When Ras Baraka announced the formation of the NJ FAM Fund back in September, it came with a symbolic name — FAM stands for “40 Acres and a Mule” — and a hope that it could raise $100 million to serve as a private investment vehicle to help reduce social and economic disparities in Newark by investing in Black and Latinx businesses.
A few months later, the fund is operating in eight New Jersey cities and is quickly approaching $10 million — thanks in part to a “substantial” commitment from Bank of America that came this week.
Alberto Garofalo, president of Bank of America New Jersey, said the bank was thrilled to include the NJ FAM Fund among its many initiatives to help drive economic growth in underserved communities that too often were left behind in the past.
“A strong and vibrant business community benefits everyone,” Garafolo said. “Our equity investment in NJ FAM is intended to deploy capital to Black, Hispanic-Latino, other under-represented minority and women-led entrepreneurs so they can grow, expand job opportunities and make a positive impact in their community.”
The NJ FAM Fund is a first-of-its-kind private investment vehicle focused on making equity and debt investments in Black and Latinx businesses located or doing business within the state of New Jersey, and transforming real estate projects within the state’s Black and Latinx communities.
The fund puts capital directly in the hands of New Jersey’s Black and Latinx business owners, who traditionally suffer from the greatest barriers to accessing capital and other resources.
The fund, which will operate as a private investment vehicle with assistance from broad public support, will raise capital through both charitable contributions and investments from financial institutions and corporate partners.
It was created with assistance from Nelson Mullins, one of the nation’s leading law firms in private equity fund formation, policy and legislative advocacy. Additional funding commitments have come from companies and celebrities such as New Jersey Community Capital, AT&T, Panasonic, RWJBarnabas Health and Shaquille O’Neal.
Bank of America’s commitment marks the first private equity investment from a Fortune 500 financial institution.
Bernel Hall, the CEO at Invest Newark who serves as the managing partner of the fund, said more are in the works.
“We are grateful to Bank of America for their private equity investment into the New Jersey 40 Acres and a Mule Fund,” he said. “Since launching the fund in September 2020, we have received tremendous interest from institutional investors and philanthropic organizations from across the country.
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“What started as a pilot program has quickly evolved into a multimillion-dollar investment vehicle that will provide liquidity to underserved communities and double bottom-line investment opportunities to the country’s top social impact investors.”
The fund’s reach is growing.
Interest in the initiative was immediate, leading to a rapid expansion. The fund now works in eight cities across the state: Atlantic City, Camden, East Orange, Irvington, Newark, Orange, Paterson and Trenton.
Baraka said the city of Newark, which has contributed $2 million to the fund, knows the need is there.
“The NJ FAM Fund will help cities like Newark and other municipalities navigate the challenges caused by the racial wealth gap, and we are incredibly grateful for Bank of America’s generous support,” he said.
“The growth of the NJ FAM Fund and participation from forward-thinking global investors like Bank of America is a testament to our well-timed focus on meeting the needs of New Jersey businesses that have been underserved far too long,” he said. “We look forward to expanding this initiative as more partners join our efforts.”