Black-owned asset management firm Ariel Investments has announced the closure of Project Black, a private equity fund aimed at uplifting minority owned businesses. It raised $1.45 billion in commitments from various investment firms.

U.S. bank JPMorgan Chase & Co. will also contribute up to $200 million in assistance. The fund will invest in sectors like consumer retail, energy and infrastructure, financial services, healthcare, sovereign and private wealth, and technology.

“We are scaling change. In so doing, we will redefine what it means to be a minority-owned business in the United States. We are grateful to our investors who share our mission,” Mellody Hobson, co-founder of Ariel Alternatives, said in a statement.

Founded in 1983, Ariel Alternatives L.L.C. is the parent company of Ariel Investments L.L.C., a global asset management firm. The company had approximately $16.2 billion in assets under management as of December 31, 2022, a statement reads.

Other investors include:

AmerisourceBergen Corporation
Amgen Inc.
Ballmer Group
Hobson/Lucas Family Foundation
Lowe’s Companies, Inc.
Merck & Co., Inc.
NextEra Energy, Inc.
Nuveen, the asset manager of TIAA
Qatar Investment Authority
Salesforce, Inc.
Synchrony Financial (co-investor)
Truist Financial Corporation (co-investor)
Walmart Inc.

To scale these businesses, the fund will invest in middle-market firms with revenues between $100 million and $1 billion. Investors will commit between $100 and $200 million over the fund’s seven-year investment period.

The fund's investment strategy will pursue six to 10 middle-market companies in high-margin industries, a statement reads. The industries include healthcare, industrial, media and marketing, outsourcing, manufacturing, and packaging. Additionally, the technology, transportation and logistics, and financial and professional services industries, were also considered.

An investment portfolio of promise

Ariel Investments pointed to Sorenson, a U.S. communications provider for people who are deaf and hard of hearing, as proof of concept.

Project Black acquired the company in April 2022 for $1.3 billion. At the time, just three per cent of its leadership team came from minority backgrounds. Since then, 43 per cent of its senior leadership team and board are from BIPOC groups, a statement reads.

Moreover, Sorenson appointed a chief impact officer to hold the company accountable for the company's environmental, social, and governance (ESG) goals.

The investment team behind the fund plans to collaborate with its firms to pursue organic and non-organic development methods.

To guarantee that the firms in its portfolio can create job opportunities and spur economic development for underrepresented minorities, the fund will follow ESG and social impact policies, a statement reads.

“We chose to partner with large institutions that are seeking to drive widespread corporate vendor diversity. Our goal is to help close the racial wealth gap by creating minority-owned businesses of scale through access to capital and customers,” Leslie Brun, co-founder and CEO of Ariel Alternatives, said in a statement.