a results team manager… Impact Frontiers is recruiting a senior manager and director of field building projects… JPMorgan is hiring a development finance institution vice president in New York… Also in New York, UNICEF USA is on the hunt for an impact investing fund manager… CrossBoundary Group is looking for a senior associate for its nature fund in London.

Princeton University will host, “The Inflation Reduction Act: Triumphs, challenges, and the pursuit of true environmental justice,” Monday, Apr. 1… Healthy Eating Research, a national program office of the Robert Wood Johnson Foundation, is looking to fund research on family-focused programs for equitable access to nutritious food. 

👉 View (or post) impact investing jobs on ImpactAlpha’s new Career Hub.

Thank you for your impact!

– Feb. 5, 2024