Legislators Urge Endowments to Boost Asset Manager Diversity

Six members of Congress have sent a letter to the National Association of College and University Business Officers (NACUBO) calling for greater diversity among asset managers handling endowment funds of higher education institutions.

The letter cited recent research from the Knight Foundation that found that women and minorities manage a mere 1.3% of the $69 trillion asset management industry. The letter also cited a 2018 NACUBO-TIAA survey of 802 institutions in which only 4% had a diversity and inclusion policy for hiring managers.

“The lack of utilization of women and minority-owned firms is indefensible given the findings on investment performance,” said the letter. “We write today to both raise awareness and to ask for the support of college and university endowment managers in correcting this injustice.”

The letter was signed by Reps. Emanuel Cleaver, II (D-MO), Beatty, Marcia Fudge (D-OH), Hank Johnson (D-GA), Gregory Meeks (D-NY), and Terri Sewell (D-AL).

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“The disparities that exist in the asset management industry are unconscionable, and improving opportunities for diverse managers will go a long way toward equal opportunity and healthy capital allocation in the US,” said Cleaver. “The numbers clearly demonstrate that firms with greater diversity outperform their counterparts, and that colleges and universities are in a position to take advantage of this fact.”

In response to the letter, NACUBO CEO Susan Whealler Johnston wrote back essentially saying that the legislators were preaching to the choir. She said she welcomed the opportunity to show how NACUBO “has highlighted the importance of female- and minority-owned asset management firms’ active participation in the management of college and university investment assets.”

She added that the association was “keenly focused on the importance of diversity in asset management positions, as well as diversity in the business officer profession as a whole.”

Johnston said that NACUBO was not only aware of the research cited in the letter from the representatives, but that it has taken steps to underline the findings for its member institutions.

In April, the association released a podcast featuring Juan Martinez, CFO of the Knight Foundation, who discussed the findings of the report cited in the letter from the Congress members. Martinez is scheduled to speak to NACUBO’s member institutions, and the broader asset management community at the association’s endowment and debt management forum in February.

“NACUBO is also committed to our own internal diversity because it enriches and strengthens how we advance our mission,” wrote Johnston. “We are fully focused on equality and believe deeply in diversity of race, gender, sexual orientation, religion, ethnicity, and national origin, among other characteristics that make us each unique.”