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October 7, 2022

MassMutual dedicates additional $100m to invest in diverse, first-time fund managers

First Fund Initiative aims to advance racial equity, deliver strong returns

Massachusetts Mutual Life Insurance Company (MassMutual) today announced that it will dedicate an additional $100 million to continue investing in diverse, first-time fund managers through its First Fund Initiative, building on the $50 million the company previously invested through this impact investing initiative. The First Fund Initiative is focused on funds led by Black, Latinx and Indigenous fund managers with a differentiated investment thesis to generate positive social impact and financial returns.

Diverse-owned private equity firms continue to outperform their benchmarks, according to a study by the National Association of Investment Companies (NAIC), the largest organization of diverse-owned alternative investment firms. Member firms of NAIC outperformed the Burgiss Median in 83.3% of the periods measured on net Multiple on Invested Capital (MOIC), underscoring how diverse fund managers represent an overperforming yet untapped market.

Since 2021, MassMutual has invested in seven funds led by diverse, first-time fund managers across the United States through the First Fund Initiative – including its most recent investments in Impact America Fund, a venture fund that backs early-stage companies increasing the economic power of marginalized communities, and L’Attitude Ventures, a venture fund that exclusively invests in Latino-owned, early-stage companies with high-growth potential.

Diane Henry, head of impact investment funds at MassMutual who is responsible for overseeing the First Fund Initiative said, “We believe more equitable access to capital will play a pivotal role in unlocking untapped growth in the US economy and are excited to continue investing in the next generation of diverse fund managers. We are moving beyond just examining the problem of a lack of diversity in capital access. With this additional capital, we are doubling down on the opportunity to back these high-performing investment managers. Through our First Fund Initiative and leadership in this space, we hope to open the door for other institutions to follow.”

In addition to the First Fund Initiative, MassMutual also launched the $50 million MM Catalyst Fund (MMCF) last year, bringing the company’s total impact investment commitment to $200 million. This fund makes direct investments in Black-led businesses based in the company’s home state of Massachusetts as well as businesses based outside Boston to fuel innovation across the Commonwealth. Since its inception, MMCF has backed 15 companies across a range of industries.

Liz Roberts, MassMutual head of impact investing added, “There is tremendous opportunity in the companies and funds that are getting overlooked because of systemic barriers. Through impact investing, MassMutual is building innovative approaches and alternatives in deal sourcing, selection, diligence and underwriting to identify high potential investments that are also reducing structural inequities and advancing racial equity. We look forward to expanding upon the foundational work and success with these initiatives to drive financial returns and social change.”

Source: Company Press Release

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