Another plan sponsor that has increased its commitment to diverse managers is the $98.5 billion Massachusetts Pension Reserves Investment Management Board, Boston.
As of Sept. 30, the board had $7.6 billion in WMDV-owned manager assets, up from $4.4 billion a year earlier.
In May, the board launched FUTURE Initiative, with the goal of bringing the pension fund's exposure to emerging and diverse managers to at least 20%, a goal set by a bill that Massachusetts Treasurer and MassPRIM Chairwoman Deborah B. Goldberg spearheaded and Gov. Charlie Baker signed into law in January 2021.
"Regardless of whether a manager is considered diverse or not, PRIM follows a manager selection playbook that utilizes both quantitative and qualitative analysis to select the best manager for PRIM," Deputy CIO David M. Gurtz said in an email. "The FUTURE Initiative focuses on helping PRIM widen our pipeline of diverse managers as well as reduce barriers with the new emerging-diverse manager program."
Mr. Gurtz said he believes a large base of diverse managers helps the board ensure it has broad diversity of thought among its managers.
Angela Miller-May, CIO at the $54.9 billion Illinois Municipal Retirement Fund, Oak Brook, echoed those sentiments in a phone interview.
"It is really just about having differentiated thought and decision-making around investments," Ms. Miller-May said, "and I think one way to get there is through increased diversity, and that's kind of our rationale and how we've thought about or approached diversity and equity."
As of Sept. 30, IMRF reported $12.1 billion in assets managed by WMDV-owned managers. Most of those assets are direct relationships with managers, with a small percentage in manager-of-manager programs.
"If there is a need in the portfolio, we can source our managers from the manager-of-manager program without conducting a request for proposal process," Ms. Miller-May said.
Among the top 200 U.S. retirement plans with a defined benefit plan, 28 said they have a hiring policy for WMDV-owned managers, up from 27 responses the year before. Five of the 28 plans that have a hiring policy did not indicate they had one for the 2020 survey period.
Callan's Ms. Mathias said while a number of clients have already implemented changes to their investment policy statement to address diverse managers, most are in the beginning of their processes.
She compared the momentum of hiring diverse managers to the discussion of ESG investing, which has only seen significant implementation in recent years.
"I feel like we're on the precipice of that happening from a diversity standpoint," Ms. Mathias said. "An asset owner needs to have an approach of what they think about diversity, how it will affect their investment program, and have verbiage behind it. I think we're not there yet, but I think that's going to be something that's going to be relevant for the future."
"This is not just a phase," Raytheon's Ms. Diamonte said. "(Managers are) going to have to be held accountable for going into the future."