Asset Management Still “Inflicted” By Lack of Diversity As Emerging Managers Fight For Small Piece Of Pie: Report

Investment management is well known to be dominated by white males.

But it’s still startling to see what a small percentage of assets (1.1%) are managed by firms run by women or minorities, according to a new report authored by Harvard Business School and Bella Research Group’s Josh Lerner.

The stark number comes even as public pension funds create mandates to invest in emerging managers.

And the issue isn’t performance, because academic evidence suggests emerging managers perform just as well as white-male-run investment funds.

More on the study’s findings, from Chief Investment Officer:

They found that women-owned mutual funds control just 0.9% of assets under management, while minority-owned mutual funds control just 0.3% of assets. Among real estate funds, women-owned companies control just 0.3% of assets and minority-owned firms hold 1.5% of assets.

In the hedge fund industry, firms owned by women and minorities hold less than 1% of all assets, Lerner found. In private equity, the figure is less than 5%.

“Despite the potential economic and social benefits of utilizing diverse asset managers, the industry is afflicted by a lack of diversity,” Lerner wrote in his report.

[…]

“We highlight the need for data sources with comprehensive and detailed reporting of diverse ownership and diverse management,” Lerner wrote. “This demographic information is most notably absent in the PE and real estate spaces. Creating a publicly available, non-proprietary database with this information should be a top priority for the investment community.”

 

Photo by Satya via Flickr CC License

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