Bahrain-based alternative asset manager Investcorp plans to partner with US-based Xponance on a venture to back new companies in its sector run by managers from more diverse backgrounds.
Investcorp's Strategic Capital Group and Xponance's Alt Solutions arm will provide initial stakes and seed capital to more diverse and women-owned general partnerships running alternative asset funds. The pair said the move is aimed at increasing access to capital and other resources for firms that are believed to have been historically overlooked.
“At Investcorp, diversity is a key part of our uniquely global culture and we understand the critical importance of different perspectives as a driver of thoughtful decision-making and investment success," Investcorp's co-chief executive Rishi Kapoor said.
"We are pleased to be partnering with the talented team at Xponance, with their 25-year track record of investing in diverse or woman-owned businesses, to help our investors gain more exposure to such managers with the potential for growth and value creation."
Alternative asset managers invest in asset classes outside public markets, such as private equity, private credit, venture capital, hedge funds, commodities, real estate and infrastructure.
The amount of alternative assets under management globally is forecast to grow to $17.6 trillion by 2025, up from $10.74tn at the end of last year, according to data provider Preqin.
Currently, just 20.3 per cent of the industry’s employees were female at the end of last year, up from 19.7 per cent at the end of 2019. Venture capital had the highest female representation in the workforce, at 21.8 per cent, but women make up just 12.2 per cent of positions in the industry's senior ranks.
Xponance, a $12bn investment firm, set up Alt Solutions earlier this year to provide capital to emerging and diverse alternative asset managers.
“Our entrance into the alternatives space with ISCG is a natural extension of our DNA as a ‘force multiplier’ to expand opportunity for innovative investment strategies offered by diverse and woman-owned firms," said the company's founder and chief executive, Tina Byles Williams. Ms Byles Williams joined Investcorp's Strategic Capital Group's advisory board at the beginning of this year.
Despite being underserved and undercapitalised for many years, the diverse manager community has been expanding "at a higher rate than the overall private equity and private credit markets over the past few years", ISCG partner David Lee said.
"At the same time, there is mounting interest from investors in gaining exposure to diverse managers. Through this partnership with Xponance, we are delighted to be able to connect with a broader group of stakeholders.”