Commentary: Asset management industry must honestly address racial biases

I am an African-American woman, a Stanford University graduate and co-founder of an asset management firm. I have spent the majority of my 20-plus year career working with minority- and women-owned business enterprises firms, raising assets for and/or providing strategic advice to help them grow. Having held senior positions at private equity firms, hedge funds and publicly traded banks, I have listened to my fair share of panel discussions about diversity, capital access and the "accomplishments" of public pension plans that have allocated capital to minority asset managers. I am expected to applaud these efforts. But why?

Recently, I have seen statements from numerous institutions pledging support to black and brown communities — attempting to acknowledge the racial injustice that exists in this country. While I appreciate their commitments, it is gratuitous at best. Before another member of the asset management community issues a statement regarding diversity and inclusion, I ask you to think deeply about what you are writing, why you are sending it, and why it took the public killing of an unarmed black man and nationwide protests for you to publicly raise your voice in support.

Today, minority firms manage less than 1% of the assets of a trillion-dollar industry. If the asset management industry really wants to address its racial biases, let's cut through the platitudes and have an honest dialogue.

I am here to start that discussion.

Your clients, a large portion of which are U.S. public pension plans, receive contributions from brown and black public workers, and yet rarely do you place capital with minority-led firms. Your panel discussions on diversity and increased pipelines of MWBE managers have not translated into significant allocations. There is a call to support black and brown businesses and it should not exclude asset management. Remind your clients of this call and who their beneficiaries are and join forces to commit to doing a percentage of your business with minority firms. Bottom line: You measure results for a living, and included in that exercise should be a self-assessment.

Before you send another email addressing diversity to your staff, perhaps look at your staff demographics. Do you employ more than 5% of minorities? Do you maintain effective mentorship programs for your minority employees so they can move up the ranks in your organization? A simple online search of senior management at the majority of asset managers illustrates a homogeneous group of white men. This lack of diversity is not acceptable given a significant component of the capital you manage comes from black and brown people.

There are many qualified minority-led asset managers. Many of these firms have top-decile performance. Some have even been able to grow despite the racial barriers that exist. If you want to address racial equality, start by committing to:

1. Hiring a diverse staff over the next three to five years.
2. Mentoring and supporting minority rising stars.
3. Providing anchor capital to top minority performers with entrepreneurial aspirations.

Bottom line: White men are not the only group that can properly invest capital and asset managers should invest in others and watch your performance improve.

Remember who you represent, discuss the makeup of your workers/beneficiaries and decide how that could translate into allocations to minority-led asset managers. Then, increase the dollars invested with minority managers (and not solely in your emerging manager programs). They can manage more capital. Allow them to do so. Furthermore, think twice about allocating to managers that resist change, and either can't or refuse to answer your questions regarding racial equality. Bottom line: There are many firms to which you can allocate; choose to allocate to those that "get it."

Let us help ourselves. According to studies including one by the W.K. Kellogg Foundation, African-Americans are the most generous of ethnicities regardless of economic status. And asset managers give in ways and amounts that transform lives in black and brown communities. Just ask institutions with large benefactors like Morehouse College (Robert Smith), Spelman College (Frank Baker) or the University of Chicago (John Rogers) where recycled profits have uplifted the spirit of black and brown children in ways we need more of today.

Bottom line: If asset management industry participants are really committed to supporting the black and brown community, you must rewrite the "norm" and allocate capital to minority asset managers. When black and brown people can breathe, we can all breathe.

Carrie Pickett is co-founder of Blueprint Capital Advisors, Newark, N.J. This content represents the views of the author. It was submitted and edited under P&I guidelines but is not a product of P&I's editorial team.