A Bank of America branch in New York’s Times Square.
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Bank of America has committed to giving more than $500 million in equity investments to minority and women-led fund managers to support diverse entrepreneurs, the bank announced Thursday in a press release.
More than 60% of the fund managers who can pull from the equity pool are led by women, over 65% are led by Black individuals, over 20% by Hispanics and Latinos and more than 15% are led by Asians, said Tram Nguyen, global head of strategic and sustainable investments at Bank of America.
The program started in 2020 and so far more than 150 funds have used the equity to invest in over 1,000 companies, collectively controlling $7 billion of capital, Bank of America said. This translates to support for 1,500 diverse entrepreneurs and the employment of over 21,000 people.
“We work across our company to address critical needs in our communities, including the lack of access to capital that diverse business owners face as they start or grow their businesses,” Nguyen said in a news release.
In 2023 so far, ventures led or founded by Black or Asian individuals typically received approximately 0.9% of venture capital funding, while businesses led by Hispanic and Latino individuals received roughly 0.94%, according to data from Crunchbase.
Total VC dollars put into companies last year dropped 36%, affected by the rise in inflation and interest rates, and Black-owned businesses saw a 45% drop, CNBC’s Gabrielle Fonrouge reported in February.
Bank of America is also separately working with the National Football League and National Black Bank Foundation to support Black- and minority-owned banks, CNBC’s Frank Holland reported.
“We’re very focused on supporting our fund managers,” Nguyen said. “We’re building a community, connecting them with our company and its vast network and resources, connecting them with each other and the broader investment community.”