Asset Management Industry Severely Lacking Diversity, New Knight Foundation Study Finds; Signals Untapped Opportunity For Investors – Knight Foundation
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Asset Management Industry Severely Lacking Diversity, New Knight Foundation Study Finds; Signals Untapped Opportunity For Investors

Knight-commissioned research reveals only 1.4% of more than $82 trillion dollars of U.S.-based assets is entrusted to diverse-owned firms 

MIAMI – December 7, 2021 – The John S. and James L. Knight Foundation released a new study today measuring diversity in the U.S.-based financial industry revealing that only 1.4 percent of assets are entrusted by investors to asset management firms owned by women and/or people of color, despite diverse-owned firms’ investment performance matching those of their less-diverse peers. Across the $82.24 trillion in assets studied in the report, nearly all are managed by white, male-owned or -led companies, according to Bella Private Markets, which conducted this new research, the third in a series designed to monitor trends in the industry.

The report, the latest in the Knight Diversity of Asset Managers (KDAM) Research Series, is part of Knight’s commitment to increasing transparency and advancing diversity in the asset management industry. Examining four segments of the industry – mutual funds, hedge funds, private equity funds, and real estate funds – the new study reveals that diverse-owned firms remain severely underrepresented relative to other firms. Previous reports found similar disparities in industry representation, with the percentage of assets under management by diverse-owned firms barely changing over the past decade.

“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 Ibargüen, president of Knight Foundation. “The U.S. asset management industry is a cornerstone of our economy. Diverse communities are the future of our society and therefore of our economy. By diversifying who manages our nation’s wealth, we can build a more equitable and prosperous future.”

The United States is an increasingly diverse society: Women make up more than 50% of the population and non-white-identifying people now make up more than 42% of the population, with that share growing every year, diversifying even faster than predicted. Yet, the great diversity of the U.S. population is not adequately reflected in the opportunities of our financial system.

This disparity in representation is massive. To put it in perspective, the percentage of assets managed by diverse-owned firms compared to the entire industry is almost equivalent to the GDP of Mexico ($1.19 trillion) compared to the aggregate GDP of all countries on the planet ($84 trillion).

This new study continues to confirm trends identified in Knight’s two previous reports, including the following:

  • The research affirms for a third time in four years that there is no statistically significant difference in the performance of these diverse-owned asset management firms and their peers. The investment performance of firms owned by women and people of color is empirically indistinguishable from majority white, male-owned or -led firms.
  • The percentage of diverse-owned assets under management (AUM) grew over the past five years, but not by much. Diverse-owned management firms’ AUM increased from 1% in 2016 to 1.4% in 2021.
  • Taking a longer view, not much has changed over the past decade. There has been only a 0.1% increase in AUM entrusted to diverse-owned asset management firms since 2011.
  • The amount of assets managed by diverse-owned firms still pales in comparison to that managed by their less-diverse peers: nearly 99% of all assets under management remain in the hands of white, male-led firms.
  • Diverse-owned firms manage fewer, smaller funds than their non-diverse peers.

“Investing wisely requires planning for future possibilities – assessing risk and anticipating opportunities that are unforeseen,” said Juan Martinez, Knight Foundation chief financial officer. “Diversity in who manages your assets is just as important as the diversity of what you invest in. Managers with different backgrounds, viewpoints, and experiences can often better identify investment opportunities that other managers might overlook. Given their investment returns, diverse-owned firms represent an untapped opportunity for investors. It’s time to ask why more investors aren’t putting their money in the hands of more-diverse asset management firms.”

“Asset management builds wealth and enables investment in innovative opportunities for entrepreneurs and new businesses” said Josh Lerner, the Jacob H. Schiff Professor of Investment Banking at Harvard Business School and founder of Bella Private Markets. “But equal representation across the industry lags far behind the demographics of our society, despite increased attention toward diversity. This research continues to illuminate the extremely uneven distribution of asset management firms by race and gender and the slow progress toward a more-diverse investment landscape.”

To learn more about the Knight Diversity of Asset Managers Research Series, click here.


About the John S. and James L. Knight Foundation
We are social investors who support democracy by funding free expression and journalism, arts and culture in community, research in areas of media and democracy, and the success of American cities and towns where the Knight brothers once had newspapers. Learn more at and follow @knightfdn on social media.

Contact: Briahnna Brown, (t) 202.525.7531, (e) [email protected]