Virtually all assets under management in the U.S. are still managed by white, male-owned or led investment firms despite women making up more than half the population and non-white-identifying people counting for nearly half the population, according to a new study commissioned by the John S. and James L. Knight Foundation.
Based on the report's findings, only 1.4% of the $82.24 trillion in U.S. assets were managed by investment managers owned by women and/or people of color as of Sept. 30. This has remained the same for roughly a decade, with there being only a 0.1% increase in AUM entrusted to diverse-owned asset management firms (meaning, firms that are minority-owned, women-owned, or both) since 2011.
The data sampled comes from 31,763 investment funds from 10,008 firms.
Of the 4,812 private equity firms sampled, 5.1% were minority-owned and 7.2% were women-owned. Meanwhile, 9.2% of the 2,704 mutual funds were minority-owned and 6.7% were women-owned; 1.8% of the 1,542 real estate investment firms were minority-owned and 2.8% were women-owned; and 9.3% of the 950 hedge funds were minority-owned and 2.8% were women-owned.
Of the U.S.-based AUM managed by diverse-owned managers, 4.5% of private equity assets are managed by minority-owned firms, while 1.6% are overseen by women-owned firms; 3.4% of hedge fund assets (2.2% women-owned); 1% of real estate assets (1.7%); and 0.4% of mutual funds (0.8%).
The report also found "no statistically significant differences in performance between diverse- and non-diverse-owned funds."
"With each generation more racially and ethnically diverse than the last, it is notable how much that diversity is not represented in our financial sector," said Alberto Ibarguen, president of the Knight Foundation, in a news release announcing the research.
Despite most assets in the U.S. being managed by white, male-owned firms, the report notes that representation is increasing "in terms of number of funds, number of firms and amount of AUM, particularly in the past five years." Plus, the quality of data — including the more systematic reporting of private equity diversity data — has improved in recent years, which the authors of the report believe reflects an increased focus on this issue.