The $4.4 billion District of Columbia Retirement Board is considering doubling or tripling its 5% allocation to small minority money managers, and is surveying 6,000 firms to help it determine whether such firms do indeed face discrimination, said Berna Gunn-Williams, chairwoman.
The board's "disparity study," which includes firms owned or run by women not now on the pension fund's farm team, will be completed around the end of the year, she said. It also will examine minority brokerage firms. Fiduciary Investment Solutions Inc., Philadelphia, is conducting the study.
"Seventy percent of our beneficiaries and participants are minorities and we think it is only fair minorities get a larger piece of the pie," Ms. Gunn-Williams said.
Board members felt it was necessary to conduct a study to justify its decision to hike its exposure to minority managers across all asset classes, she said: "We don't want to be challenged."
Although the board does not direct brokerage, it is including trading practices of brokerage firms, such as questions about their ability to do large volume trades, or to pass on trades to larger firms that then actually conduct the transactions.
Apart from the survey, the board's study will include independent statistical analysis and focus group interviews.