- The number of woman- and minority-owned PE/VC firms grew 25% 2020-21, according to a new report
- In the US the number of woman- and minority-owned PE/VC firms grew to 627 in 2021, up 25% from just 502 in 2020
- Diverse-owned Fairview Capital found women and minority-owned capital managers claimed a larger portion of the private markets landscape than ever before in 2021
Fairview Capital has published its annual Market Review of Woman and Minority-Owned Private Equity and Venture Capital Firms. First launched in 2014, this year’s findings (2020-21) reveal the number of woman- and minority-owned private equity and venture capital firms grew to 627 in the United States, up 25 per cent from just 502 in 2020. Fairview says private capital markets are more diverse and dynamic than ever before, as reported by New Private Markets.
The market review considers Fairview’s data on the size, evolution and current characteristics of number of PE/VC firms that are majority owned (>50%) by women and/or ethnic minorities. Only firms headquartered and primarily investing in the United States are included in the data that shows over time a 6X increase in the number of diverse GPs - seven years after only 100 woman- and minority-owned firms were counted in the inaugural report (2014).
In what Fairview says is a continuation of a multi-year trend, steady growth in the number of woman- and minority-owned firms can largely be attributed to opportunities in venture capital. Highlighted by Venture Capital Journal, three quarters of woman- and minority-owned firms (76 per cent) were raising venture capital funds in 2021, up from 72 per cent in 2020, and the report also finds most of these investors are focused on early stage strategies, seed and pre-seed stage opportunities.
“[VC has represented] the majority of the diverse manager opportunity set for the better part of a decade… Further, most woman and minority-owned firms raising venture capital funds are focused on early-stage strategies, often investing at the seed or pre-seed stage, offering potential investors the highest risks, but also the highest return potential.”
- Total proportion of private capital being raised by diverse-owned firms rose from 4 to 6% year on year 2020-21
- 280 woman and minority-owned firms were in the market raising capital (up from 234 firms in 2020)
- VC continues to draw diverse managers with 76% firms raising venture capital funds in 2021
- Record 175 (63%) of those raising capital were new firms raising first-time funds
- $100M median target fund size (lower than market average)
Fairview Capital’s conclusion:
“The opportunity set of woman and minority-owned private equity and venture capital firms in 2021 exhibited significant growth and dynamism… Diverse managers feature fundraising scopes that may be narrower and approaches that are significantly different from larger and more tenured firms. Additionally, a majority and growing proportion of the opportunity set is in venture capital, an asset class that features a high dispersion of returns and favors those investors with specialized networks and knowledge of the category.”
Download the full report at Fairview Capital.