Key Takeaways
- • Fairview Capital reports that the number of woman and minority-owned private equity and venture capital firms in the United States surpassed 1,000 for the first time in its 2024 Market Review, a nearly tenfold increase since the firm began tracking the data in 2014.
- • A record 537 woman and minority-owned firms were actively raising capital in 2024, the largest year-over-year increase since 2019, with 284 (53%) raising first-time funds.
- • The median fund size target for these firms fell from $100 million in 2023 to $75 million in 2024, while the share closing at or above target dropped from roughly 44% (2014-2021 average) to 24% (2022-2024 average).
- • Venture capital dominated the opportunity set, with 76% of woman and minority-owned firms in market raising VC funds, tying an all-time high.
Summary
Fairview Capital, a West Hartford, Connecticut-based venture capital and private equity investment manager, released its 2024 Market Review of woman and minority-owned private equity and venture capital firms. According to the report, the number of such firms in the United States surpassed 1,000 for the first time, a milestone the firm attributes to steady growth amid structural shifts in private markets, including changing institutional priorities and broader economic and political forces.
The report identifies a record 537 woman and minority-owned firms actively raising capital in 2024, the largest year-over-year increase since 2019. New managers were a major driver, with 284 firms raising first-time funds, representing 53% of the opportunity set. Aakar Vachhani, Managing Partner at Fairview Capital, attributed this to sustained conviction from managers launching their own firms and increased spin-outs from larger platforms, while noting that many first-time fundraises are taking longer, often stretching across multiple years.
The fundraising environment remains challenging. The median fund size target fell from $100 million in 2023 to $75 million in 2024, reflecting both the surge in new firm formation, since first-time funds are typically smaller, and modest increases for successor funds. Fairview states the gap between these firms and the broader market remains significant and may widen. The share of firms closing funds at or above target declined from approximately 44% annually between 2014 and 2021 to an average of 24% between 2022 and 2024.
Venture capital remained the dominant strategy, with 76% of woman and minority-owned firms in market raising VC funds, matching an all-time high. The report also notes steady growth and increasing institutionalization among woman-owned firms, along with expansion across demographic groups underpinned by novel strategies.
Kwesi Quaye, Partner at Fairview Capital, said that while market conditions remain uncertain, innovation, particularly the rise of AI, will shape new firm formation, investment decision-making, and value creation. Fairview expressed optimism that institutional investors engaging programmatically in this segment are well positioned for the next wave of opportunities. Fairview Capital, which has over $10 billion under management since its founding more than 30 years ago, invests on behalf of institutional clients including public and private pension plans, foundations, and endowments.
The report identifies a record 537 woman and minority-owned firms actively raising capital in 2024, the largest year-over-year increase since 2019. New managers were a major driver, with 284 firms raising first-time funds, representing 53% of the opportunity set. Aakar Vachhani, Managing Partner at Fairview Capital, attributed this to sustained conviction from managers launching their own firms and increased spin-outs from larger platforms, while noting that many first-time fundraises are taking longer, often stretching across multiple years.
The fundraising environment remains challenging. The median fund size target fell from $100 million in 2023 to $75 million in 2024, reflecting both the surge in new firm formation, since first-time funds are typically smaller, and modest increases for successor funds. Fairview states the gap between these firms and the broader market remains significant and may widen. The share of firms closing funds at or above target declined from approximately 44% annually between 2014 and 2021 to an average of 24% between 2022 and 2024.
Venture capital remained the dominant strategy, with 76% of woman and minority-owned firms in market raising VC funds, matching an all-time high. The report also notes steady growth and increasing institutionalization among woman-owned firms, along with expansion across demographic groups underpinned by novel strategies.
Kwesi Quaye, Partner at Fairview Capital, said that while market conditions remain uncertain, innovation, particularly the rise of AI, will shape new firm formation, investment decision-making, and value creation. Fairview expressed optimism that institutional investors engaging programmatically in this segment are well positioned for the next wave of opportunities. Fairview Capital, which has over $10 billion under management since its founding more than 30 years ago, invests on behalf of institutional clients including public and private pension plans, foundations, and endowments.
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