Wal-Mart Creates Private Equity Fund to Boost Supplier Diversity
BENTONVILLE, Ark. -- Further legitimizing its commitment to supplier diversity, Wal-Mart Stores, Inc. said it will invest $25 million to establish a private equity fund that will directly issue equity investments in up to nine women- and minority-owned business enterprises. The world's largest retailer unveiled the new fund on Monday at the 2005 National Association of Investment Companies (NAIC) conference in San Diego.
The co-investment management fund, which will have an allocation life of five years, will be managed by Dallas-based Aldus Equity to provide equity capital to women and minority-owned business enterprises seeking capital for acquisitions, joint ventures, and other growth and expansion initiatives, Wal-Mart said.
According to NAIC, although minorities account for 30 percent of the U.S. population, minority companies receive less than 2 percent of all venture and private equity funds.
"Even though small businesses are one of the fastest growing sectors of the economy, access to capital remains a key barrier to growth for women and minority-owned businesses," said Jay Fitzsimmons, s.v.p. of finance and treasurer, Wal-Mart Stores, Inc., in a statement. "By creating this fund we help fill a significant void and can have a positive impact on those businesses that are ready and able to move to that next level of national and international distribution for retailers."
Wal-Mart's v.p. of diversity relations, Esther Silver-Parker, added: "While many leading corporations are decreasing their vendor base, we are looking to assist those unique entrepreneurs who have talent and capacity not only to serve Wal-Mart, but also to help drive supplier diversity throughout the retail sector."
The co-investment management fund, which will have an allocation life of five years, will be managed by Dallas-based Aldus Equity to provide equity capital to women and minority-owned business enterprises seeking capital for acquisitions, joint ventures, and other growth and expansion initiatives, Wal-Mart said.
According to NAIC, although minorities account for 30 percent of the U.S. population, minority companies receive less than 2 percent of all venture and private equity funds.
"Even though small businesses are one of the fastest growing sectors of the economy, access to capital remains a key barrier to growth for women and minority-owned businesses," said Jay Fitzsimmons, s.v.p. of finance and treasurer, Wal-Mart Stores, Inc., in a statement. "By creating this fund we help fill a significant void and can have a positive impact on those businesses that are ready and able to move to that next level of national and international distribution for retailers."
Wal-Mart's v.p. of diversity relations, Esther Silver-Parker, added: "While many leading corporations are decreasing their vendor base, we are looking to assist those unique entrepreneurs who have talent and capacity not only to serve Wal-Mart, but also to help drive supplier diversity throughout the retail sector."