“If a company provides a value proposition not just to employees and customers and investors, but also a broader social value proposition, it should be worth more,” says Mr. Nesbitt. “It’ll be supported by policy over the long term. It’ll have community support over the long term. Revenues will therefore be stable. And it should be more valuable.”
There was limited data to support that theory when Messrs. Nesbitt and Kirkpatrick launched their firm, the Vistria Group, in 2013. After all, that was six years before the US Business Roundtable issued its statement calling for companies to serve all stakeholders rather than just shareholders. In 2021, the Vistria Group stands as a compelling data point in the argument for inclusive capitalism. It raised $400 million to launch its first fund in 2013 and in the interim has raised three additional funds, the last of which closed this summer. That fourth fund, which closed at $2.68 billion, puts total assets under management at just over $6.5 billion.
Demand is strong from investors that include large pension funds, university endowments, companies and family offices. “Across the board, we’re excited and encouraged that we have many investors in our fund who take great pride in what we’re doing but also hold us to a high standard of performance,” says Mr. Kirkpatrick. “Everybody’s saying, ‘Of course I want high returns. But tell me more about how I’m getting those returns. Tell me more about who those underlying managers are. Are they diverse? Does it paint a picture of the America we want it to be or is it all the same firms who come from very privileged backgrounds?’”
The Vistria Group follows the same basic mechanics as traditional PE firms, raising money from accredited investors and then taking controlling stakes in businesses. But on its website, the firm describes itself as operating “at the intersection of purpose and profit.”
The two Chicagoans became friends on the basketball court, where their game was recreational but competitive, Mr. Kirkpatrick having starred as a three-year starter at Northwestern University. Among the players in their pick-up basketball circle was President Barack Obama, who in his memoir “Promised Land” portrays Mr. Nesbitt as one of his closest friends and advisors (see Sidebar).
Before starting the Vistria Group, their off-the-court accomplishments were substantial. As an officer of the Pritzker Realty Group, Mr. Nesbitt had co-founded and run as CEO The Parking Spot, the well-known owner and operator of off-airport parking facilities. Mr. Kirkpatrick had co-founded two healthcare-focused private equity firms and was serving as CEO of one of the nation’s leading independent mortgage lenders.
At the Vistria Group, the two men focused their investments in healthcare, financial services, and education—industries that Mr. Kirkpatrick jokingly dubs, “healthy, wealthy, and wise.” An example of their success at Vistria is Penn Foster, an educational company that enables adults to earn a high-school degree. Vistria invested in Penn Foster and also connected it with businesses looking to offer employees the chance to continue their education.