DEI hits a wall

Diversity efforts slow within private equity


Happy Friday. Here’s what we’ve got today…

  • A look at the state of DEI in private markets

  • The deal sheet, plus a secondary market fire sale


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Study shows DEI campaigns losing traction with some firms—a momentary hiccup or start of a trend?

By Bob Clair

Despite progress made on diversity, equity, and inclusion (DEI) efforts in recent years, a new study from Honordex, Equality Group’s external DEI data measurement framework, found that such campaigns are losing traction within private equity’s largest firms.

The report analyzed nearly 300 firms with over $1 billion in assets under management and found that, while the average DEI score has increased this year, progress has stagnated at the higher end of the rankings. At an industry level, private equity remains unchanged at a ‘DEI Intermediate’ score.

“There was a huge wave of DEI commitments made by PE and VC firms and their portfolio companies following the BLM protests of 2020, with the US as the focal point of this movement,” says Anikka Villegas, Pitchbook Senior Analyst of Fund Strategies and Sustainable Investing.

Then, the U.S. Supreme Court’s June 2023 ruling against race-conscious affirmative action university admissions sparked concern over the possibility of broader anti-DEI litigation.

“While the Supreme Court decision doesn’t apply directly to private employers, we know that many private market participants have revised their DE&I programs in hopes of avoiding future litigation, which is a trend that is likely to persist,” Villegas adds.

“Still, this doesn’t mean that DE&I is ‘out,’” she clarifies, “just that the way it is being practiced will likely look different in the coming years.”

In all, 283 firms participated in the Honordex study and 117 earned an “intermediate” score, indicating the firm has taken some positive actions on DEI but has more work to do, according to grading criteria.

While 56 percent of firms—158 in all—received a ‘beginner’ score, as an industry, private equity is further ahead than venture capital peers, who have yet to progress past the ‘beginner’ threshold.

Beyond alternative investment firms, a similar trend is playing out across broader corporate America, where the number of companies with DEI programs has dropped 33 percent since 2020, according to Ayesha White, founder of Elevator, an organization dedicated to helping women of color in the workplace.

Even so, McKinsey partner Alexandra Nee provides a counterpoint: at least within private equity and venture capital, successful DEI initiatives may be related to stronger investment performance and returns.

“Data shows correlation between more diverse management teams and financial performance,” Nee said. She added that while some LPs are using DEI benchmarks as part of their allocation decisions, making GPs ineligible if they fail to meet certain criteria, other LPs are now doing the opposite—not investing in firms that have DEI campaigns.

Nee notes that, in either case, because of the fiduciary duty to stakeholders, LPs remain most concerned with a firm’s track record and expected returns.

On all sides, many have called for standardization of data tracked by DEI campaigns to remove subjectivity from the analysis. Proponents of DEI also concede that private equity and venture capital adopters should not expect it to be a turnkey or one-and-done solution.

As DEI faces its largest threat to date, observers will be watching closely over the next 12 months for signs that this is either a temporary setback or something more existential.


Alphabet, the parent company of Google, is weighing a takeover bid for HubSpot (NYSE: HUBS), a provider of customer relationship management software trading at a market value above $33 billion.

Johnson & Johnson (NYSE: JNJ) agreed to acquire Shockwave Medical, a medical device manufacturer that produces devices utilizing sound pressure waves to break up calcium deposits in coronary arteries, for around $13.1 billion.

Carlyle is preparing to sell StandardAero, a provider of maintenance, repair, and overhaul services for aircraft engines and components that could be worth around $10 billion.

Skydance Media has been granted exclusivity in talks to acquire Paramount, which had previously rejected an Apollo bid.

BlackRock and KKR agreed to sell their entire 40 percent stake in Abu Dhabi National Oil Company's (ADNOC) oil pipeline infrastructure to Abu Dhabi-based firm Lunate for around $4 billion.

L'Oreal is considering a minority investment in Amouage, an Oman-based luxury perfume brand, at a valuation above €3 billion, per Bloomberg.

Summit Partners is preparing to sell Dr. Squatch, a men's grooming brand that could be worth more than $2 billion, with Raymond James and Centerview Partners engaged as advisors.

Advent International kicked off talks to sell its entire stake in Bharat Serums and Vaccines, a developer and manufacturer of biological and pharmaceutical products, at a valuation between $1-2 billion.

Saint-Gobain has agreed to acquire Bailey Group of Companies, a producer of various industrial metals products, for C$880 million.

Mitsui & Co. and Rohto Pharmaceutical Co. have agreed to acquire an 86 percent stake in Eu Yan Sang International Ltd., a traditional Chinese medicine provider with over 170 retail outlets across Asia, for around $594 million.

Valesco invested in American Bedding Manufacturers, a provider of mattresses and bed frames.

Clario, a provider of healthcare decision support tools, acquired ArtiQ, a Belgium-based startup specializing in AI algorithms for lung function interpretation.

DataStax acquired Logspace, a start-up that developed Langflow, an open-source visual framework for creating retrieval augmented generation applications.

EuroLeague, the premier men's professional basketball league in Europe, is exploring the sale of a minority stake, with LionTree hired to advise.

EV Realty formed a $200 million joint venture with GreenPoint Partners to acquire semi-truck parking and trailer storage locations across the United States.

Once For All, a GTCR portfolio company, agreed to acquire Nalanda Global, a Spain-based supplier of risk and compliance management software owned by PSG Equity.

TPG has agreed to acquire Classic Collision, a collision repair services provider, from New Mountain Capital.

Henkel AG agreed to acquire Seal For Life Industries, a protective coating and sealing solutions provider, from Arsenal Capital Partners.

ServiceTitan, a software platform for the trades, has agreed to acquire Convex, a sales and marketing platform for the commercial services industry.


Tech, Vertical SaaS, & Misc. Enterprise

Pigment, a developer of business forecasting tools, raised $145 million in Series D funding led by ICONIQ Growth, with participation from Sandberg Bernthal Venture Partners, and existing investors IVP, Meritech, Greenoaks, and Felix Capital.

Aerospike, a developer of data infrastructure for real-time AI, raised $109 million at a $1.2 billion valuation from Sumeru Equity Partners and Alsop Louie Partners.

SiMa AI, a developer of machine-learning chips for large-scale data centers, raised $70 million in additional funding led by Maverick Capital, with participation from Point72 and Jericho.

Coalesce, a San Francisco-based data transformation startup, raised $50 million in Series B funding led by Industry Ventures and Emergence Capital, with participation from 11.2 Capital, DNX Ventures, GreatPoint Ventures, Hyperlink Ventures, Next Legacy Partners, Snowflake Ventures, and Telstra Ventures.

Fluid Topics, a content delivery platform for product information, raised €15 million in Series B funding. Kennet Partners led, with participation from Ventech and Credit Mutuel Innovation.

Greenfly, a sports content management platform, raised $14 million in new funding led by ADvantage, with participation from Mercato Partners, Ryan Sports Ventures, the NBA, Verance Capital, Iconica Partners, Alpha Edison, and Elysian Park Ventures.

Iceberg Data Lab, a climate and biodiversity data and analytics software development company for financial institutions, raised $10 million in Series A funding from Beringea.


Brim Financial, a fintech infrastructure company providing open banking solutions, raised $85 million in Series C funding led by Export Development Canada, with participation from Vistara Growth, White Owl, Epic Ventures, and Zions Bank.

Electronica Finance, a provider of debt financing to Indian MSMEs, raised $48 million in Series B funding from LeapFrog Investments, Aavishkaar Capital, and Encourage Capital.

Agora, a developer of a dollar-pegged stablecoin, raised $12 million of seed funding led by Dragonfly, with participation from Robot Ventures, Wintermute, Breed, and General Catalyst.

Media & Consumer

Warwick Acoustics, a developer of electrostatic automotive audio technology, raised £7 million led by Mercia Ventures, with participation from NFU Mutual and a range of private investors.

Home From College, a career solution platform for young professionals, raised $5.4 million in seed funding led by GV.


Biolinq, a healthtech company developing a metabolic biosensor platform, raised $58 million in Series D funding. The round was led by Alpha Wave Ventures, with participation from Niterra, RiverVest, AXA IM Alts, Global Health Investment Corporation, Aphelion, Senvest, Features Capital, and Taisho.

Manifold, an AI-powered clinical research platform, raised $15 million in Series A funding. TQ Ventures led, with participation from Calibrate Ventures, SK Ventures, TTCER Partners, and Dr. Sachin H. Jain.

Nucleai, an AI-powered spatial biology company focused on precision cancer treatments, raised $14 million. M Ventures led the round, with participation from returning backers Section 32, Sanofi Ventures, Debiopharm, Fosun RZ Capital, Vertex, and Grove.

HealthArc, a provider of virtual care management solutions, raised $5 million in new funding led by ScOp Venture Capital, with participation from Original Capital, Dream Capital, and Correlation Ventures.

Industrials, Greentech, & Other

Ion Clean Energy, a developer of CO2 capture technology, raised $45 million from Chevron New Energies and Carbon Direct Capital.


Thoma Bravo is targeting $20 billion for its latest buyout fund, along with a separate $7 billion raise for a new middle market fund.

SK Capital Partners raised $2.95 billion for its sixth fund.

Paradigm is raising up to $850 million for its latest venture fund.

Clarion Capital Partners raised $677 million for its fourth middle market buyout fund.

Mavik Capital Management is raising $515 million for a new middle market commercial real estate fund.

Bitkraft Ventures raised $275 million for a new gaming-focused venture fund.

Maniv raised $140 million for its third venture fund.

62 Ventures raised $100 million for its debut healthtech venture fund.

Tamarack Global is raising $100 million for a new technology-focused venture fund.


1. Private equity stakes unloaded at a discount as investors seek exits.

• Pensions and endowments turn to secondary market to cut exposure and raise needed cash. — Financial Times


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