Massachusetts Mutual Life Insurance Co. is promising additional capital to support diverse, first-time fund managers.
The Springfield insurance company announced that it would dedicate an additional $100 million to its First Fund Initiative, which supports Black, Latinx and Indigenous-led firms that invest in companies making a positive social impact and financial returns.
MassMutual previously invested $50 million in its First Fund Initiative when it launched in 2021, according to a MassMutual spokesperson.
“We believe more equitable access to capital will play a pivotal role in unlocking untapped growth in the US economy and are excited to continue investing in the next generation of diverse fund managers,” said Diane Henry, MassMutual’s head of impact investment funds who oversees the First Fund Initiative, said in a statement.
“We are moving beyond just examining the problem of a lack of diversity in capital access. With this additional capital, we are doubling down on the opportunity to back these high-performing investment managers. Through our First Fund Initiative and leadership in this space, we hope to open the door for other institutions to follow,” Henry added.
More money, more businesses
MassMutual said that it has already invested in seven firms led by diverse, first-time fund managers across the U.S. A spokesperson told BostInno that this new capital will allow the insurer to support 10 to 15 additional businesses.
Reinventure Capital, a venture capital fund that invests in U.S. companies led by BIPOC and womxn founders, was the only Boston-based firm to receive capital from the First Fund Initiative thus far. A MassMutual spokesperson said the firm received $10 million.
The other firms to receive funds from the First Fund Initiative are the Impact America Fund, L’Attitude Ventures, The 22 Fund, Plexo Capital, Raven Indigenous Fund and VamosVentures.
“There is tremendous opportunity in the companies and funds that are getting overlooked because of systemic barriers. Through impact investing, MassMutual is building innovative approaches and alternatives in deal sourcing, selection, diligence and underwriting to identify high potential investments that are also reducing structural inequities and advancing racial equity,” said Liz Roberts, MassMutual’s head of impact investing.
Last year, MassMutual also launched its MM Catalyst Fund. Half of the $50 million fund was committed to supporting Black-owned and -managed businesses in the Bay State. The other half was for fueling innovation across the state by investing in companies outside Boston. MassMutual said the fund has backed 15 companies.
In addition to its impact investing, MassMutual Ventures, the venture capital arm of the insurer, told the Boston Business Journal this summer that it was investing from its fourth U.S. fund worth $100 million.
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