A new fund focused on teaching students how to invest has chosen Atlanta for its latest expansion.
The University Growth Fund allows university students to manage an investment portfolio to create a pathway into private equity and venture capital. Sponsored by financial technology company Ally Financial Inc. (NYSE: ALLY), it is gearing up to close its second, $50 million fund, which will be managed by the students and supervised by a management team. The first fund was $32 million.
Its portfolio companies are technology startups, including short-term rental giant Airbnb and genetics testing 23andMe. It invests nationwide across different tech sectors and startup stages, which gives students an overview of the lifespan of a company. It also has offices in San Diego and Salt Lake City.
University Growth Fund founding partner Peter Harris said the city’s diverse student talent pool and the Atlanta University Center, the nation’s largest consortium of historically Black colleges and universities, attracted the fund.
"We thought it would be a remarkable place to bring in more Black and Brown students and give them the skills and experience necessary to compete for these jobs and change the face of venture capital,” Harris said.
Two percent of venture capital leaders in the U.S. are Black, according to the Founder Institute. Out of the $150 billion in venture capital invested in 2020, 1% when to Black startup founders, according to Crunchbase. The diverse talent pool in Atlanta fuels the city’s growth as a technology hub. It lured tech giants Microsoft and Airbnb into the city, and entrepreneurs consistently cite diversity as a hiring advantage.
Ally is the lead investor in the first and second funds and provides scholarships and grants to the program. The Atlanta expansion reflects Ally’s commitment in February to provide $1.3 million to Black students pursuing career paths related to financial services.
The University Growth Fund’s unpaid program is open to all Atlanta-area students with an emphasis on the AUC, Harris said. About 40 students across the three offices complete the year-and-a-half program together. The inaugural Atlanta class includes two AUC students, one Georgia Tech, one Georgia State University and one from Georgia Gwinnett College. The office is located downtown near Georgia State’s campus.
Harris says the students have a good eye for new consumer technologies and gravitate toward companies with strong environmental, social and governance lenses.
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