The Diverse Investing Collective Launches Public Dashboard and Transparency Brief to Shift the Paradigm of Who Controls Capital

News provided by

May 22, 2024, 08:00 ET

The organization aims to increase the assets managed by gender-diverse and racially-diverse portfolio management teams to 33% by 2033

SAN FRANCISCO, May 22, 2024 /PRNewswire/ -- The Diverse Investing Collective ("the Collective"), a measurement-driven organization focused on shifting the paradigm of who controls capital, officially launched today with the debut of its proprietary dashboard to begin measuring how many assets are managed by gender-diverse and racially-diverse portfolio management teams. Alongside the Dashboard, the Collective issued a transparency brief to explain the importance of collecting data needed to track and increase the amount of assets managed by gender-diverse and racially-diverse portfolio management teams to 33% by 2033.

The Diverse Investing Collective (“the Collective”) is a measurement-driven organization focused on shifting the paradigm of who controls capital.

Founded by experts in finance and healthcare, and guided by a growing coalition of asset owners and allocators and an advisory board from leading investment industry firms, the Collective understands who controls capital matters.

The dashboard examines data from 400 of the largest active, public equity funds. This initial version of the dashboard focuses on gender, with another version that will apply an intersectional lens providing data on race and ethnicity in addition to gender to be released later in 2024.

While a number of asset management firms have provided diversity data at the firm level, they have not provided it, into an easily accessible central database, at the fund level. This means asset owners, allocators, and other organizations cannot easily determine the make-up of individual fund teams making critical investment decisions or how much AUM they manage.

Key findings from the first Dashboard and accompanying Brief show:

Disclosure of fund team make-up is significantly lacking: 68% of funds are not disclosing gender and racial make-up of teams in a central database.
Gender-diverse teams manage just 17% of the $6.5 trillion in AUM examined.
Portfolio management teams that consist of only men manage close to half of AUM examined.
Public mutual fund teams are more gender-diverse than private separately managed accounts.
Male portfolio managers on average allocate 5.37 times more AUM than female portfolio managers.

"For too long, the people designing our financial systems and driving investment decisions have looked the same - and women and people of color have largely been excluded from financial decision-making tables," said Collective co-founder Ruth Shaber. "We know who controls capital matters, and the truth is that very few people know who is managing their money. Improving transparency and accountability are ways for investors to stop leaving money on the table."

"The data we've collected here shows much of what we already know: women and people of color are not only underrepresented in asset management, but they are also managing smaller amounts of capital," said Ivy Jack, co-founder of the Collective. "Investors need as much information as possible on individual investment team members in order to evaluate possible sources of cognitive diversity."

Learn more about the Collective and find the full Dashboard and Transparency Brief here.

Methodology
The Diverse Investing Collective examined two key data sources for its analysis: Nasdaq eVestment and SEC. To understand the disclosure of diversity data at the fund level, the Collective examined Nasdaq eVestment data, which compiles the largest database of public funds in the US and uses its Diversity & Inclusion questionnaire to collect gender and racial diversity data for fund teams. Using the Nasdaq eVestment data set, accessed in December 2023, comprising 8,230 U.S. funds managing $86 trillion in assets, the Collective analyzed the data in March 2024 to examine how many funds and top firms were providing these data. To examine how much AUM is managed by gender-diverse and racially-diverse fund teams, the Collective partnered with ExecuShe and ExecuNicity, to examine the 400 largest SEC and Nasdaq eVestment active public equity funds totaling $6.5 trillion in AUM, by reviewing fund websites and prospectuses to determine demographic data for key portfolio decision-makers.

About the Diverse Investing Collective
The Diverse Investing Collective is a measurement-driven organization focused on shifting the paradigm of who controls capital. Founded by experts in finance and healthcare, and guided by a growing coalition of asset owners and allocators and an Advisory Board from leading investment industry firms, the Collective understands who controls capital matters. The Collective is focused on achieving 33% of assets managed by gender-diverse and racially-diverse fund management teams by 2033. Learn more at www.diverseinvestingcollective.com.

SOURCE The Diverse Investing Collective