"Creating opportunities for women and people of color in the financial sector is critical to address the stark racial divide in the industry," Mr. Booker said in a news release June 22. "Institutional investors like colleges and universities, who are stewards of taxpayer dollars, play a key role in the solution."
Mr. Cleaver in the news release references a December 2021 study from the John S. and James L. Knight Foundation, which found only 1.4% of $82.24 trillion in U.S. assets were managed by women- and minority-owned firms as of September 2021. Mr. Cleaver called this finding "offensive as it is embarrassing for our nation."
"Congress must take steps to ensure this enormously influential industry is providing equal opportunity to the countless qualified, high-performing firms headed by women and minority managers that have been historically shut out, and I believe the Endowment Transparency Act is a perfectly logical place to start," Mr. Cleaver said in the release.
The bill would also require the Minority Business Development Agency to publish a report, updated every two years, recommending legislative changes and best practices to increase the use of diverse-owned firms in higher education investments. In addition, it would authorize a conference every two years convening higher education institutions and professionals from the investment industry to facilitate networks and increase business opportunities.
"Thank you to Senator Booker and Congressman Cleaver for their leadership in drawing attention to the underutilization of talented women and people of color in the management of universities' endowments," said Robert Raben, executive director of the Diverse Asset Managers Initiative, in the news release. "It remains incredible to the Diverse Asset Managers Initiative that it requires federal legislation to get universities to say whether and how they work with women and Black, Latino or Asian Americans, but sadly that is where we are."