Starwood Capital Group, a giant private real estate investment firm, has launched an impact investment strategy to channel capital towards diverse and women-owned real estate managers. Starwood Impact Investors will invest through “joint ventures with established firms and direct investments in emerging companies”, the firm said in a statement on Wednesday. It will be a “returns-driven strategy”, it noted, without giving more details.
Capital for the strategy will come from the firm’s existing investment vehicles and it will be led by managing director Bakari Adams, who joined Starwood in August last year having been director of ESG at another private equity real estate firm, Interstate Equities Corporation.
Starwood is the world’s third-largest manager of private real estate capital, according to affiliate title PERE‘s most recent ranking.
Diversity, equity and inclusion has graduated from being a talking point to an action point in private markets: 95 percent of real estate organisations have some sort of programme – either informal or formal – to improve DE&I, according to a recent survey conducted by seven industry bodies and Ferguson Partners launched in December.
The upper echelons of real estate investment management, however, remain less diverse – 77 percent of people in “executive management” positions (C-suite or similar roles) are male; 82 percent are white, the survey said (although it is worth noting that both of these figures have fallen marginally since the 2021 edition of the survey).
“The underrepresentation of women and diverse-owned real estate firms in the market is a significant issue,” said Starwood Capital president Jeff Dishner in a statement. “We believe that expanding the spectrum of representation will uncover valuable investment opportunities that may have gone unnoticed before.”
News of Starwood’s diversity-focused impact strategy comes just weeks after TPG, another heavyweight private markets firm, raised $500 million for its first diverse manager-seeding platform, TPG NEXT.