A Study Quantified the Gap Between DEI Intentions and Realities at Hedge Funds

The Black Hedge Fund Professionals Network published on Wednesday one of the most thorough reports yet about diverse employees at investment firms.


Illustration by II (Bigstock Photo)

Andra Ofosu, now a director of U.S. sales at Aspect Capital, laid the foundation for the Black Hedge Fund Professionals Network well before she founded the nonprofit in 2019. For years at a prime brokerage and then at an alternative investment firm, much of her time was spent connecting with hedge fund employees and their clients. Along the way, she met other Black professionals. Ofosu and her peers were often among the few, or only, Black employees at their respective firms. They shared their experiences, realized that they faced similar challenges and supported each other.

The Black Hedge Fund Professionals Network formalized this group to help individuals navigate their careers and help the hedge fund industry better understand what it needs to do to make its workforce more diverse.

On Wednesday, the BHFPN published a report on diversity at hedge funds based on a survey of 115 employees who represent Black and brown colleagues and allies at mostly hedge funds but also other financial services firms, including private equity and venture capital. Most are long-tenured, “adding to the depth of their perspective on how the industry has engaged on DEI over time,” the report says.

The report also reveals quantifiable data about the experiences of Black people across the hedge fund industry, something that is often missing from other similar reports, Ofosu said.

“Having been in this space for almost two decades, I wasn’t terribly surprised by the insights that we shared. I think — what is always really helpful — is that a lot of times the insights we have can be anecdotal; it’s stories from individuals around their experience, things that they’ve shared around their experience, but it’s not concrete metrics and data,” said Adebola Osakwe, a BHFPN board member and an executive coach and diversity consultant. Osakwe was previously the global head of talent and diversity at Millennium Management, holding similar leadership positions at KKR and Morgan Stanley.

“The benefit of doing a survey like this was that we could put some real metrics to the stories that people have shared and people recognize is the experience of individuals in the industry, in the sector,” she said.


Beginning with the death of George Floyd in 2020 which resulted in protests around the country and brought mainstream attention to issues such as the relationship between Black people and the police, hedge funds, like many other companies, began investing in initiatives to recruit and retain Black employees. However, hedge funds have fallen short of their stated goals despite those efforts.

While 70 percent of respondents to the survey agreed that diversity is valued at their firms, 35 percent expressed that their race or ethnicity has hindered their career. Eight percent indicated that race has helped. Diverse professionals with long tenures in the industry have not translated their experience into executive positions. Less than half of respondents (43 percent) said their firm had more than two diverse leaders in a C-suite or managing director role.

Most people surveyed (55 percent) said their firm does not have a dedicated DEI executive or individual program head focused specifically on diversity around recruitment, retention, and internal company culture.

Without representation in leadership, it’s less likely that companies will create the supportive structure that the report argues is required to make a more meaningful impact faster.

“I’d hoped, especially given that respondents were a lot of people who work at sizable firms, that more firms would have [employee resource groups], more firms would have people who have direct ownership of diversity initiatives, whether it’s a diversity committee or head of DEI. That part, I wouldn’t say it was a surprise, but I’d hoped that having come this far, that would be reflected in the data,” Ofosu said.

Over 67 percent of respondents said their company did not have any affinity networks or employee resource groups that offer boot camps or exploration programs that connect employees with resources to help them learn, network, and advance. Additionally, more than one-third (37 percent) of respondents report that their firms do not have a diversity and inclusion committee.

Employees who don’t get that support begin looking outside the walls of their organization for opportunities, according to the report. Half of respondents have been with their current firm for only 1 to 3 years and only 32 percent have a tenure surpassing seven years.

Ofosu and Osakwe said many hedge funds are genuinely interested in having a more diverse workforce. They believe a collection of different backgrounds and perspectives would lead to better ideas. But even the most well-intended investment firms have fallen short. Their hope is that the BHFPN report will encourage the hedge fund industry to continue its work.

Some of the reports recommendations might not be new, but they could help firms “streamline their thinking or thought process around where they are and where they want to go,” Ofosu said.