Scaling Black Enterprises

Marques Torbert and Bruce Hampton left comfortable roles in finance and executive leadership to launch 5th Century Partners (5CP), a purpose-driven private investment firm focused on middle-market companies. The firm seeks to generate strong financial outcomes for its portfolio companies that help improve the economic outlook of diverse communities and stakeholders.

The partners spoke about scaling Black businesses and the legacy of their firm at this year’s DuSable Conference at Chicago Booth. The chat was moderated by Johnathan Davis, ’22, cochair of Booth’s African American MBA Association.

Finding the Right Partner

Growing up in the same Cleveland neighborhood, Torbert and Hampton were aware of each other from an early age. They crossed paths often—Hampton even bought his first car from Torbert’s stepdad—and they found themselves in the same professional networks as adults. As Hampton put it, “You can imagine the number of people that look like us that have left the city and launched careers in high finance. That ecosystem is pretty small.”

Both say they went into the venture with no illusions. “We’ve seen partnerships blow up. We’ve seen partnerships go awry; so we were eyes wide open going into this,” Hampton said. “Similar to a marriage or any other relationship, you have to be intentional with your time and how you engage.”

Torbert stressed the importance of communication between partners and a shared vision. “Are you aligned in terms of your values and in terms of what you want from the business?” he said. “That’s just as important as how talented somebody might be from a professional standpoint.”

As their business venture began to take shape, Hampton, Torbert, and their third partner, Jessica Patton, invested considerable time in working together to build a strong foundation. They even made the decision early on to relocate from their respective locations to Chicago to foster a smooth partnership and to ensure that they were doing everything in their control to create a successful outcome.

They also invested in external resources such as executive coaching and spent a considerable amount of time developing the firm’s culture, being intentional about attracting and hiring talent, and building the firm’s overall infrastructure in a way that could support a firm at scale. “Most firms that are getting off the ground try to save every penny,” Torbert said. “We were investing in outside resources to help make sure the foundational elements were there and that we were aligned.”

Pitching a Diverse Private Equity Fund

Noting that 5CP recently closed an oversubscribed fund—the initial target was set at $100 million and closing at $144 million—Davis asked what it was like to pitch a diversity-focused firm to investors.

Torbert admitted that it was a tough journey, in part because of structural hurdles. For example, investors expect fund partners to have a long history of working together at another private equity firm.

“Our team represents a number of diverse people, and that doesn’t exist at most funds,” Torbert said. “We could never have worked together at another private equity firm or finance institution and spun out to launch a new firm after having worked together for a decade. It just doesn’t exist.”

Hampton added that another obstacle facing diverse teams is the requirement to invest a substantial amount of one’s own capital before a large institution will invest.

“No matter how good your strategy is, or your background or your track record, if you don’t have the ability to invest in resources to build out a real platform, you’re not going to be able to take on institutional capital,” he said. “Luckily, we got guidance from people who went before us—but you see where really talented folks can find themselves tripping along this path because of some of these roadblocks.”