Illumen Catalyst Fund aims to address structural barriers faced by overlooked managers and founders through investment and platform support
OAKLAND, Calif., Nov. 21, 2024 — Illumen Capital, an impact fund of funds addressing systemic inequity by reducing racial and gender bias in investing, today announces the raise of its $32.75 million Catalyst Fund, a vehicle designed to support first-time fund managers and entrepreneurs, particularly those from underrepresented backgrounds.
“Despite a growing presence in private markets, diverse managers are continually struggling to gain access to institutional capital. Often subject to familiarity bias – the tendency for investors to gravitate to familiar options over unfamiliar ones – these underrepresented fund managers are systematically overlooked when compared to their white counterparts, according to Illumen Capital’s research with Stanford SPARQ1. Furthermore, investors increasingly favor well-known names and larger funds2, making it even more challenging for emerging companies and funds to secure the initial funding essential for success.
The Illumen Catalyst Fund will specifically address this lack of capital by investing in diverse-led funds and early-stage companies, marking the first time Illumen Capital has integrated direct investments into its broader strategy. Directly addressing these inequalities is especially urgent now, as biases tend to rise during periods of high inflation, market volatility, and political divisiveness.
“Despite years of acknowledging racial inequities, the institutional investing landscape has seen little progress and, in some respects, has deteriorated since our nation’s racial reckoning in the summer of 2020,” said Daryn Dodson, Managing Partner of Illumen Capital. “With the closing of the Catalyst Fund, Illumen Capital aims to directly confront the barriers these fund managers face. Our thesis and strategy remain strong, and the continued investment from our partners highlights the immense value that often goes unrecognized in underestimated managers and entrepreneurs.”
The Catalyst Fund included capital from Health Forward Foundation, the California Wellness Foundation and the Winthrop Rockefeller Foundation, among others. For many investors, the Catalyst Fund is not their first investment in Illumen Capital, demonstrating their continued confidence in the firm’s mission to leverage their influence in reducing bias in venture capital and private equity decision-making.
“The Illumen Catalyst Fund provided a compelling opportunity to support the next generation of Black and Latino/a/x venture managers and early-stage companies,” said Christie Zarkovich, Chief Administrative, Financial and Investment Officer, Health Forward Foundation. “With its strong sourcing networks, expertise in backing first-time managers, and capacity to make smaller investments, Illumen Capital is an invaluable partner in our efforts to promote racial equity.” (Please see “Testimonial Disclosures” below.)
Prior to the Catalyst Fund, Illumen Capital closed its nearly $170 million Fund II in 2023.
About Illumen Capital
Illumen Capital is a fund of funds specializing in the next generation of diverse-led venture and private equity firms. 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.
Press Contact:
Catherine Toor
[email protected]
NOTICE TO READERS
THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This announcement has been prepared by Illumen Capital Management, LLC (“Illumen”) and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this announcement is superseded by, and is qualified in its entirety by, the offering materials applicable to such investment products or services.
TESTIMONIAL DISCLOSURES: REFERENCES TO, AND TESTIMONIALS FROM, ILLUMEN’S INVESTORS SHOULD NOT BE RELIED UPON AS AN INDICATOR OF FUTURE PERFORMANCE OR ANY GUARANTEED LEVEL OF SERVICE, SKILL OR TRAINING. Health Forward Foundation is an investor in the Catalyst Fund. As a current investor of Illumen, Health Forward Foundation may have an incentive to express positive opinions of Illumen. However, Illumen has not provided any cash or non-cash compensation to Health Forward Foundation in connection with its statements. References to Illumen’s other investors should not be viewed as testimonials by such investors. Investors should not rely on testimonials or endorsements for any purpose and should conduct their own review prior to selecting any investment product or service.
AN INVESTMENT IN A FUND ENTAILS A HIGH DEGREE OF RISK, INCLUDING THE RISK OF LOSS. There is no assurance that a fund’s investment objective will be achieved or that investors will receive a return on their capital. Investors must read and understand all the risks described in a fund’s final confidential private placement memorandum and/or the related subscription documents before making a commitment.
- 1 Lyons-Padilla, S., et al. (2019). Race influences professional investors’ financial judgments. Proceedings of the National Academy of Sciences, 116(21), 10284-10289.
- 2 McKinsey & Company. (2024). McKinsey global private markets review 2024: Private markets in a slower era.
SOURCE Illumen Capital
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