Tools & Resources

Diversity in Asset Management: Research and Practice

Studies across a multitude of fields 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.


  • 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.
  • To demonstrate practice, you can take the ABFE Pledge. Becoming a signatory to the investment manager diversity pledge by ABFE allows organizations to publicly share their commitment to diversity and inclusive investment management practices. 
  • To maintain a commitment, you can build in policies and practices. Examples include a standing agenda in investment committee meetings or writing in goals regarding diversity in asset managers into Investment Policy Statements.
  • 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. Thus, stakeholders must regularly address unconscious bias in parallel to conscious efforts to advance racial equity.


    Foundation Activities

    Foundations have been working to increase the portion of their impact investments and/or overall assets managed by diverse-owned firms. In fact, Knight Foundation 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 commitments to fund manager diversity are described below, including recently updated content thanks to MIE's Investment Forum at SOCAP19.
    (UPDATED) Silicon Valley Community Foundation (SVCF): SVCF made asset manager diversity a priority, because diversity wasn’t happening on its own. By having intentionality, a senior champion in the organization, setting up a transparent process, having accountability for results, and integrating thinking into daily practices, SVCF went from having $52 million deployed to diverse-owned managers in 2013 to $190 million as of 2018. Visit the link for a profile featured during SOCAP19 on how SVCF worked with Colonial Consulting to make progress.
    (NEW) Cleveland Foundation: The foundation's Socially Responsible Investment pool, consists of fossil fuel-free public equities screened for social and environmental responsibility and gender diversity. To be included in the SRI Pool’s diversity allocation, the company board and executive team must include female and minority representation. It also has a place-based emphasis on Cleveland corporations. Visit the link for a profile featured during SOCAP19 on how Cleveland Foundation worked with Aperio to make progress.
    (UPDATED) Winthrop Rockefeller Foundation: 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. Visit this link for a profile featured during SOCAP19 on how the Foundation worked with Impact of America Fund to support entrepreneurs.
    Ford Foundation: 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: Knight 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 biased points of view 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 the subject.)
    The Kresge Foundation: Kresge 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. See below for a conversation featuring their CEO, Rip Rapson, at SOCAP19.
    Prudential Financial: Prudential 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 the Stanford Social Innovation Review essay linked here. The essay is part of a series curated by Mission Investors Exchange.
    W.K. Kellogg Foundation: WKKF works in partnership with Progress Investments on an Emerging Managers program that provides support and capital for firms owned by African Americans, Latinos, Asian Americans, and women to help build their investment funds, unlock 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. 


SOCAP19: Smart Investing, A Call for Diversity in Foundation Asset Management, featuring Rip Rapson, Kresge Foundation; Susan Taylor-Batten, ABFE 



Please contact [email protected] if you have trouble logging in.