Northwestern Mutual Launching $100 Million Fund Targeting Black Communities

Northwestern Mutual is launching a $100 million Impacting Investing fund targeted at Black and African American communities locally and across the country.

The fund will focus its investments in three key areas, physical and social infrastructure, access to capital for individuals and businesses and healthy, sustainable neighborhoods, according to the financial services company.

The fund is intended to generate a positive return for policy owners.

“Northwestern Mutual has historically made substantial investments in the communities in which it operates and has a long-standing commitment to diversity, equity and inclusion. The Impact Investing Fund is intended to make measurable improvement in racial equity, while also generating a positive financial return for our policyowners,” said Ray Manista, executive vice president and chief legal and compliance officer at the insurance company, in a statement.

The fund is an outgrowth of the company’s 2020 Sustained Action for Racial Inequality task force. Created in the wake of the killing of George Floyd, the task force is led by president and CEO John Schlifske.

The company, in a press release announcing the new fund, says it has already made $30 million in investments.

One of the immediate direct beneficiaries of the fund is Milwaukee entrepreneur Dana Guthrie, who is raising her own fund to make seed and early-stage investments in startups. NM’s fund will back Guthrie’s Gateway Capital fund. The fund has raised at least $12.5 million so far and expects to make its first investments in pre-revenue startups.

“If you’re in the Milwaukee startup ecosystem and you’re not fortunate enough to be able to raise a significant ‘friends and family’ round, it can be difficult getting an idea off the ground,” said Guthrie in a statement. “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. We are appreciative of Northwestern Mutual’s commitment to our strategy and the Milwaukee community.”

Guthrie’s fund also has received investments from the Greater Milwaukee Foundation and West Bend Mutual Insurance Company. It is one of five venture capital funds backed by the state-created Badger Fund of Funds.

NM’s new fund is also backing Siebert Williams Shank’s Clear Vision Fund that will make investments in minority-owned businesses. The Black-owned financial firm is based in New York City and Oakland.

The fund, according to the press release, does not include a $20 million effort, via Northwestern Mutual Future Ventures venture capital fund, to invest in Black entrepreneurs. The company reports making five investments via that effort to date. It also jointly operates the Northwestern Mutual Black Founder Accelerator in partnership with Milwaukee-based startup accelerator gener8tor.

The Milwaukee-based insurance company has more than $308 billion in assets and $200 billion in client investment assets.