Fresh out of graduate school in 1980 as a newly-minted economist, I entered the financial services industry assuming that the “capital markets” functioned with an almost clinical, rational efficiency: directing capital towards productive agents and high-quality ideas that offered compelling data supportive of their being able to generate the highest returns, and conversely, steering clear of those that did not. Some years later, having by that time apprenticed at a venture capital firm and spent over a decade in that field, it dawned on me that the eponymous “capital markets” are – in fact – “people”; thousands of people working in the investment offices of public and corporate pension funds, sovereign wealth funds, banks, insurance companies, government-owned entities, foundations, endowments and wealthy family offices, making decisions with respect to where and with whom to entrust the stewardship of some of their particular institution’s financial capital; many of whom were, and remain, reluctant to commit investment capital to a more diverse opportunity set of investment managers and entrepreneurs.
Taken in isolation, the effects of any one institution’s investment decisions on broader societal issues having to do with racial equity are de minimis, if not inconsequential. However, taken cumulatively, historically, the combined effects of decisions made across the institutional investor corpus have served to skew the allocation of investment capital away from available qualified, talented, diverse investment professionals capable of investing such capital responsibly, across a broader landscape of people and investment opportunities, with devastating consequences for black and brown communities throughout our country.
As COVID-19 has recently exposed, the combined effects of this skewed allocation of investment capital, this cumulative economic red-lining, results in a degree of systemic inequality across black and brown communities with respect to access to adequate housing, quality education, sustainable employment opportunities, healthy food, clean air and water, and healthcare services that in the present pandemic, has led to such communities bearing a disproportionate amount of the pain and deaths caused by this horrible disease. And if this were not enough, once again such communities have borne recent witness to the all too familiar public murder of a defenseless black man, an American citizen, in a manner so casual, so absolutely matter of fact, as to communicate in ways that mere words never could, the utter disregard for black life exhibited by an officer of the law, sworn to protect and serve.
The ensuing cycle of rage and civil disorder are, unfortunately, predictable; we have been here before. The question is, will our response to these long in the making systemic inequities be any different this time? Will our corporate, government, civic and philanthropic leaders have the will to engage in more than the appearance of systemic change?
Almost twenty-six years ago, my fellow co-founder JoAnn Price and I embarked on what was thought by some to be a quixotic journey to change the face of the private capital markets by increasing access to institutional investment capital for a more diverse opportunity set of talented, capable investment managers and entrepreneurs. We resolved at our core that we would always treat others as we would like them to treat us. We chose a name for our new firm that we believed would continuously announce both our intention and our commitment that, within our doors, at our table, men and women of demonstrated talent, experience and ability seeking private capital to support a compelling investment thesis would always be given a “Fair View”, as we sought to answer the question at the core of our firm’s reason for being: are you capable of investing our capital in productive, profitable ways that will produce exceptional returns for our investors?
The mission that informed our beginning remains central to who we are as a firm, and we believe that what we do and how we do it remain important if we are to achieve the more just, fair, equitable America that we believe offers the only real solution to breaking the interminable cycles of rage, despair and hopelessness that define reality for far too many of our fellow citizens.
Laurence C. Morse, Ph.D.
Co-Founder and Managing Partner
Fairview Capital Partners, Inc.
The video below features Larry in a conversation with Senior Advisor Edwin Shirley. Building on his letter, Larry touches on his background, his views on diversity in the capital markets, and the mission he and Co-Founder JoAnn Price set out on when forming Fairview.