When Nicholas Antoine and Chad Strader first met at the Starbucks on Michigan Avenue in Chicago, they dissected the book ‘Why Should White Guys Have All the Fun?’
The book — by Reginald Lewis, the first Black man to execute a $1 billion leveraged buyout in the US — had a firm hold on Antoine and Strader, who hatched a plan together to do something few Black people have done in the US. They would start a private-equity firm.
“There really aren’t that many Black-owned investment businesses period. And 100% Black-owned private equity firms? You can count on two hands,” Antoine told Insider in an interview.
The pair founded Red Arts Capital in 2015, and is currently raising a new fund of up to $225 million, adding dollars to what is currently an extremely small pot.
Women and minority-owned private-equity firms accounted for just 6% of the total capital raised in the US in 2021, according to Fairview Capital’s annual Market Review of Woman and Minority-Owned Private Equity and Venture Capital Firms. That may be changing: Fairview reported a 25% uptick in the number of women and minority-owned private-equity firms from 2020 to 2021, with the number now totaling 627 firms in the US.
African-American investment firms are growing in number too, albeit from a relatively low starting point. The number of Black-led US venture capital and private-equity firms raising money in 2021 rose 25% from the previous year, reaching 84 firms, according to Fairview.
But just 15% of those Black-led investment firms execute buyout strategies like Red Arts — a fraction of the private-equity pie dominated by outfits helmed by white men. These figures also only include firms led by Black people, not necessarily Black-owned firms. Antoine told Insider he wants to expand that very small club.