Wal-Mart-backed fund half-way invested

Half of Wal-Mart’s $25 million commitment to the Pinnacle Minority Supplier Development Fund has been deployed in five portfolio companies.

The Pinnacle Minority Supplier Development Fund, a socially-conscious co-investment fund, has drawn down half of its $25 million (€18 million) commitment from Wal-Mart Stores to invest in five companies.

The fund made its first investment of $5 million in Simeus Foods International, a producer of frozen food products, in May 2006. Since then, the firm has invested $1 million in Total Transportation Services, $1 million in The Warrior Group, a designer and manufacturer of modular buildings, and $2.5 million in MAYA Entertainment, a cinema chain operator.

The fund expects to invest in 10 to 12 companies, each of which it will exit within a five-year holding period, according to a statement released by Wal-Mart.

Wal-Mart invested $25 million in the fund in October 2005, as an extension of its supplier diversity program. The fund’s prospective candidates must have the capacity to distribute products and services to major retailers, and they must also be certified as minority or women-owned or minority-controlled businesses as defined by the National Minority Supplier Development Council and the Women’s Business Enterprise National Council.

Wal-Mart launched its office of diversity in 2003, after its diversity efforts had been criticised for years. In 2005 the company agreed to an $11 million settlement that was the direct result of an investigation into the hiring of illegal workers at its stores. The year before, the company was hit with a large sex-discrimination suit.