US-based funds management firm Ariel Investments has collaborated with JPMorgan Chase to launch a private asset management arm, dubbed Ariel Alternatives, which looks to close the racial wealth gap.

The new business, which marks Ariel’s entry into the private investment space, has been launched to support Fortune 500 supply chain diversity.

The aim is to back minority-owned businesses and position them as suppliers to Fortune 500 firms. This is supported by a $200m investment pledge from JPMorgan.

The funding commitment forms part of JPMorgan’s previously announced plan to invest $30bn to promote racial equity.

With ‘Project Black’ as its initial strategic initiative, Ariel Alternatives aims to bolster sustainable minority-owned businesses.

As part of this initiative, the firm will finance middle-market companies, which are not minority owned at present, transforming them into certified minority business entities.

Additionally, it will invest in existing Black and Latinx-owned businesses.

According to Ariel, Project Black looks to create employment, economic growth and equality within underrepresented populations from the entry level to the boardroom.

Leslie Brun, who co-founded Ariel Alternatives with Mellody Hobson, will serve as the chairman and CEO of the firm.

Hobson is currently the co-CEO, president and director of Ariel Investments, and chairman of the board of Trustees of the Ariel Investment Trust. She is also vice chair and incoming chair of the board of Starbucks, and a director of JPMorgan.

Brun said: “It is no secret that the racial wealth gap in America continues to widen, day by day. While we have been encouraged and inspired by the supply chain diversity commitments recently made by large corporations, we believe that it is time to accelerate these promises with real, measurable steps. Our work will aim to bring operational excellence, financial resources, minority ownership and leadership to these companies.”

Hobson added: “Through Project Black, we plan to ultimately disperse opportunity throughout underrepresented communities. We want to change the narrative and foster true action and demonstrable change.”

The investment team of Ariel Alternatives will be spearheaded by Project Black co-founders Frantz Alphonse and Richard Powell. The two have been named as senior managing directors of Ariel Alternatives.

Ariel Investments was advised by Kirkland & Ellis on the establishment of Ariel Alternatives.

In 2015, Ariel made its offshore foray by opening its first offshore office in Sydney.