GIP’s Ogunlesi: Systemic racism is not a ‘thing of the past’

Recent police killings of African Americans are forcing a national reckoning over how minorities are treated in all parts of society – including in private markets, says the firm’s founder.

“How can somebody behave so inhumanely to another human being?”

GIP’s founder stresses need to create economic opportunities for African Americans.

Adebayo Ogunlesi, founder of the $74 billion investment firm Global Infrastructure Partners, says it’s been hard for him to grasp recent police killings of African Americans, including George Floyd, who in late May was suffocated by a white police officer in Minneapolis using his knee as a chokehold for almost nine minutes.

Born in Nigeria, Ogunlesi, who moved to the US more than 40 years ago, tells Infrastructure Investor that he is “saddened” and “appalled” by these recent acts of racial injustice.

“For 400 years, African Americans have been the victims of discrimination in this country,” Ogunlesi says. “Recent events simply have brought to the foreground things that everybody, consciously or subconsciously, knew was in the background.”

He is also disappointed by politicians’ response. “It seems as if the political leadership is determined not to play a role in moving this forward,” he says.

Need for ‘an even more diverse workplace’

Ogunlesi holds a unique position in the private markets community. Prior to founding GIP, he became the first non-American to serve as a Supreme Court clerk, for Thurgood Marshall, the Court’s first African American justice. Since launching GIP in 2006, he has built one of the largest infrastructure managers in the industry.

In 2017, he joined President Trump’s Strategic and Policy Forum, a short-lived White House economic advisory group whose members included BlackRock’s Larry Fink and Stephen Schwarzman of Blackstone.

As a black man in charge of a private equity firm, he is part of a minority, given that African Americans hold only 2 percent of executive-level and 7 percent of director-level positions in the financial services industry, according to data from the US Equal Employment Opportunity Commission.

Diverse-owned firms have struggled to win market share in the private investing arena and account for less than 4 percent of all US private equity firms, findings show in a report published last year by Bella Research Group and Harvard Business School.

Ogunlesi says this is one example of broader systemic disadvantages ethnic minorities face in the US which needs addressing.

“Recent events simply have brought to the foreground things that everybody, consciously or subconsciously, knew was in the background.”

“What we have to do is look for ways of creating economic opportunities specifically for African Americans,” he says, highlighting a programme GIP supports called Engineering Tomorrow. GIP works with the non-profit to set up mentorship-type relationships between people from the firm and minority and female youth interested in engineering and science careers.

Many existing firms are also facing more demands from their investors and stakeholders to hire diverse staff. At GIP, for example, 14 of 22 partners listed on the firm’s website are white males, six are people of diverse ethnic background and two are women.

Ogunlesi acknowledges that hiring more diverse finance professionals is something GIP must improve on.

“We are looking at ourselves internally to make sure we do a better job creating an even more diverse workplace,” he explains.

Hoping ‘this time will be different’

Despite racial tensions, Ogunlesi says “it is good that this reality has come out as powerfully as it has”.

“There is a segment of the US population that says systemic racism and economic disadvantage for African Americans is a thing of the past,” he remarks. “It’s clear that this is certainly not the case.”

For example, Ogunlesi points to the “disproportionate” impact – both in terms of the death rate and economic fallout – covid-19 is having on minority communities.

Across the US, African American deaths from covid-19 are nearly double what would be expected based on their share of the population, according to data collected by COVID Racial Tracker, a joint initiative between the COVID Tracker Project and the Antiracist Research and Policy Center.

Black-owned businesses also seem to have been hit harder by the pandemic than white-owned businesses. Research compiled by the University of California at Santa Cruz shows that, between February and mid-April, 41 percent of black business owners were forced to close for good, compared to 17 percent of white-owned businesses.

“Businesses that are more likely than not to not recover are African American-owned,” Ogunlesi notes. “This is really about economic disadvantage.”

Still, Ogunlesi says he has been encouraged by the outreach and statements of support he has received over the past few weeks from other senior business leaders.

He’s also found hope in the “groundswell” of activism in “just about every community in the country”.

“It gives the hope that this time will be different.”

Photo by Paolo Risser.