Impact investing platform Lafayette Square launches with USD100m financing from Morgan Stanley
Damien Dwin, a Black American businessman, philanthropist and veteran investor, has launched Lafayette Square Holding Company (Lafayette Square), an impact-driven, minority owned investment platform.
The firm's aim is to 'confront critical societal challenges with capital and services in three core areas: housing, jobs, and financial inclusion'. Morgan Stanley has provided USD100 million of financing to launch Lafayette Square, which is minority owned with employees owning over 90 per cent of its equity. In addition to employees, other equity holders include the Capricorn Investment Group’s Sustainable Investors Fund and Schusterman Family Investments, both of whom will maintain seats on Lafayette Square’s fiduciary Board of Directors.
“The history of finance is one in which far too many individuals, businesses and communities – especially women and persons of colour – have been denied access to capital, resources and opportunity. The economic fallout of Covid-19 and the social justice movement of 2020 have reinforced the inadequacies of the traditional financial paradigm and made a powerful case for a new, more inclusive investment model,” says Dwin. “We are pleased to have the confidence of our peers at Morgan Stanley, Capricorn Investment Group, and Schusterman Family Investments, in building a model to change the current financial paradigm to a new one, where inclusion finds opportunity, access finds wealth, and transparency finds finance. We look forward to investing within communities that have been traditionally neglected by fiscal and monetary policy, not only to drive short-term recovery but also to achieve real, measurable change for decades to come.”
Lafayette Square’s mission is to become the premier provider of impact-driven, services-backed capital. The firm is confronting critical societal challenges with targeted investment strategies that drive measurable change and positive social impact in areas of housing, jobs, and financial inclusion:
• Housing: Lafayette Square creates and preserves affordable housing and provides impactful services that improve the lives of residents and enhance the properties.
• Jobs: Lafayette Square invests in independent small and medium size businesses and entrepreneurs, with a focus on regional and localized job creation, providing targeted services to portfolio companies and employees.
• Financial Inclusion: Lafayette Square makes seed and stake investments in diverse investment managers and provides services to help them scale, bolstering long-term participation and inclusion of talented women and people of color in finance.
“Morgan Stanley is proud to partner with Damien and the Lafayette Square team to address critical societal challenges with thoughtful and scalable investment solutions. We are committed to supporting inclusion and diversity in underserved communities, and we have strong conviction in Lafayette Square’s innovative approach to enact meaningful change,” says Thomas R Nides, Vice Chairman of Morgan Stanley.
Dwin is an industry veteran with 23 years of investment experience and a committed philanthropist. He currently serves as Chair of the Board of Trustees for Vera Institute of Justice, in addition to multiple non-profit boards across New York City, Washington DC, and Philadelphia. Prior to founding Lafayette Square, Dwin served as Co-Founder and Co-CEO of Brightwood Capital Advisors, LLC from 2010 to October 2020. Before that, he was the Head of North American Special Opportunities at Credit Suisse and a trader at Goldman Sachs, where he earned the Michael P Mortara Award for Innovation. He began his finance career at Salomon Brothers and received a BS/BA from Georgetown University where he later served two terms on the Board of Regents.
Dwin launches Lafayette Square with a seasoned team of 17 professionals with an average 15 years of experience in financial services. The team includes Chief Risk Officer Phil Daniele, Chief of Staff Doug Ebanks, Head of Investor Relations Caitlin Mixter, Managing Director Ryan Ochs, Managing Director Joe Johnson, Director Casey Woo, and Vice President Mary Ann Raftery. The firm expects to grow to approximately 65 employees by 2022.
Darren Walker, President of the Ford Foundation, who has closely followed the formation of Lafayette Square, says: “People make the difference; capital makes change possible; and Lafayette Square connects the two. Their new model combines the best facets of capitalism and humanitarianism to enable real change in communities trapped in cycles of poverty and to promote diversity among future generations of financial leaders.”
“We’re excited to support Damien in his vision to launch a new type of firm that will act as a model across finance,” says Stacy Schusterman, Chair of Schusterman Family Investments and Chair of the Charles and Lynn Schusterman Family Foundation. “We have strong conviction in Lafayette’s sustainable investment approach that aligns with our philanthropic efforts to strengthen communities and advance social equity in a dignified manner.”
“The Lafayette Square model takes a distinct approach in leveraging market forces to solve real problems in our country such as minority participation in finance and advancing racial equality,” adds Ion Yadigaroglu, Managing Partner of Capricorn Investment Group, whose approach to impact-driven investment is aligned with Lafayette Square. “We strongly believe that the world’s greatest challenges require investment innovation and sustainability, and Damien and his team have found that within the areas of housing, jobs, and financial inclusion.”