Asset management firms owned by Asian Americans and Pacific Islanders accounted for only 2.4% of all such firms in the U.S. and a microscopic 0.3% of all assets under management at these firms as of 2022.
These were some of the findings highlighting the under-representation of AAPIs at the senior level of the asset management industry in a report issued on Oct. 16 by the Association of Asian American Investment Managers in partnership with Bella Private Markets.
AAAIM's 2020 report that found that AAPIs owned 3.5% of asset management firms and managed 0.7% of AUM.
AAAIM cautioned that its "methodological approaches have evolved over the last few years; therefore, direct comparisons against the 2020 AAAIM report should be made with caution." In addition, the databases on which the report is based "are regularly updated by each commercial data provider, a process that involves both the addition of new data and, in some cases, the revision of old data." For example, some funds may be retroactively tagged as minority-owned, some may be reclassified based on ownership changes, and firms may be removed if they have not recently reported updated information.
In 2022, AAPIs owned 5.4% of all hedge funds (the highest such figure for AAPIs), but only 0.3% of all real estate funds (the lowest such figure).
AAPI-owned firms accounted for 2.9% of all venture capital AUM (the highest such figure) and only 0.2% each of all real estate AUM and public equity AUM (the lowest figures).
However, performance at AAPI-owned firms was often superior to the overall industry. The report noted that AAPI-owned funds outperformed their non-AAPI peers across most asset classes studied, especially in private equity, venture capital and hedge funds on a capital-weighted average basis.
For example, almost one-half of AAPI-owned private equity funds were in the top performance quartile; while more than 50% of AAPI-owned venture capital funds ranked in the top quartile of performance.
In addition, AAPI-owned hedge funds yielded monthly returns of about 0.5%, well above the 0.19% monthly returns of their non-AAPI-owned peers, the report indicated.
"AAPIs face daily challenges as a result of being associated with the 'model minority' stereotype, which perpetuates the notions that AAPIs are over-represented in the financial-services industry and that AAPIs are good workers but not assertive leaders," the report stated. "AAPI women report even greater barriers to advancement due to a combination of unconscious bias — related to gender, ethnicity and age — and exclusion from career-growth programs for minorities."
The report recommended that "the asset management landscape requires restructuring in order to grow ownership representation among AAPIs."
AAAIM is a nonprofit organization dedicated to increasing diversity and inclusion in the investment management industry. Bella focuses exclusively on providing solutions to the challenges facing the private capital industry.
