MBE Certification Program
Overview
The National Association of Investment Companies (NAIC), the largest network of diverse-owned alternative investment firms, announces the launch of the NAIC Minority Business Enterprise Certification (MBEC) Program. Open to NAIC member firms and the more than 2,000 companies within their collective portfolios, the initiative allows well-capitalized, diverse-owned businesses to partner with large corporations seeking scalable, diverse suppliers to bolster their supply chain.
NAIC has championed diversity, equity, and inclusion in the alternative investments industry. The organization actively supports the utilization of diverse asset managers and diverse suppliers by corporations in this country and beyond. The NAIC MBEC program is specifically designed to empower NAIC member investment management firms and their portfolio companies to participate in corporate supplier diversity and other diversity related programs.
NAIC requires MBEC applicants to demonstrate their ongoing commitment to building economic equity and access to minority, underserved, and underrepresented people; both within the company and in the communities in which they operate.
Corporations can further diversify their supplier base with well-capitalized and scalable NAIC MBE-certified businesses. These MBEC firms are excellent partners in pursuing corporate ESG due to the integrity of the ownership and community impact validated through an objective certification process.
Who Should Apply
NAIC Member firms in good standing and their portfolio companies, where the member firm has taken a majority ownership position in the company.
Why Apply
By becoming MBE-certified, private investment firms and their portfolio companies are eligible to participate in corporate supplier diversity mandates that require minority business enterprise certification.
Certification Requirements
To be eligible for certification under the MBEC program, the NAIC member firm must be certified first and meet the following primary criteria:
- A copy of the Management Company agreement.
- A letter from external counsel attesting to the veracity of the management company agreement.
- A notarized letter from the managing partner stating the race/ethnicity/gender and place of birth of the partners/owners.
Once the NAIC member firm is certified, their portfolio companies can apply for certification if they meet the following criteria:
- Demonstrate at least 33% ethnic- or gender-diverse ownership.
- Have no less than 51% ownership by a diverse-certified Member Firm with the ability to control the day-to-day operations and/or management of the portfolio company applying for certification.
- Have a measurable and sustainable community impact plan that targets underserved communities, showcasing its commitment to making a positive impact in the community.
For More Information and FAQs
NAIC Member Firms and Portfolio Companies
Position your company to access procurement opportunities from Fortune 500 corporations that are looking to grow their spend with MBE-certified companies.
Corporations
Access well-capitalized MBEs that are well-positioned to support your commitment to uplifting underserved communities.
NAIC Member Firms and Portfolio Companies
Get access to opportunities from Fortune 500 corporations and other businesses that are looking to diversify their supplier base by partnering with MBE-certified companies.
Frequently Asked Questions
Q: What is supplier diversity?
A: Supplier diversity is a business strategy of incorporating diverse-owned businesses, suppliers, and vendors into acompany’s supply chain and business practices.
Q: Who can apply for NAIC’s MBE Certification?
A: NAIC member alternative investment firms and their portfolio companies. All portfolio company applicants must be affiliated with an NAIC member firm.
Q: Why should I apply for NAIC MBE Certification?
A: This is the only certification process that validates diverse ownership of portfolio companies. It allows NAIC MBE-certified portfolio companies to participate in the billions of dollars of unmet demand in corporate supplier diversity programs.
Q: Can a Management Company certify its portfolio companies first?
A: No. A Management Company must be NAIC-certified before its portfolio companies are eligible to apply for NAIC MBE certification.
Q: What are the requirements for a Management Company to be eligible for NAIC MBE certification?
A: The Management Company must be a member in good standing with the NAIC. NAIC member firms may apply for certification just for themselves. To certify a portfolio company, they must own a majority stake in their portfolio companies because majority ownership/control of the portfolio company is required for certification.
Q: How long does certification take?
A: NAIC targets a two-week window from receipt of all required documents for NAIC member firms. Because additional information is required for the portfolio companies to be certified, there is a target window of thirty days from receipt of all materials required for certification.
Q: How long does the certification remain in effect?
A: Certification remains in effect for three years.
Q: Can a portfolio company apply directly for NAIC certification?
A: Only portfolio companies of MBE-certified NAIC member investment management firms are eligible to apply for NAIC MBE certification. Proof of the NAIC member firm’s certification is required as part of the portfolio company’s application process.
Q: What documents are required for NAIC certification?
A: NAIC requires several documents that clearly articulate the racial/ethnic/gender makeup of the owners of the investment firm, the ownership percentages of the investment firm, and letters of attestation by external counsel. Additional documents are required for portfolio company applicants. A full list of required documents and materials will be provided once an application interest form is completed
Q: How much does the MBE certification cost?
A: Certification costs $20,000 for each management firm and portfolio company and will be valid for a three-year period, assuming no material changes in ownership structure.
Corporations
We are delighted to offer a new and timely MBE certification process. One of the most important aspects NAIC MBEC is the requirement that applicant portfolio companies submit a SMART Community Impact Plan. This requirement allows them to demonstrate their ongoing commitment to building economic equity and empowering minority, underserved, and underrepresented people; both within the company and throughout the communities in which they operate. Using NAIC MBE-certified portfolio companies will expand the outcomes of your ESG efforts due to the community impact tracked and validated through this ground-breaking, certification process.
Frequently Asked Questions
Q: What are the benefits of participating in the NAIC MBE Certification program?
A: Participating in the program can help your organization increase its impact, expand spend with diverse suppliers, and enhance engagement with diverse communities. It also aligns with corporate ESG goals and can lead to mutually beneficial relationships.
Q: Who can apply for the NAIC MBE Certification?
A: NAIC member investment management firms in good standing and their portfolio companies can apply for the certification.
Q: Why is NAIC launching this program?
A: Historically, the portfolio companies of diverse-owned private investment firms have been excluded from the opportunity to participate in corporate supplier diversity programs, given the complex ownership model. NAIC recognizes the demand for greater supplier diversity and wants to provide corporations with the opportunity to access well-capitalized, scaled, and scalable MBE-certified companies to address this demand while giving its member investment firms the opportunity drive even greater value for their investor base.
Q: What are the certification requirements for portfolio companies?
A: To be eligible for certification, the NAIC member firm must first be certified. The portfolio company must also demonstrate diverse ownership, diverse governance, and have a measurable community impact plan that targets underserved communities. NAIC provides a list of legal documentation that must be submitted and is reviewed by a legal team to ensure clear ownership and/or control by an NAIC MBE -certified investment firm is established. The portfolio company must also submit a Community Investment Plan (CIP) with SMART goals that will be tracked annually.
Q: Why does NAIC require only 33% ownership for the investment firms to be certified as MBEs?
A: The 33% equity ownership requirement is consistent with the threshold that has been broadly used and accepted throughout the institutional investment industry as it pertains to Small, Emerging and Diverse Manager programs. It should be noted that NAIC’s equity ownership requirement is on par with the ownership requirement originally established by NMSDC for certification pursuant to its Growth Initiative Program. The organization’s current ownership stake for Growth Initiative applicants is 25%. NAIC MBEC program provides additional safeguards to ensure that the program is in alignment with the goals of corporations that want to increase the economic impact of their procurement dollars.
Q: What is the primary criteria for certification?
A: The primary criteria for certification include demonstrating at least 33% ethnic- or gender-diverse ownership for the NAIC member firm; and at least 51% voting and/or economic equity by fund that is controlled by an NAIC MBE-certified member firm for the portfolio company.
Q: How does participating in this program align with DEI values?
A: In an era where diversity, equity, and inclusion are recognized as essential drivers of success, expanding engagement with MBE-certified companies demonstrates an organization’s commitment to these values. Further the required CIP ensures that, not only do the investment firms and the portfolio companies benefit from the opportunities that are now open to them, but the diverse communities they serve benefit as well.
Q: How can partnerships with NAIC MBE-certified firms benefit my organization?
A: Partnering with NAIC MBE-certified firms can enhance the competitiveness of your supplier diversity program, provide access to new markets and innovations, and fulfill ESG responsibilities. Additionally, it offers access to thousands of well-funded, scalable diverse-owned companies that are well-poised to take on sizeable corporate contracts, meeting the infrastructure, geographic footprint, risk management and other requirements needed to meaningfully participate in corporate supply chains.
Q: Can a portfolio company apply for certification without the NAIC member firm being certified?
A: No, the NAIC member firm must be certified first for the portfolio company to be eligible for certification.