The SEC and other federal agencies should mandate ways to increase diverse managers in the financial industry, Illinois State Treasurer Michael Frerichs told a Securities and Exchange Commission asset management advisory committee Wednesday.
Mr. Frerichs, the state's chief investment officer, told a diversity panel that institutional investors have an obligation to pursue shareholder value, and more diverse workforces play an important part in increasing investment returns. He advocated several steps that companies, as well as asset managers and investment consultants, could take, including public disclosure of workforce diversity data. He also called on the SEC to launch a study to evaluate investment consultant practices and barriers to diverse investment firms.
Having more data on diversity in the asset management industry "provides a foundation for meaningful discussion," Cheryl Alston, executive director and chief investment officer of the $3.6 billion Dallas Employees' Retirement Fund, told the panel. Her organization's approach is to "weave diversity into the DNA of all the investment management activities," she said.
Anyori Hernandez, director of the emerging manager program for the $220 billion New York State Common Retirement Fund, Albany, which has $7 billion invested in all asset classes, called on the SEC to increase the diversity of its own workforce. "Given current events, diversity has never been more important that it is today," he said. "We want to see the face of America in our civil service workforce."
Panel moderator Gilbert Garcia, founder of fixed-income manager Garcia Hamilton and Associates, with $15.8 billion under management, said that the diversity subcommittee hopes to deliver concrete suggestions to the asset management advisory committee in early 2021 that can be presented to SEC officials for increasing industry diversity.