June 8, 2022
The new member participants in the Illinois Venture Capital Association (IVCA) keeps expanding, giving the current membership new opportunities for networking, in addition to offering support and partnerships. This advantage keeps evolving the association and its advocation of Venture Capital, Private Equity and satellite industries. The latest new member is 5th Century Partners (5CP), a purpose-driven Private Equity firm that invests in middle-market companies within healthcare, consumer, and business services that are committed to driving economic value and social impact.
The following is a Q&A profile with 5th Century Partners which explores the firm’s background and their expectations for interacting with the IVCA.
New Member: 5th Century Partners (5CP)
Representatives: Jessica Patton, Principal
IVCA: What is a brief history and background on 5th Century Partners?
5CP: We founded 5th Century Partners in 2021 with the objective of building a next generation, purpose-driven private investment to unlock the growth potential of middle market companies and create long-term value for communities and stakeholders. We closed our debut fund, 5CP Fund I, at the beginning of this year on $144 million and are backed by institutional and strategically aligned partners.
IVCA: Why did the firm decide to join the Illinois Venture Capital Association?
5CP: We were excited to join the Illinois Venture Capital Association based on the strength of the community that it has created for investors and shared value of improving diversity in private investing. We look forward to getting to know the members and finding opportunities to partner.
IVCA: In your mission statement, the term ‘purpose driven’ is emphasized. How does that statement philosophy coincide with your partnership investments with the middle market companies that are your primary focus?
5CP: We invest in middle market companies where our capital, operating expertise and strategic relationships can unlock growth potential. Understanding the benefits of an increasingly diverse landscape is an essential component to every business strategy, and embracing diversity is core to our investment approach. We invest in middle market companies that fit our value creation playbook and tap into diversity as a tool to help improve the performance of these companies.
IVCA: When you approach a new investment partnership, does the firm have a standard blueprint strategy … adjusted of course for each business … or do you create brand new strategies based on the business and their needs at the time of partnership?
5CP: We work with operators to create a bespoke value creation playbook based on the needs of their business. We consistently look to leverage our experiences and strategic relationships to create a plan to add value starting in the early stages of our investment discussions. We place a particular emphasis on people and leadership in our approach and how our operating network can be additive as we believe having the right team is paramount to business success.
IVCA: You have a history in creating bridges for black investors to the tech space, and now as a founder to your PE firm. What still remains as challenges for people of color in the investment space, and how does diversity improve economics across the investment spectrum, in your opinion of expertise?
5CP: People of color and women are still underrepresented in the investment space and although there has been some improvement, we still have a long way to go, especially in Private Equity. Pattern matching and the tendency to find more comfort with people we see as similar to ourselves continues to perpetuate the status quo. To make changes, it is paramount to do the work which means ensuring that candidate pipelines are diverse, changing internal cultures to provide a sense of belonging to diverse employees and advocating for DEI initiatives at senior levels of firms.
I am encouraged by the intentional work I’ve seen from several firms in the wake of George Floyd’s murder. These firms are making a concerted effort to emphasize diversity and equality of opportunity and have made significant strides across their teams and portfolio as a result. I believe that these changes will not only lead to a more diverse investor landscape but a greater return for those involved.
IVCA: As the U.S. still struggles with racial relationships and reckonings in the wake of the last decade, how do you believe the investment community can contribute to our society, to further integrate our melting pot into a more unified whole?
5CP: There are many studies that have demonstrated that embracing diversity in the workplace, whether it be race, gender, national origin, or sexual orientation creates value for the business. We believe that focusing on bringing diverse leadership into leadership positions and on boards of directors is critical to future business success.
We also believe this investment strategy leads to more opportunity for ownership and transformative wealth creation by the employees, communities and other stakeholders, delivering positive impact for people, investors and our society as a whole.
IVCA: What does 5th Century Partners hope to achieve in their interaction with the VC/PE community within the IVCA?
5CP: We look forward to finding opportunities to partner on investments and strategic initiatives, developing strong relationships and being a helpful resource to the VC/PE community within IVCA.