Northwestern Mutual is earmarking $100 million to invest in Black communities on both a national and local level, with the goal of addressing inequality and the racial wealth gap, the Milwaukee-based life insurer and financial services firm said Tuesday.
The new impact investing fund has already deployed $30 million across several investments. It's focused on opportunities that will improve physical and social infrastructure, such as housing and education; access to capital for Black businesses and individuals; and healthy and sustainable neighborhoods.
"The $100 million is an amount that we think gets us in a position to make a material difference," Northwestern Mutual executive vice president and chief legal and compliance officer Ray Manista said.
On top of making a positive impact, the fund is designed to generate financial returns in line with what Northwestern Mutual expects from its general investment account, Manista said. That account was at $264 billion in 2020 with a 5.3% compound annual growth rate over 10 years, according to the company.
One of the impact investing fund's first contributions was to Milwaukee's Gateway Capital Partners, which raised a total of $13.5 million to invest in early-stage startups in Milwaukee County. Run by managing director Dana Guthrie, the fund will focus on startups with connections to low- and moderate-income communities.
"Our fund is designed to be the first institutional check into promising young startups, giving them 15 to 18 months of runway to hit some key milestones that ultimately set them up to attract follow-on capital in the future," Guthrie said in a statement.
Among other investments, the Northwestern Mutual impact investing fund has contributed to New York City-based Clear Vision Impact Fund, which is affiliated with the Black-owned financial services firm Siebert Williams Shank & Co. LLC.
The remaining capital will be invested throughout the next several years. There's no predetermined timeline or specific amounts allocated for local and national investments, Manista said. Northwestern Mutual is hiring a dedicated individual to find investment opportunities for the fund, he added.
Northwestern Mutual's new impact investing fund is among several outcomes of its Sustained Action for Racial Equity task force launched last year. The company also has allocated $20 million to invest in Black entrepreneurs and runs a Black Founder Accelerator in partnership with Wisconsin-based gener8tor.
