Private equity startup Uplifting Capital uses alternatives for impact

The former CEO of a billion-dollar RIA left the firm to launch a company working at the intersection of wealth management, private equity and impact investing.

Toussaint Bailey's Uplifting Capital opened its first private fund offering this summer after closing a seed financing round of $2.6 million at the end of last year, Bailey said in an interview. He'll step down as chairman of the board of Petaluma, California-based Enso Wealth Management, where he was CEO for the previous three years, upon completion of the firm's recently announced sale to registered investment advisor acquirer Choreo. 

Uplifting Capital

Bailey's new firm is already gaining notice across the industry as it seeks to create what he described as "a direct indexing experience in the private markets" through investments in areas including small business development, affordable housing, financial inclusion, renewable energy, sustainable food, education and healthcare. Uplifting's seven-member team plans to start separately managed accounts next year and raise an additional $5 million to $8 million from three to five RIAs or asset managers, according to Bailey.

The company's first offering for investors is a "diversified private equity fund that's configured by asset class and investment theme" based on screens for impact and a fit for clients' portfolios, Bailey said. "We give them the opportunity to personalize that and connect to the themes that they're most passionate about."

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Sales of some alternative assets are growing even as they gain more scrutiny from regulators in certain cases. Despite the reputation of private equity and other alternatives as risky plays aimed at the largest profits, more managers are nudging the nonpublic investments toward goals like environmental sustainability or getting capital into historically excluded communities. 

Giants such as Blackstone, Goldman Sachs, Brookfield Asset Management and KKR have helped drive $149.2 billion in investments into private equity funds geared toward sustainability in the past decade, according to an April 2022 report from the American Investment Council, a trade and advocacy group for the private equity industry. For example, Blackstone portfolio company EQ Office's $500-million renovation of Chicago's Willis Tower could slash its energy consumption by 20% and its water usage by 30%.

"You shouldn't have to concede portfolio goals or portfolio design goals," Bailey said. "Impact investments should just be really really good investments, and you should expect at least as much out of them as traditional investments. Impact investments are not a concession."

Bailey worked as a partner at a law firm where he was an attorney for 11 years before joining Enso, which was co-founded by his brother-in-law Jim DeCota, in 2018. Bailey developed the idea for Uplifting in 2020, when his interests in social justice, private markets and venture capital converged with more free time during the early stages of the pandemic. He discussed the concept with F2 Strategy Consultant Doug Fritz, who connected Bailey with Jonathan Firestein, the former head of private capital and impact investing at U.S. Bank's Ascent Private Capital Management and director of research of private capital and impact investing at Wells Fargo's Abbot Downing. Firestein is now Uplifting's director of investments and the firm's other shareholder alongside Bailey.

"Toussaint was pivotal in designing and enhancing Enso's business strategy and company culture," DeCota said in an emailed statement. "It has been an absolute pleasure working with him closely to grow the firm to nearly $2 billion in AUM and guide Enso to its next chapter with Choreo. Uplifting Capital's mission reflects who he is as a person and I'm excited to watch all that continue to unfold."

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Besides the two shareholders, Bailey's wife Denise is Uplifting's chief of staff, Tamerri Ater is its director of communications and engagement and Sara Henning is the director of impact. In less than a half a decade in the industry, the publication WealthManagement.com named Bailey one of its "Ten to Watch in 2023." Bailey anticipates eventually raising hundreds of millions of dollars a year, starting with investments from clients who have between $5 million and $100 million of investable assets, then extending to all accredited investors and into crowdfunding projects.

While declining to go into much detail, he said the "next 2.0 of what we're doing" at Uplifting involves "creating a digital experience" and forms of "experiential investing." The software could present an online version of what Uplifting calls its "impact dinners," bringing together people from a variety of professional fields and experiences to discuss solutions and collaboration on the most pressing issues. The firm and a criminal justice nonprofit organization called the Reform Alliance recently hosted about 30 people who shared "personal stories of how their lives had been affected by the criminal justice system," according to Uplifting's website. 

"Investing is going to become experiential," Bailey said. "Taking that into the digital form is really where we're headed."