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Impact investor Illumen Capital closes $168M vehicle

Illumen Capital, a fund-of-funds focused on racial and gender diversity in investing, has closed its second fund on $168 million.

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Illumen Capital, a fund-of-funds focused on racial and gender diversity in investing, has closed its second fund on $168 million, led by the Ford and WK Kellogg foundations along with more than 100 other investors.

The firm’s second fund was oversubscribed, passing its initial target by around $20 million and nearly doubling the fundraising of its $88 million predecessor. Illumen Capital invests in venture, growth and PE funds with a focus on racial and gender equity in its investments. This fund family invests across education, health and wellness, climate and sustainability, and financial inclusion.

“Each of these areas represent massive markets that are undergoing increasing disruption and volatility. We know from our research that this increase in volatility and disruption leads to many retreating to their biases,” said Daryn Dodson, managing partner and CEO at Illumen Capital.



The firm helps fund managers implement strategies to reduce racial and gender bias in hiring, investments, and company operations, in partnership with Stanford SPARQ, a behavioral science think tank at Stanford University.

In 2019, Illumen Capital conducted joint research with the university to evaluate the biases of 180 asset allocators and found evidence of racial bias in their investment decisions. The coalition asked respondents to rate VCs based on their evaluations of a one-page summary of a fund’s performance history, which included information about the race of the managing partner and the strength of the fund’s credentials.

When presented with VC firms that have strong credentials, allocators tended to favor white-led, less-diverse teams. When evaluating management teams with weaker credentials, allocators favored Black-led, diverse GPs. Even then, the study found that allocators still didn’t express a high likelihood of investing in those teams.

“The basics of financial analysis often get interrupted when race or gender is present,” Dodson said.


Impact investing has grown in popularity over the past few decades. Total impact fund AUM has increased steadily since 2007, reaching a record $322.2 billion in 2022, according to PitchBook data.

Impact fundraising also hit a record in 2022 with more than $54.1 billion raised as of Sept. 30, despite being on track for a year-over-year decline in fund count. Three massive infrastructure funds from Brookfield Asset Management, Ullico Investment Advisors and Copenhagen Infrastructure Partners accounted for $22 billion of that total—around 40%.

“Illumen Capital’s evidence-backed approach to help fund managers optimize their performance is much needed, and this round of funding signals that the strategy is working,” said Roy Swan, the Ford Foundation’s director of mission investments, in a statement.

Correction: A previous version of this article said Illumen Capital surpassed its initial target by $50 million. Illumen Capital’s Fund II passed its initial target by $20 million. (May 24, 2023).

Featured image by Ruslan Grumble/Shutterstock

  • jessica-hamlin-headshot.jpg
    Written by Jessica Hamlin
    Senior reporter Jessica Hamlin writes about limited partners for PitchBook News, based in New York. Jessica is also the lead writer of the Capital Pool weekly newsletter. Previously she wrote about private equity for Institutional Investor in New York. Jessica is a graduate of the Grady College of Journalism and Mass Communication at the University of Georgia.
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