HarbourVest's Annual ESG Report

Diversity, equity, and inclusion

The partnership that has powered HarbourVest’s success since its founding in 1982 continues to fuel everything we do in support of our clients, colleagues, and communities. We celebrate the vital work being done to strengthen our firm and industry and reaffirm our commitment to constant improvement in pursuit of diversity, equity, and inclusion.

We must hold ourselves accountable for creating sustainable and lasting change through intentionality, perseverance, and transparency. People are our greatest asset, and we will continue to focus on driving equitable outcomes to support one another as we tackle whatever the future holds.
Kelley King
Chief Diversity, Equity, and Inclusion Officer

Investing with purpose

We are working to shape the future of private markets with a specific focus on making access to private capital more equitable. Our long history of investing in emerging and diverse managers and under-resourced markets continues today because we recognize the untapped potential of deserving managers who have been historically overlooked by mainstream investment channels, despite providing competitive financial returns. We believe providing support in this space will drive transformative changes that will benefit the private markets industry overall.

Diverse-led manager profiles

This year we are pleased to highlight LightBay Capital and Long Ridge Equity Partners as diverse-led firms to watch. HarbourVest has invested with both of these firms over multiple fund cycles because while each brings something very unique to the table, both epitomize the qualities and level of partnership that drive success.

Having recently completed fundraising for only their second fund, LightBay has quickly built an organization that looks beyond profit margins, taking steps to build a firm that has set high standards not only for performance results, but for people and giving back to the communities in which they live and work through its LightBay Foundation. Long Ridge is another example of what we would call a unique and distinctive firm in the private capital space. While the firm has recently completed fundraising for their fifth fund, they have been both measured and intentional in their growth. Launched in 2007 with a diverse leadership structure, the firm has long embraced the notion of an apprenticeship model, creating career paths and promoting from within to retaining talent that adds to their firm’s investment prowess, experience, and performance.

LightBay Founding Partner Nav Rahemtulla and Long Ridge Managing Partner Kevin Bhatt share their views on their very different paths to success, particularly as emerging and diverse managers face the challenges posed by a difficult macroeconomic backdrop.

HarbourVest is proud to play a leadership role in the industry’s future by leveraging our platform and resources to support a more inclusive investment landscape, maintain a robust deal pipeline, and foster connection and collaboration among emerging and diverse managers.

For more information on HarbourVest’s diversity, equity, and inclusion efforts explore our latest DEI report.

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Nav Rahemtulla

Founding Partner

Can you describe LightBay’s commitment to DEI and why it is important,
both in terms of hiring and success?

For us to benefit from differing perspectives, we must be able to not just find diverse talent but also develop diverse talent. In hiring, we know that diversity begets more diversity and we have committed to ensure open searches at LightBay include diverse and underrepresented candidates. In terms of development, we have always prioritized creating an inclusive culture that encourages a growth mindset. We provide specific training in the “softer-skills” of private equity such as public speaking and executive presence along with senior-level mentorship so that all our associates, regardless of their identity, have an equal opportunity to thrive.

When it comes to success, we believe private equity firms can distinguish themselves with a rigorous commitment to excellence in their decision-making processes. Constantly challenging each other’s biases and opinions and soliciting perspectives from individuals of diverse backgrounds improves the quality of our discussions at LightBay.

LightBay is unique in how causes and organizations are provided support through your foundation.
Can you talk about that important work and how that support is funded? 

LightBay’s mission includes a commitment to supporting our companies, colleagues, and communities to reach their full potential. When we founded the firm, we created the LightBay Foundation to align our success directly with the success of our community. A fixed percentage of our management fees and carried interest are contributed to our charitable foundation every year.

Our grant-making foundation’s mandate is to provide access to high-quality education and healthcare to all families as well as to support poverty alleviation through financial support and job training. We support a variety of local, high-impact organizations that are tackling challenges in foster care, inadequate access to mental health, and impediments to social mobility. This year, our women leaders at LightBay are partnering with the organization, Rock The Street, Wall Street, to teach and mentor young women to explore the possibilities of an investment career at the first all-girls public STEM school in California. Later this year, our entire firm will volunteer with HabitatLA during our “Day of Giving,” in East LA to help build playhouses for younger children.

What is the one thing you would advise an investor to do to increase their exposure to diverse-led firms? 

The first step to increasing allocation to diverse-led firms is to get to know more of them. This year, both GPs and LPs alike are extraordinarily selective where they invest capital and therefore expanding the funnel of potential managers should be the starting point.

Investors can attend the various investment and asset management conferences that cater to women and underrepresented investors. Organizations such as WITH, KAYO, Synergist Network, AAAIM (Association of Asian American Investment Managers), and BWAM (Black Women Asset Managers) can be great resources to identify talent. Likewise, attending general asset management conferences can also provide opportunities to connect with diverse investors during specific DEI/Women breakout sessions and panels.

Kevin Bhatt

Managing Partner

Can you describe Long Ridge’s commitment to DEI and why it is important,
both in terms of hiring and success? 

Since the earliest days of our firm, Long Ridge has recognized that building a successful team that resonates with an increasingly diverse set of founders and investors would require a proactive approach to recruiting, training, and developing team members from a range of backgrounds and profiles. Over the last 15 years, we’ve seen first-hand how the diversity of our team has been a source of differentiation as we seek to secure investment opportunities in a competitive private equity market. Our commitment to providing a platform where a diverse group of talented team members can develop and perform to the best of their ability has made Long Ridge a destination employer.

At the portfolio company level, we’ve worked to build management teams and boards that are reflective of the diverse group of internal and external stakeholders at our companies. This effort has delivered value in reducing voluntary churn and increasing employee engagement, both of which drive enterprise value growth in the long term.

How has the partnership between HarbourVest and Long Ridge helped drive success for both firms?  

HarbourVest has been an incredibly valuable partner to Long Ridge. Since the beginning of our relationship, HarbourVest has actively shared best practices regarding LP reporting, fund structuring, and DEI initiatives, in addition to providing advice on a range of pressing questions on a more ad-hoc basis. The relationship has been highly aligned and collaborative, and has helped accelerate and professionalize our firm.  

What are a few of the biggest challenges you faced in building Long Ridge during its earlier vintages? What do you know now that you wish you knew at your launch? 

One of the biggest challenges we faced in the very early days of our firm was around clearly conveying the value that a Long Ridge partnership could deliver to founders and their stakeholders. Ultimately, the first several deals in Fund I were won through a significant investment of face-to-face time and development of relationships based on trust, respect, and shared incentives. While we continue to prioritize that personal touch, we are fortunate to now have a strong roster of current and former founders who are thrilled to share first-hand how Long Ridge has helped to transform, professionalize, and accelerate their businesses.

One other challenge we faced early on was driven by our decision to hire only at the junior levels of our firm, prioritizing internally-developed talent over senior lateral hires. While it would have been expedient to bulk up our leadership ranks in Fund I and II with outside talent, we felt strongly that shared culture, values, and perspectives would be critical to building a cohesive and effective firm for the long term. Today, we are thrilled to have a consistent and cohesive internally-grown team where all of our Partners, Principals, and Vice Presidents originally joined Long Ridge at the most junior levels of the firm.

Continuation solutions encompass a host of transaction types in which a GP secures interim liquidity and/or additional primary capital for their LPs in a strongly performing asset, or set of assets, that the GP will continue to own and control. Specifically, they include continuation funds, new funds created by GPs for the purpose of acquiring the asset(s) that continue to be managed by the same GP and capitalized by one or several secondary buyers, or equity recapitalizations involving a direct equity or structured equity investment into a portfolio company. These transactions can also include a parallel investment from the GP’s latest fund into that same pool of assets (a “cross-fund trade”).