The Council on Foundations and Commonfund Institute surveyed 260 private and community foundations and endowments in the US, with a combined $115 billion in AUM. The push to increase diversity amongst asset managers is partly motivated by foundations and endowments considering including diversity in their investment policies.
The research found 25% of foundations are considering adding diverse managers to their investment policy statements over the next year. This figure is 24% for private foundations and 27% for community foundations.
Forty-seven percent of community foundations and 39% of private foundations were disusing diverse asset managers with their investment committees in 2020, a significant increase from the past two years.
The largest foundations are leading the push for diversity amongst asset managers, with 36% of community foundations with assets over $500 million seeking to invest with diverse asset managers last year. Twenty-four percent of the largest private foundations are seeking to do the same.
Both the recent COVID-19 pandemic’s effect on minority groups and the mass protests after the killing of George Floyd have raised awareness of inequality and diversity issues.
Women and ethnic minorities manage less than 2% of global AUM, according to a report by the Knight Foundation in 2019.