Asset Managers Are More Willing to Report Diversity Data. That Doesn’t Mean the Data Is Improving.

A new Meketa survey garnered nearly double the manager responses year over year.

Illustration by II

Illustration by II

More asset managers are paying attention to diversity than before — but they remain relatively wedded to the status quo when it comes to actually improving metrics.

This and other findings are highlighted in a new report from Meketa Investment Group based on its annual Diversity, Equity & Inclusion Questionnaire. The investment consulting and advisory firm published the results of its second-ever questionnaire, based on data as of December 31, 2021, on Tuesday.

The survey had 420 respondents, up 50 percent from 2021. According to Amy Hsiang, Meketa’s director of public markets manager research, this signals an increased willingness on the part of asset managers to engage on topics of diversity, equity, and inclusion.

“We were thrilled to see the participation from the manager community,” Hsiang said. Last year, the consulting firm sent the survey to 830 firms, receiving just 238 responses. This year, Meketa sent it to 803 firms, with 420 respondents.

Asset managers are most willing to report annual diversity statistics to their clients — 52 percent said they share this information. According to the survey, 49 percent share data with consultants, 39 percent with prospects, and 23 percent with regulators.


“People in the marketplace are demanding more information,” Hsiang said.

But what that information shows is that there’s been little change overall in terms of the makeup of these firms, particularly at the leadership level. The top quartile of asset managers — those with a staff makeup of more than 42 percent women — saw no year-over-year increase in terms of gender diversity.

This was also the case with the top quartile in terms of the gender makeup of portfolio managers. The top-tier firms, those that reported that more than 20 percent of their portfolio managers are women, saw no change in the number of female portfolio managers on their teams. “That’s not surprising,” Hsiang said, adding that historically, there are fewer women entering the industry and fewer who stay in the workforce due to parental leave.

In other categories, including equity ownership and senior management, the number of women and minorities both declined year over year. Diverse-owned asset management firms have struggled to win allocations. According to a December Knight Foundation survey, of a sample set of $82.24 trillion in assets, only 1.4 percent of assets under management are controlled by diverse-owned firms, Institutional Investor previously reported.

However, Hsiang suggested not reading too much into these declines, given that a larger group of managers reported data this year than last.

In 2021, 42 percent of new hires were either female, “diverse,” or both. But these hirees are getting promoted at lower rates than their peers. According to the survey, 59 percent of promotions went to men, and more than 66 percent went to non-racially-diverse employees.

Hsiang noted that making diverse hires isn’t easy for some managers. She explained that one firm — which Meketa thinks highly of — is having trouble adding women to its portfolio management team due to its location. “We give them props for making that effort,” she said. “We try not to penalize any manager without knowing the full situation.”

Meketa also assessed managers’ policies surrounding diversity, equity, and inclusion. Ninety-six percent of firms have codes of conduct in place, while 82 percent said they have mandatory anti-harassment and non-discrimination training for employees.

The majority of managers, however, don’t tie senior leadership’s performance assessments to diversity and inclusion, according to the report. What’s more, managers are generally reluctant to share any data on compensation. Hsiang noted that while Meketa tried to ask GPs about pay gaps, they had to take the question out due to too much pushback from the HR teams at these firms.

“I would have liked to include more statistics on compensation, but I think that gets tricky for managers,” Hsiang said.