Larger Managers Are More Likely to Prioritize Diversity and Inclusion

A preview of Preqin’s ESG transparency indicators reveals which manager types more commonly include official diversity and inclusion policies in their hiring processes

Calls for diversity in asset management are nothing new. Institutional investors have long held policies looking to allocate to women- and minority-owned managers. The investment management industry, however, has historically been less forthcoming with hiring practices, but this is changing. More than three-quarters (79%) of total assets across the alternatives industry are managed by GPs with confirmed policies in place for diversity and inclusion.    

As part of Preqin’s larger initiative to measure environmental, social, and governance (ESG) transparency among fund managers, we found that larger managers – the likes of BlackRock, Goldman Sachs, and J.P. Morgan – are far more likely to have a formal diversity policy than their smaller counterparts. Indeed, most of the world’s top private asset GPs have a publicly available policy to promote diversity in their hiring process. As Fig. 1 shows, 82% of the assets in the highest AUM quartile are managed by GPs that have publicly available disclosures of a diversity policy in place.

Geographically, managers in North America and Europe more commonly disclosed their diversity policies publicly (Fig. 2). Comparatively, Asian firms are less likely to publicly disclose these policies. This apparent bias, though, is likely afforded by the greater concentration of assets and managers in Europe and the US, as opposed to inherent cultural or demographic differences. 

To collect this data, Preqin only included specific policies toward addressing diversity and inclusion matters. Simply stating that a firm considers diversity was not enough without material support. How organizations follow through on these policies is less clear and not a required disclosure, though. Efforts on this front should still be noted, particularly in what is a typically secretive industry.

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