NEW YORK, Dec. 8, 2020 /PRNewswire/ -- Today, Living Cities' Blended Catalyst Fund (BCF), announces a capital investment in Aux21 Capital Partners (Aux21), a BIPOC-owned early stage venture capital firm that supports entrepreneurship in U.S. immigrant communities by increasing access to early stage growth capital and sourcing diverse micro-funds that invest in underrepresented entrepreneurs. The firm, led by Chinedu Enekwe and Mark Fleming, believes companies must have a global strategy embedded in their DNA to maintain a competitive advantage in their respective sectors.
BCF's investment in Aux21 is the result of Living Cities' Capital for the New Majority strategy (CNM), a multi-faceted, long-term vision for how capital can be used to address the challenges faced by Black and brown fund managers and improve their ability to make equitable capital allocation decisions to, ultimately, increase support for founders of color and achieve better outcomes for all people living in U.S. cities. The BCF team was introduced to Aux21 co-founder Chinedu Enekwe through Living Cities' Builders & Benefactors network, a community of fund managers of color in the private equity and venture capital space.
"We are excited to partner Living Cities," said Chinedu Enekwe, General Partner at Aux21 Capital. "The investment by BCF will accelerate Aux21's speed to market and ability to hire top talent in the early innings of our firm's inaugural fund."
Entrepreneurship accounts for nearly all net job creation in the U.S. and high-growth businesses are responsible for all employment growth in the economy. However, research suggests that although total gross receipts at firms owned by people of color are growing faster than white-owned firms, at least 77% of venture capital is invested in college-educated, white men. Similarly, despite having professional experience and credentials equal to that of their white peers, or even greater, fund managers of color continue to face systemic barriers that prevent their access to larger markets. Fewer than 1.3% of the global financial assets under management are managed by women and people of color.
"As applied researchers, we see capital as a key driver of social change and an important tool needed to shift who gets to make capital allocation decisions in the market," said Demetric Duckett, Managing Director at Living Cities. "We have learned that traditional capital market channels have failed fund managers of color, so we are committed in our partnership with Aux21 to leveraging our unique risk models to test innovative investing approaches to better address their realities and expand their ability to make different decisions."
In order to address the challenges faced by fund managers of color and shift how capital allocation decisions are made within the market, BCF is expanding its support of fund managers of color. Research from the Library of Congress and others shows that managers of color make different capital allocation and operational decisions than white managers do. Investing in these fund managers will have a concomitant effect on entrepreneurs of color in which these fund managers may invest.
About Living Cities
Founded in 1991, Living Cities is a collaborative of the world's largest foundations and financial institutions. Living Cities fosters transformational relationships across sectors to connect those who are willing to do the hard work of closing racial income and wealth gaps. The organization partners with cross-sector leaders in cities across the country to imagine and create an America in which all people are economically secure, building wealth and living abundant, dignified, and connected lives. To learn more, visit www.livingcities.org.
About Aux21 Capital Partners
Founded in 2020, Aux21 is a BIPOC-owned early stage venture capital firm, led by Chinedu Enekwe and Mark Fleming. Aux21 is a seed stage firm investing in the future of commerce being built by 1st and 2nd generation immigrant founders to compete and win locally & in global markets.
Jeff Raderstrong, Living Cities, [email protected], 646-442-3236
SOURCE Living Cities