Black Private Equity and Finance Professionals – Dealers Spotlight: Kneeland Youngblood | McGuireWoods LLP

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The following series features interviews with black dealmakers and pioneers in the private equity and finance community. To help us shine a light on professionals who are making a difference in their career path, please email Greg Kilpatrick at [email protected] and Gerald Thomas at [email protected].

Q: What attracted you to physical education?

Dr. Kneeland Youngblood: I practiced medicine and life was good. I got involved in politics, I contributed to popular campaigns and I organized events for politicians. I was invited to a meeting in Austin, Texas. Then one day I was in the hospital and I got a call. The nurse handed me the phone and said the person on the phone wanted to talk to me about the Austin meeting.

The person on the phone said, “My name is Don Williams. I’m the CEO of a company called Trammell Crow (a commercial real estate investment and development company). I also go to the meeting. Why don’t we just go together?” I replied, “Of course. Which American Airlines or Southwest Airlines flight are you on?” His response: “No, I own a jet. Just come fly with me.”

I got on the jet, and that’s when I realized I was in the wrong business. I had no idea at the time of the world of finance. Once I was exposed, I said, “I want to figure this out.” I knew I couldn’t afford to go back and get an MBA and work on Wall Street. So I asked the Governor of Texas to appoint me to the board of directors of the Teacher Retirement System of Texas, which is the largest capital pool in the state. I sat on the board for six years and I learned. I looked at public stocks, fixed income, real estate, and then private equity.

When I was exposed to PE, I knew it was good for me. I knew that was what I wanted to do because there was the opportunity to build multi-generational wealth, but there was also a lot more stability compared to other types of investment strategies, like hedge funds and real estate. I had six children and a lot of responsibilities. PE appealed to me because the contracts are basically 10 years, so I could plan things around my obligations to my family. So that’s what started my career in physical education.

Q: Why is it important for more black professionals to pursue careers in physical education?

KY: While I think it’s important for black professionals to pursue and participate in PE, I would expand my answer and say that I think it’s important for black professionals to pursue careers in finance and business in all dimensions, whether as entrepreneurs, on Wall Street or in the PE space. Among America’s most important foundations is capitalism. We need to be opinion leaders in space. Otherwise, if we are not, we become “less than”.

I think it’s extremely important that we provide leadership in all aspects of business and private equity in particular. Private equity and the venture capital space are areas where huge amounts of wealth are created, huge amounts of impact are created, and there is a huge amount of influence. I think we have to be in that flow. Otherwise, we will be marginalized.

Q: What does diversity, equity and inclusion mean to you, and why are they important?

KY: America’s strength lies in new ideas, new people, and new approaches to freedom. Diversity, equity, and inclusion help strengthen and expand the openness of freedom for all and represent the continued evolution of America at its peak.

It’s not a perfect land, but it continues to reinvent itself; it continues to evolve; he continues to challenge himself in such a way as to represent the most authentic form of freedom. Diversity, equity, and inclusion represent an ongoing effort toward those goals and aspirations that we, as a nation, enshrined in the Declaration of Independence and the United States Constitution—those extraordinary letters that seek to unleash the fullness of human potential in the most collaborative of ways.

Q: Why do you actively support the provision of capital to black entrepreneurs?

KY: I think providing capital to black entrepreneurs is extremely important because the perception of access to capital and the reality of access to capital are some of the most difficult barriers within the black community to making risks. If you want to be a successful entrepreneur, you have to be willing to take risks. You must be prepared to have courage. Access to capital helps mitigate challenges and overcome the risk one takes. Access to capital is not a determining factor in terms of success, but it certainly helps in this regard.

One of the challenges of the black community is the lack of friends and family money. What I have tried to do with others is to promote access to capital, personally or through various means. I sit on the board of Caltech (California Institute of Technology). He has an endowment. I promote access to capital at the endowment level for a more diverse roster of asset managers, as I believe this will generate the best returns for the institution. I have served on the board of the Teacher Retirement System of Texas, the board of the City of Dallas Pension Fund, and the Dallas Police and Fire Pension Fund – all with the same mantra.

Additionally, we have, through the Black Economic Alliance, launched the Center for Black Entrepreneurship, housed initially at Spelman College and Morehouse College. We seek to raise $100 million in classroom experience and online education related to other historically black colleges and universities as well as black people around the world who can earn a certificate in this field.

We also created a fund specifically to be the first dollars in venture capital for entrepreneurs. We have a target of about $50 million. We are fortunate to have received the initial commitment of $20 million and we are well on our way.

Providing access to capital funding for Black entrepreneurs is in our collective interest, to uplift people – people who have been most challenged – and help them recognize the fruits of capitalism and the freedoms that come with this great country.

About Kneeland Youngblood

Kneeland Youngblood, MD, is a founding partner of Pharos Capital Group. He is President and CEO of the company and responsible for the company’s overall strategy. Youngblood is a member of the investment committees of Pharos funds and currently sits on the boards of Egenera, Reel FX and TotalTrax.

Youngblood was chairman of American Beacon Funds, a $30 billion mutual fund company managed by American Beacon Advisors, a $65 billion investment subsidiary of American Airlines. He was a director of Starwood Hotels and Lodging, one of the largest hotel companies in the world, with more than 725 properties in 80 countries and 120,000 employees. He has also served on the boards of Burger King, Gap and the Teacher Retirement System of Texas. He is a former director of US Enrichment Corp., a global energy services company that went public in 1998 in a $1.4 billion initial public offering in the largest US government privatization since. Conrail. He was nominated by the President with confirmation by the Senate of his role on the board. He is currently lead director on the board of Scientific Games Corp. and sits on the boards of the Black Economic Alliance, California Institute of Technology, Core Scientific, and the Prostate Cancer Foundation.

Youngblood is a member of the Council on Foreign Relations. He graduated from Princeton University in 1978 with an AB in Human Affairs Politics/Science and received an MD from the University of Texas, Southwestern Medical School in 1982.

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