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Gay founders of Galileo Capital Management saw that LGBT businesses lacked specialist advice
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World's first LGBT investment fund launched
A specialist corporate advisory and investment management unit that will focus exclusively on the LGBT market has been launched by Galileo Capital Management, a British company founded by two gay men.
Additionally, the new unit, LGBT Capital, is developing a fund that will invest in companies worldwide that provide products and services to the gay community, the first of its kind in the world, the company believes.
Such a development would have been extremely unlikely even a few years ago, given the conservative nature of the corporate banking world, but Galileo's founders, Anders Jacobsen and Paul Thompson, saw an opportunity in the growth in size and influence of the lesbian and gay consumer market.
LGBT Capital's meetings with a significant number of gay business owners and managers revealed that many of their plans failed because of insufficient professional business development advice and access to external investors.
The founders say this is partly due to the degree of secrecy with which many LGBT-orientated companies were originally established, leaving them without the financial support available to others.
"LGBT-orientated business owners often have the desire to expand, but also frequently lack the expertise, correct capital structure or know-how to access funding," Thompson said in a statement.
"We believe there is a significant opportunity to provide the financial expertise typically found within an investment banking context to LGBT companies, which in turn would allow quality companies to secure funding."
Galileo cites the study it commissioned in December, which showed that 80% of companies serving the LGBT community in London believe there is not enough specialist advice on capital-raising, structure and mergers and acquisitions. It also found that potential investors in such companies did not proceed with their investments most of the time, citing inadequate funding and capital structure as the main reason.
Jacobsen and Thompson, who are both gay and plan to donate a portion of their fees to LGBT causes, have more than 40 years combined experience in the investment management sector, including stints at Goldman Sachs, Prudential Financial, Bankers Trust and Chase Manhattan Bank.
