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.
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