Without data collection, improving diversity remains a steep hill to climb


The first step to improving diversity within the asset management industry is to shine a light on what’s really going on, industry experts said.

That means pushing harder or outright demanding that fund managers, institutional consultants and other stakeholders disclose their diversity data, they said.

“There’s only one way to know if there’s a problem…and that’s to collect the data,” said Gilbert Garcia, Houston-based managing partner of Garcia Hamilton & Associates LP, a manager of minority-owned fixed-income funds with $16.5 billion in assets. under management.

“If you start collecting the data, we in the minority community already know what you’ll see, which is that a lot of the top consultants have very little diversity in their ranks themselves…and so no wonder minority companies don’t go through the process.”

In many relationships with asset owners, consultants are the “gatekeepers” to which fund managers are selected, said Shelly Heier, president of Seattle-based Verus Advisory Inc..

In 2020, Ms. Heier was a founding member of the Institutional Investing Diversity Cooperative, a collective of institutional plan sponsors and institutional investment advisory firms responsible for the stewardship of over $43 trillion in assets that aims to promote greater diversity in the asset management industry.

Through its data provider eVestment, a Nasdaq company that provides global institutional investment data, analysis and market intelligence, the IIDC has begun asking clients of fund managers to provide diversity data, but has not been very successful.

“The challenge we’ve had is that it’s hard to get the data,” Ms. Heier said. “We are still fighting to get asset management companies to disclose this data.”

Ms Heier added that there is “still a lot of fear and a lot of uncertainty on the part of the asset management industry to release this data because they don’t know how it’s going to be used. Naturally, the consultants will create a baseline with that, I think that’s the presumption. And we’re already looking at metrics of what’s good and bad. I think companies are very scared to provide that data.

She noted that fund managers are now reaching out to consultants “at a faster rate than in the past to engage one-on-one to discuss their diversity practices. They know we want to hear this information, so they respond, but with each consulting firm on an individual basis.”


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