Allstate Investments has committed $100 million to set up an emerging manager programme that will provide capital to private equity and real estate firms that count women or minorities among their senior managers or that partner with or invest in women- and minority-owned businesses.
The programme will be open not only to firms that are majority owned by women or minorities, but also those that employ women or minorities as investment professionals participating in the firm’s carry. Additionally, the programme will consider real estate firms that invest in underserved or urban markets with women- or minority-owned development and operating partners and private equity firms that invest in women- and minority-owned businesses.
“It’s a call to action,” said Edgar Alvarado, Allstate’s head of real estate equity. Even after 25 years in real estate, he noted the lack of diversity in the private equity and real estate industries, which “is a problem. This is what we’re doing to address it.”
Under the programme, the number of funds that a manager has raised, the size of the funds and the number of years it has been in business will hold less weight than the firm’s diversity practices, according to Alvarado. Allstate anticipates making capital outlays of $5 million to $10 million each to 10 to 20 emerging managers, which typically will be raising funds between $50 million and $100 million in size.
Allstate, which will invest in emerging managers through a fund of funds separate account, plans to select a It's a call to action.
It's a call to action.
While the selected manager will have discretion over the $100 million pool, Allstate will work with the firm to come up with specific investment criteria and guidelines. It plans to have the programme up and running by the end of the year.
Allstate is the latest private equity real estate investor to establish an emerging manager programme, following in the footsteps of US pension plans such as the California Public Employees Retirement System, Texas Teachers and the Employees Retirement System of Texas.