WASHINGTON, June 23, 2021 / PRNewswire / – Apis & Heritage Capital Partners (A&H) announced its first closing at $ 30 million for its flagship Legacy Fund I, which is designed to help close the country’s racial wealth gap by moving businesses with large workforces of color to 100% employee-owned businesses.
The fund has exceeded its $ 15 million first close target, with the support of leading investors and advisers including the Ford Foundation, the Rockefeller Foundation’s Zero Gap Fund, the Skoll Foundation and its advisor Capricorn Investments, Gary Community Investments, Ascension Investment Management and other.
A&H is a BIPOC-led private equity fund that has developed an ’employee-led buyout’ (ELBO) model that offers retiring owners a fair market price for their businesses, often with benefits. important tax, as the employees become the employees / owners of the business. company with the help of A&H. In America today, 60% of black workers and 65% of LatinX workers have $ 0 in pension assets making workers vulnerable to financial insecurity as they age and without resources to pass on to the next generation. A&H expects the average worker who benefits from an A&H-assisted buyout to accumulate retirement savings of $ 70,000 – $ 120,000 each, which can be life changing.
A&H Legacy Fund I intends to buy at least eight private companies from retiring founders, converting at least 500 workers over the next five years into employees / owners. A&H will focus on businesses primarily in waste hauling, landscaping, senior care, commercial cleaning, food processing and other essential service sectors in America.
“We are looking to make life-changing investments with this first fund to close the large and growing wealth gap in this country, especially for black and brown workers,” said Todd Leverette, principal co-founder at A&H. “Making this announcement so close to Juneteenth seems right, as A&H is paving the way for financial freedom for people of color across United States. “
A&H was designed by Leverette in collaboration with colleagues from the Democracy at Work Institute (DAWI). DAWI is a national organization dedicated to innovation, fairness and scale for worker-owned businesses, and will provide technical assistance to A&H portfolio companies. With a planning grant from Citi Community Development, essential seed funding from the Keneda Foundation, and additional support from the Kellogg Foundation, DAWI has made space and resources available to Leverette and the co-founder. Philippe reeves to incubate A&H. Co-founder Michael brownrigg joined soon after to help move the concept of a one-off deal to a scalable private equity fund. Jason ollison and Nathalie Edwards completed the partnership in 2021. The firm hired its first Partner, Kyle Chin-How, shortly after.
“There are two traditional avenues to building wealth in America: you can own your home or you can own your business,” said Philippe reeves, co-founder at A&H. “A&H is focusing on the latter, especially for the workforce of color, who have been excluded from equity participation for so long.”
A&H will also announce a strategic Legacy Fund I partnership with LISC’s New Markets Support Company (NMSC), which will become the national partner for the ELBO senior debt tranche. LISC and A&H are aligned with the Mission and Values to direct resources to businesses and communities of color that have been denied growth funding over the years.
“The NMSC is proud to partner with this new transformational fund to close the racial wealth gap,” said Kevin boes, President and CEO of NMSC. “By helping small, vital and community-based businesses grow from founder to many owners, A&H will protect the health of these businesses and the future of their workforce of color.”
A&H’s flagship fund easily exceeded its first-close target due to substantial interest from some of the country’s top foundations and impact investors.
“The A&H team has taken an innovative approach to closing the racial wealth gap and building a more inclusive economy,” said Maria kozloski, Senior Vice President of Innovative Finance at the Rockefeller Foundation. “Their new ELBO model resolves many pain points from previous ESOP strategies while overlapping with a racial equity lens. The Rockefeller Foundation is proud to be a part of these efforts, providing investors with an offering that can generate clear impact and competitive returns with great potential for scale. “
The company and its executives have been selected by Impact Assets as an IA 50 Emerging Impact Manager 2021 and have been invited to join the first cohort of VC Include scholarships for fund managers BIPOC Emerging VC and Impact Fund. Todd is a frequent speaker on the power and promise of ESOPs and recently became a board member of the National Center on Employee Ownership.
“We are grateful for the support and trust our early close LPs have shown us,” said Nathalie Edwards, Managing Director and General Counsel of A&H. “A&H is now in a good position to buy big companies and share the rewards with the people who really deserve them – the workers. Especially the workers of color. “
About Apis & Heritage Capital Partners
A&H Capital is a mezzanine debt private equity fund that buys private companies with a large workforce of color from founders who want a return on their life’s work and who also care about their legacy. . A&H then converts these businesses into 100% employee-owned businesses. Businesses that are 100% owned by their employees pay no federal taxes, and in 44 of the 50 states, no state taxes. A&H provides business support and training to build an engaged and empowered workforce and an informed leadership team. The data clearly shows that when employees feel engaged, productivity and profitability increase, staff turnover decreases and, overall, companies outperform their peers. A&H is looking for companies with at least $ 1 million in EBITDA and with 40 or more employees, where at least a third of the workforce is people of color. A&H focuses on essential service sectors such as landscaping, plumbing, food processing, commercial cleaning, healthcare and transportation, and its geographic reach is national.
In addition to the investors listed above, the first close sponsors of A&H include clients advised by Veris Wealth Partners, clients advised by Tiedemann Advisors, the Opus Foundation, the Franciscan Sisters of Perpetual Adoration, Kachuwa Impact Fund, Social Capital Partners, the Sorenson Foundation, clients advised by Groupe Candide, clients advised by Fresh Pond Capital / Reynders McVeigh Capital Mgmt., clients advised by Natural Investments, clients advised by Chordata Capital, the Cooperative Assistance Fund, the Libra Foundation with the support of Groupe Candide , certain office families and private investors.
A&H is advised by a group of exceptional experts in investment, management, worker-centered training and operations. Advisors include Melissa Bradley (1863 Companies), Walter mayo (CEO, Expert.AI), Dwayne Booth (Directional capital), Dr Russell Read (former CIO, CalPERS and Alaska Permanent Fund), Karin burns (Franklin Energy), Melissa Hoover (DAWI), and Michael quarrey (VP Web Industries and expert in property culture). On the transaction side, A&H is advised and assisted by SES ESOP Strategies, one of the country’s leading law, investment banking and ESOP advisory firms, Mission Driven Finance and K&L Gates LLP.
A&H will target a final fund size of 40 $ – 50 millions.
About the Rockefeller Foundation
The Rockefeller Foundation is a pioneering philanthropy founded on collaborative partnerships at the frontiers of science, technology and innovation to empower individuals, families and communities. We work to promote the well-being of humanity and make opportunities universal. Our goal is to develop renewable energies for all, to stimulate economic mobility and to ensure equitable access to healthy and nutritious food. For more information, sign up for our newsletter at rockefellerfoundation.org and follow us on Twitter @RockefellerFdn.
About the Zero Gap Fund
This funding is part of the Rockefeller Foundation’s Zero Gap Fund. Launched in partnership with the John D. and Catherine T. MacArthur Foundation through the Catalytic Capital Consortium (C3), the Zero Gap Fund is a means of channeling private investment to address the world’s most pressing challenges. For more information visit: www.rockefellerfoundation.org/initiative/zero-gap-fund/
SOURCE The Rockefeller Foundation