TLDR:
- The number of women- and minority-owned private equity and venture capital firms in the US grew nearly 20% from 2022 to 2023.
- 907 women- and minority-owned private equity and venture capital firms in the U.S. by the end of 2023, according to Fairview Capital’s 2023 market review.
More Diverse Managers are Raising Venture and PE Funds at Fastest Pace, Research Finds
By Matt Toledo
The annual survey conducted by Fairview Capital revealed significant growth in women- and minority-owned private equity and venture capital firms in the U.S. The survey found that the number of diverse managers in VC and PE grew to 907 by the end of 2023 from 760 at the end of 2022. Research also showed that 50% of funds were continuing funding rounds that began in 2022.
The report highlighted that investment opportunities with minority-owned firms are dominated by venture capital as barriers to entry in VC are lower for diverse managers, leading to higher growth. The underrepresentation of diverse managers in buyouts and growth equity was noted, as many of them are raising smaller funds compared to larger, more tenured firms that require significant up-front investment. Diverse managers have found more success building track records in VC through smaller “proof of concept” funds and angel investing, which have lower barriers to entry.
While diverse managers have been impacted by market sentiment shifts in uncertain times, the report indicated that limited partners tend to gravitate towards larger and more tenured firms for perceived safety. Despite the challenges faced by diverse managers, the growth of women- and minority-owned firms in the VC and PE space shows promising potential for the future of asset management culture.
