He’s hopeful U.K. industry can finally address racial injustice

Dawid Konotey-Ahulu is optimistic that the U.K. investment industry is finally facing up to the fact that it needs to address racial injustice.

The May death of George Floyd by police has opened the door to conversations, with money managers and institutional investors waking up to the roles they need to play in order to effect change.

"We are in the middle of a movement for social change. These movements come along every now and again — we've seen them before," he said.

London-based Mr. Konotey-Ahulu, who is well known in institutional investment circles as co-founder of investment consultant Redington Ltd. and pension fund online community Mallowstreet, has been calling on money managers to "talk about Black" for years, posting his first call to action on YouTube in 2018.

But his calls have largely gone unheeded. "The industry until now … has not been on top of this particular issue. It has talked about it, it has danced around it, it's brushed up against it. It's had the conversations at some level — but it somehow never made it," he said. "George Floyd has changed everything. It's impossible to ignore it anymore."

Social movements have spilled over into the investment industry before, Mr. Konotey-Ahulu said. He cited the self-immolation of Mohamed Bouazizi in Tunisia in 2010 in response to corruption and ill treatment by police, which led to protests and spurred the Arab Spring; American actress Alyssa Milano's 2017 tweet that went viral and energized the global #MeToo movement; and Swedish climate change activist Greta Thunberg's protest in 2018, as key triggers over the years. And on May 25, Mr. Floyd's death marked the beginning of another movement.

"All of these I see as these butterflies that flap their wings and they trigger a hurricane on the other side of the world," he said.

And now is the time for racial injustice to be addressed, specifically through the lens of Black inequality, Mr. Konotey-Ahulu said.

Mr. Konotey-Ahulu is part of the team behind an initiative launched in August that asks investment and retirement firms to commit to doing better to promote Black talent, called #100blackinterns.

Aimed at addressing the chronic underrepresentation of Black professionals in investment management by driving change from an early point, the initiative asks money management firms, pension funds and consultants to offer paid internships to a Black candidate starting next summer. As Pensions & Investments went to press, around 115 firms had signed up and almost 700 graduates had applied for internships.

Mr. Konotey-Ahulu worked with Jonathan Sorrell, president of alternatives firm Capstone Investment Advisors LLC; Michael Barrington-Hibbert, founder and managing partner of executive search firm Barrington Hibbert Associates; and Wol Kolade, managing partner of private equity firm Livingbridge EP LLP; to develop the program.

The executives hope the initiative will address a set of shocking statistics: A June 2019 report by the Investment Association, which represents U.K. money managers, said less than 1% of investment managers are Black, "even though people from this ethnic background make up ... more than 13% of London, the city housing the lion's share of the U.K. investment management industry." And for a 2018 study considering diversity in portfolio management by think tank New Financial LLP, researchers came across only 12 Black London-based portfolio managers.

Mr. Konotey-Ahulu is amazed at the response to the initiative.

When he and others approached firms to get involved, the answer was "yes, yes, yes, yes, yes," he said. "And I don't think this would have happened even this time last year."

Reaching a critical mass of recruiting more than 100 firms is important. "We are trying to make seismic, systemic change so people don't sit back and go 'where are all the Black people?' either in the firms at all or at senior management level. That's really hard to achieve … especially in an industry that sort of looks at things the way they are and says, 'it kind of works, why would you try to fix something that's not broken?'" Mr. Konotey-Ahulu said.

Firms need to think about the change afforded by the #100blackinterns initiative in the same way that a soccer club develops players.

A player "didn't just turn up on the day fully formed — (a club) will have … nurtured and guided him all the way through. You've got to put in the hours. There's an academy system (in sport) — we need to start thinking like that," Mr. Konotey-Ahulu said.

But the work cannot stop at hiring interns for six weeks. That's where Mr. Konotey-Ahulu's work on the advisory board of the Diversity Project — a group of leaders in investment and savings working toward an inclusive culture — comes in.

The project, which is split into sections covering LGBTQ, gender and other issues, recently renamed its Black, Asian and minority ethnic section as Talk About Black. It looks at "the different kinks in the hosepipe, including progression, and … how we can deal with those.".

The project is engaged with senior management on what they need to do to attract, progress and promote Black people within firms.

"With all these things, first of all, there has to be the wake-up call, the mea culpa … which I think the industry has gotten itself to." Mr. Konotey-Ahulu gives presentations on Talk About Black, covering issues including white privilege — "the simple notion that you have an unearned advantage that means when you as a white woman walk onto the tube, you don't get beaten up by the cops the way a Black woman did. You're never at risk of being stopped by the cops and being shot. It's an unearned advantage that comes solely because of the color of your skin," he said.

He has described white privilege to money management CEOs as a collateralized debt obligation structure. "You've got different tranches of white privilege," he said. A CEO is in the "super senior tranche of white privilege … and you have super senior responsibility — it sits at your door. You are the person or people that need to make change happen," he said.

Mr. Konotey-Ahulu has his own stories. One dates back to 1987 when, as a young barrister in the City of London, he was looking for his next internship, which would typically morph into a permanent role.

Following an interview he was told by his pupil master — an experienced barrister who works with trainees — that the law firm liked him and wanted him to spend six months with them, but on the understanding that he would not be offered a role because they "hired a Black guy last year."

Mr. Konotey-Ahulu completed the training and then moved into finance, joining NatWest Markets as a derivatives lawyer before switching to asset and liability management. He then joined Merrill Lynch, where he implemented the first full liability-driven investment deal with a defined benefit fund in 2003, before founding investment consultant Redington in 2006 with his Merrill Lynch colleague, Robert Gardner.

"I was never the victim of overt racism in the city — I got promoted and I got paid in line with my peers as far as I know," he said. But he did negotiate and navigate the landscape "and figured out what I'd need to do to make the whole thing work."

He puts his navigation and negotiation techniques down to growing up with a Black father and white mother, and understanding how to "code white, which is what you need to do."

Outside of money management, Mr. Konotey-Ahulu works to promote and help to develop Black voices and encourage young people to reach their full potential. He founded Spellbound!, a program that teaches young people public speaking skills — a course that Redington employees go through and that Mr. Konotey-Ahulu has also taken into a U.K. prison; he is a member of the board of trustees of The Chineke! Foundation, a professional British orchestra and the first in Europe to comprise majority Black and minority ethnic musicians; and he is on the University of Hertfordshire's board of governors.

Overall, Mr. Konotey-Ahulu is optimistic that things can change. He thinks executives are ready to listen, act and make change.

And "the Black community has to get itself ready for the journey, of entering these firms, hitting the ball out of the park (and) showing we can be as good as anybody else," he said.