Tools & Resources

Diversity in Asset Management: Research and Practice

Studies across a multitude of fields and industries have identified the potential economic and social benefits of diversity. Yet the asset management industry continues to struggle with a lack of diversity — despite evidence demonstrating that there is no significant difference in the performance of firms owned by women and minorities when compared to their peers.
A report commissioned by the John S. and James L. Knight FoundationDiversifying Investments, examined four segments of the asset management industry — mutual funds, hedge funds, private equity funds, and real estate funds — and found that women- and minority-owned firms made up 3-9% of the industry and controlled 1- 5% of the assets under management. The lowest levels of diversity were found among real estate firms, of which 0.7% and 2% were women- or minority-owned. At private equity firms, 1.9% and 3.7% were women- and minority-owned. Similar findings are echoed in a variety of reports, including a US Government Accountability Office report that notes that investment firms owned by women and people of color manage less than 1% of the $70 trillion in U.S. assets under management. In contrast, women and people of color make up about 70% of the US population as of 2018.
Building a better balance is not only the right thing to do for the asset management industry: evidence by the Small Business Administration also suggests that investment decision-makers of color are more likely to direct investments towards entrepreneurs of color. Shifting decision-making in the asset management industry can thus ultimately have a ripple effect that results in better support for entrepreneurs of color in all areas of the capital market.
Foundations have been slowly working to make targeted commitments increase the portion of their impact investments and/or overall endowments managed by diverse-owned firms. In fact, the Knight Foundation study also found that, compared with firms that are not diverse, the average woman- or minority-owned firm has proportionally more assets under management invested with them by public funds, foundations, endowments, high-net-worth individuals, and family offices. Examples of foundations that have made or fufilled commitments to fund manager diversity are described below.


  • Every point of exchange in the flow of capital offers an opportunity to consider racial equity — including decision-makers in the investment ecosystem, such as asset managers and consultants.
  • Evidence consistently indicates that funds led by people of color perform the same as their peers. Yet the point of view persists that firms are of higher risk, indicating that biases may be driving decisions. See this essay by Sherece West Scantlebury of Winthrop Rockefeller Foundation to learn more. 
  • Foundations can write in commitments regarding racial equity, including goals regarding diversity in asset managers, into their Investment Policy Statements.
  • Review the ABFE Pledge: Becoming a signatory to the investment manager diversity pledge by ABFE allows organizations to publicly demonstrate commitments to diversity and inclusive investment management practices. 
  • This page is evolving: if you have ideas to share, please contact us! And visit our Racial Equity Library for a growing list of related resources.


Foundation Activities

    • Ford Foundation has committed to diverse fund managers as a critical element of their mission-related investments strategy — part of a portfolio involving $1 billion of their endowment assets. Click here to learn about Ford Foundation's new partnership with Fairview Capital Partners to launch a new investment fund that will invest in funds sponsored by diverse, women- and minority-owned, venture capital and private equity firms. 
    • The Knight Foundation grew its investments managed by firms led by women and people of color from $7 million to nearly $500 millon in their approximately $2 billion endowment in about 3 years. Knight's own experience challenged skeptics who believed that the decision would result in lost returns: in fact, Knight's diverse-owned funds match returns across the portfolio — and slightly surpassed them. Their results are also backed by the industry research mentioned above. (See this op-ed by Knight CEO, Alberto Ibargüen on this subject.)
    • The Kresge Foundation announced on April 3, 2019, that 25% of its U.S. assets under management will be invested in female and diverse-owned firms by 2025.
    • Prudential Financial has placed $905 million of corporate account dollars with minority- and woman-owned asset managers, sparking billions in asset growth at participating firms, noted in this Stanford Social Innovation Review essay curated as part of a series by Mission Investors Exchange.
    • The Winthrop Rockefeller Foundation notes that close to 36% of their endowment, amounting to more than $47.1 million, is mission aligned and invested with firms led by people of color or women in this Stanford Social Innovation Review essay curated as part of a series by Mission Investors Exchange.
    • W.K. Kellogg Foundation works in partnership with Progress Investments on an Emerging Managers program that provides support and investment capital for firms owned by African Americans, Latinos, Asian Americans, and women to help build their investment funds, unlock new opportunities, and ultimately manage more of the foundation's $8 billion portfolio over time. As of 2019, $205 million is managed by participants in the Emerging Managers program. See this case study in partnership with ABFE, A Philanthropic Partnership for Black Communities, to learn more about how WKKF made this shift.

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