Bank of America’s commitment to promoting diversity and inclusion in the investment industry has reached a new milestone. The bank announced on Thursday that it will be providing over $500 million in equity investments to minority- and women-led fund managers, with the aim of supporting diverse entrepreneurs.
Emphasizing its dedication to diversity, Bank of America disclosed that more than 60% of the fund managers eligible for the equity pool are led by women, over 65% by Black individuals, over 20% by Hispanics and Latinos, and over 15% by Asians. Tram Nguyen, the global head of strategic and sustainable investments at Bank of America, shared these statistics.
Bank of America initiated this program in 2020, and it has already made a significant impact. More than 150 funds have utilized the equity to invest in over 1,000 companies, collectively controlling a remarkable $7 billion of capital. This support has directly benefited 1,500 diverse entrepreneurs and has resulted in the employment of more than 21,000 individuals.
In a news release, Tram Nguyen stated, “We work across our company to address critical needs in our communities, including the lack of access to capital that diverse business owners face as they start or grow their businesses.”
The urgency for such initiatives is evident in the stark disparities in venture capital funding. According to data from Crunchbase, ventures led or founded by Black or Asian individuals typically received just 0.9% of venture capital funding in 2023. Similarly, businesses led by Hispanic and Latino individuals received only around 0.94% of such funding.
Last year, the total venture capital dollars invested in companies dropped by 36%, largely influenced by the impact of inflation and rising interest rates. Black-owned businesses bore the brunt of this decline, experiencing a staggering 45% drop in venture capital investment, as reported by CNBC’s Gabrielle Fonrouge in February.
Bank of America is committed to further supporting Black- and minority-owned banks, in collaboration with the National Football League and the National Black Bank Foundation, according to CNBC’s Frank Holland.
Tram Nguyen reinforced Bank of America’s dedication to its fund managers, expressing, “We’re very focused on supporting our fund managers. We’re building a community, connecting them with our company and its vast network and resources, connecting them with each other and the broader investment community.”
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