Only 18 of the 50 endowments of the wealthiest private and public higher education institutions in the U.S. fully participated in a survey to determine to what extent they hire investment firms owned by women and racial or ethnic minorities, rendering it difficult to make any conclusions about this topic.
Another eight of the 50 endowments self-reported their summary statistics, while 24 did not participate at all, according to a survey — Knight Diversity of Asset Managers Research Series: Higher Education 2024 — that was released April 18.
The survey was conducted jointly by the Global Economics Group, the Knight Foundation, and the Center for Business and Human Rights at New York University’s Stern School of Business.
The 50 institutions’ endowments collectively hold about $566 billion in total assets, or more than two-thirds of the nation’s higher education endowment dollars.
The 18 institutions that fully participated in the study had a total of about $226.6 billion in assets. However, for the purposes of this survey, $129.2 billion was determined by Knight to be eligible for analysis. Referred to by Knight as "analyzed AUM," these are invested assets of participating institutions that are held and managed by firms based in the U.S.
Of that figure, these endowments allocated anywhere between zero and 38.5% to diverse-owned firms, with the University of Washington ranking at the top, with Duke University (33.4%), University of Michigan (29.7%) and Princeton University (26.8%) following closely behind.
Knight defines diverse-owned as a firm for which 50% or more of the equity ownership is held by women and/or racial/ethnic minorities.
The 18 aforementioned institutions were Columbia University, Duke University, University of California System, University of Chicago, University of Colorado, University of Illinois, University of Iowa, University of Michigan, Michigan State University, University of Minnesota, University of Missouri System, University of Nebraska, Princeton University, Rice University, Rutgers University, University of Texas System, University of Washington and Vanderbilt University.
Given the low level of participation, the study cannot fully represent all of the institutions invited to participate, Knight said a news release issued in conjunction with the survey.
“For universities genuinely interested in exploring the full talent pool and ensuring equal opportunities are provided to diverse-owned asset management firms, greater transparency can facilitate discussions based on data,” said Kerin McCauley, director of operations for the Center for Business and Human Rights at New York University’s Stern School of Business, in the news release. “This would help identify which practices are most likely to achieve the outcomes they're aiming for."
Juan Martinez, vice president and chief financial officer of Knight Foundation, said in the release: “Two years of chasing data from top U.S. colleges and universities yielded disappointing participation. With data from half the schools, much of the $566 billion endowment mystery remains unsolved. We still don’t know the extent to which the nation’s wealthiest universities are leveraging diverse-owned firms. Schools hiding this data cannot claim an authentic commitment to diversity.”
Some of the institutions that did not participate in the study nonetheless made comments to Knight. For example, Harvard Management Co., which manages Harvard University’s endowment, said it “has made a concerted effort in recent years to both monitor and increase the diversity of our team, our external asset managers, and the companies in which they invest.”
Yale University stated: “We have long prioritized diversity and belonging at the Yale Investments Office, guided by our DEI (diversity, equity and inclusion) mission statement. Increasing the diversity of our team is a cornerstone of our efforts. 70% of our investment team now consists of women and/or racial/ethnic minorities.”
The Securities and Exchange Commission recently got a low response rate when the agency asked regulated entities such as money managers, investment advisers and broker-dealers to participate in a voluntary diversity self-assessment.
