Institutional investment consultants call for transparency over diversity


Consulting firms in the institutional investment industry, including Aon, SEI, and Verus, have formed an action group to target gender and ethnic diversity within investment teams. 

The members of the Institutional Investing Diversity Cooperative (IIDC) are responsible for the stewardship of more than USD4 trillion of assets held by their client institutions in retirement plans, employee health funds, endowments, foundations, operating funds and capital reserves, among others. 

The IIDC is calling for better transparency in disclosing diversity within investment teams at the product level. 

Shelly Heier, the president of Seattle-based discretionary management provider Verus says support for the initiative has been encouraging. 

“This is a critical issue for our industry,” she says, “and we had no doubt that our fellow consultants would rally behind a call for clarity and more useful data that would allow us to measure diversity beyond firm ownership.” 

Founding members also include Angeles Investments, Canterbury Consulting, Ellwood Associates, LCG Associates, Marquette Associates, Meketa, Milliman Advisors, NEPC, SageView Advisory Group, and Segal Marco Advisors.

The group is issuing a joint statement to every manager that participates in the database of investment data provider eVestment, which is supporting the IIDC.

eVestment has also developed a new data questionnaire in order to gather information on asset managers’ policies, mentorship, and research around gender and ethnic diversity.

Erika Spence, global head of data strategy at eVestment, says that the firm receives “ongoing requests” for more information on how managers are thinking about diversity and inclusion. “These asset owners and allocators want to know firm policy but also how it’s being implemented,” states Spence. 

“That’s why we’ve collaborated with investment consultants like Verus, along with institutional investors and industry organisations to develop questions that give managers an opportunity to better articulate what their firms are doing to develop and nurture a diverse talent pool, ensure parity and address issues like sexual harassment that undermine the principles of fairness.”

In addition to questions about firm ownership, eVestment will be adding several quantitative questions in January that allow managers to describe the compositions of their portfolio management team. 

Heier says that the IIDC is pursuing a collaborative approach with managers. 

“Our philosophy is to ‘ask and listen,’” she said, “but by recognising the need for better data on diversity all around, we’re off to a good start. We believe that diversity is multi-dimensional and that diverse investment teams – and viewpoints – enhance investment decision-making. We also believe that having more women and minorities in asset management roles improves the conversation, opens opportunities for all, and benefits the community at large.”