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Wilshire Consulting Bets on Diversity

The investment consultant and outsourced-CIO will make a point of including women- and minority-owned firms in manager searches, while tying senior compensation to inclusion efforts.

In a push to increase investment with women- and minority-owned asset management firms, Wilshire Consulting has launched a multi-step initiative to promote diverse managers to the consulting firm’s institutional clients.

The initiative, announced Monday, will require that Wilshire consultants recommend at least one woman- or minority-owned firm in every manager search conducted for public securities mandates. In addition, manager search materials published by Wilshire will include statistics for how diverse a given asset management firm’s ownership is.

For senior consultants at Wilshire, the amount and quality of their interactions with diverse asset managers will affect how much they earn in bonus compensation.

“Women and minorities remain underrepresented in our industry, and ensuring that clients are aware of the many talented firms led by these managers is a priority for Wilshire Consulting,” said Andrew Junkin, the consulting group’s president, in a statement. “We are confident that this initiative will enable us to work more successfully with diverse-owned firms.”

As of May 2017, women and minorities controlled just 1.1 percent of total assets under management, according to research by investment advisory firm Bella Research Group and Harvard Business School professor Josh Lerner. The study, commissioned by the John S. and James L. Knight Foundation, found that the percentage of women- and minority-owned funds ranged from 3 to 9 percent across mutual funds, hedge funds, private equity funds, and real estate funds.

In the statement, Wilshire Consulting said its diversity initiative was adopted in response to clients’ “increasing desire” to invest with more diverse asset managers. As the institutional investment advisory and outsourced-CIO unit of Wilshire Associates, Wilshire Consulting advises on nearly $1 trillion of retirement plan, endowment, foundation, and insurance assets.

[II Deep Dive: Asset Owners Big on Talking ‘Diversity’]

Robert Raben, director of the Diverse Asset Managers Initiative, described Wilshire as taking “meaningful steps towards diversity and inclusion” within asset management.

“This is genuine leadership, which we commend,” said Raben, who is also president and founder of the Raben Group, a public policy firm and lobbyist for diversity and inclusion, in the Wilshire statement.

In addition to changes in compensation and manager searches, Wilshire has renamed its “Emerging Manager Asset Class Committee” as the “Diverse Owned Manager Asset Class Committee” to emphasize its focus on finding “talented, diverse-owned firms.”

Wilshire Consulting has also promised to broaden its outreach to women- and minority-owned managers and develop a series of educational seminars for this group in 2018.

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