The Evolution of Private Equity: Impactful Innovation

Private Equity as an asset class has evolved considerably over the past thirty-plus years I’ve been engaged in the financial markets, from the early days of corporate raiders using leverage as their primary tool to the far more nuanced role private equity seeks to play today. 

While the public markets were once where all the action was with ready access to capital and the best and brightest openly competing to deliver innovative products and services, now companies are opting to stay private for longer, fueled by a record $2.25 trillion of undrawn commitments to private equity funds globally. As this recent article from the CFA Institute suggests, today private markets are the place to find innovative high growth investment opportunities. 

At Uplifting Capital, we see firsthand the power private capital can have in driving successful outcomes. The levers available to our GPs to create value are significant. The markets they are serving tend to be historically under-resourced with a lack of curated solutions to address existing demand. The private markets afford the necessary time for agile iteration away from the public spotlight to turn sparks of innovation into scalable businesses. Private equity GPs are also able to bring their extensive networks to bear to ensure portfolio companies have access to industry and operational expertise, talent, and stage-appropriate capital. 

Two of our recent investments in Private Impact Fund I (PIF I) underscore the unique opportunities available to investors in the private markets. CityRock Venture Partners Fund II is an early-stage venture firm that has a proprietary sourcing channel from its in-house Studio, a pre-seed/seed incubator/accelerator. The Fund benefits from the firm’s extensive engagement with management teams and employs a ‘feed the winners’ approach. Group Black is one such CityRock portfolio company in which PIF I also made a direct investment. Named one of Fast Company’s 10 Most Innovative Companies for Media in 2023, Group Black is led by seasoned industry veterans and offers a distinctive media model that is purpose-built to benefit from the tailwinds of advertising dollars targeting Black-owned media. While still young, there are multiple proof points of desirability and viability of the model with major consumer and media brands. The fact that both investments are focused on start-ups at the nexus of growth, impact, and diversity affords investors access to untapped markets primed to benefit from innovative solutions. 

The ability to generate both compelling financial returns and meaningful impact through private market investments in high growth innovative companies has never been more promising. We are as excited as ever about our pipeline of opportunities. 

Thank you for entrusting us with your capital.