Corporate MovesApril 11, 2023

Cambridge Associates Reaches Minority Investment Target, Sets New Goal

After hitting its goal of making 10% of investments with diverse managers, the investment firm aims for 15% by 2025.

Reported by Michael Katz

Investment firm Cambridge Associates is increasing the amount it plans to invest in diverse managers to 15% of its $548 billion in assets under advisement by 2025, after meeting its previous goal three years ahead of time.

In 2020, the company committed to doubling the percentage of its investments with diverse managers to 10% from 5% by the end of 2025. In 2022, Cambridge said it made new commitments to more than 40 diverse managers, of which 15 were new relationships. After reaching its goal for 2025 by the end of last year, it set a new target 50% higher than originally planned. The firm defines a diverse manager as being a minimum of 33% owned by women and/or people of color.

“Increasing the assets that are invested with women and people of color requires intentional decisions to re-examine all aspects of the investment process to achieve this more equitable goal,” Jasmine Richards, Cambridge Associates’ head of diverse manager research, said in a release. “When investment decisions can be grounded in more equitable processes, they can ultimately drive toward the most positive outcomes for everyone.”

According to the firm, 31% of its U.S. colleagues identify as ethnically diverse, up from 20% in 2015. It also said that while women and people of color make up more than 10% of the asset management universe, they hold less than 2% of the industry’s invested assets. It also said 62% of its clients hold investments with diverse managers and cited a recent survey of clients in the U.S., Europe and Asia that identified social equity, including gender and race, as a top driver for impact investing capital.

“We believe that inclusive teams make better decisions, demonstrate greater collaboration, bring forth bolder ideas, and drive better financial and investment outcomes,” Melinda Wright, Cambridge Associates’ global head of diversity, equity and inclusion, said in a release. “To support these beliefs, we take on two roles: acting both as excellent stewards of long-term capital, and also as champions of change and opportunity.”