New study shows diverse-owned firms represent a small fraction of asset management industry despite equal performance

Miami—Jan. 28, 2019—Firms owned by women and minorities manage just 1.3 percent of assets in the $69 trillion asset management industry, though their performance is not statistically different from the industry as a whole, a new study from Bella Research Group and the John S. and James L. Knight Foundation has found.

The study, led by Josh Lerner, chair of the Entrepreneurial Management Unit and the Jacob H. Schiff Professor of Investment Banking at Harvard Business School, found that firms with substantial (defined as 25-49 percent) or majority (50 percent or higher) women or minority ownership represented just 8.6 percent of the industry’s total number of firms in 2017. That’s up from 7.3 percent in 2016 when Bella and Knight conducted the first major survey of diverse ownership in the asset management industry, an increase the study attributed in part to a wider dataset.

The updated report, Diversifying Investments: A Study of Ownership Diversity and Performance in the Asset Management Industry, found no statistically significant difference in performance across asset classes, even after controlling for risk. In fact, it found that funds managed by diverse-owned firms were overrepresented in the top-performing quartile of mutual funds, hedge funds and private equity.

“Knight Foundation invests in opportunity, whether in our grantmaking or investments. Investing in women- and minority-owned firms is just that, an opportunity,” said Alberto Ibargüen, Knight Foundation president. “This research confirms our experience: Investors can work extensively with women- and minority-owned firms with no compromise on performance.”

Starting in 2010, Knight Foundation, a private grantmaking organization, embarked on an effort to diversify its endowment holdings. As of June 30, 2018, the foundation had invested $830 million with diverse-owned firms, representing 36 percent of its endowment.

“Institutional investors, such as pension and endowment funds, have an obligation to invest their money wisely. This can – and should – include working with women- and minority-owned and managed firms. There is no reason not to do so,” said Juan Martinez, Knight Foundation chief financial officer. 

“While there are some slight positive trends, the number of diverse-owned asset managers is not increasing very quickly. As awareness of this issue increases, and the availability of data on diverse asset managers grows, it is my hope that the pace of change will accelerate,” said Josh Lerner, the Jacob H. Schiff Professor of Investment Banking at Harvard Business School.

Read the executive summary here:

About the John S. and James L. Knight Foundation

Knight Foundation is a national foundation with strong local roots. We invest in journalism, in the arts, and in the success of cities where brothers John S. and James L. Knight once published newspapers. Our goal is to foster informed and engaged communities, which we believe are essential for a healthy democracy. For more, visit To see Knight Foundation’s report on its endowment management, visit:


Andrew Sherry, VP/Communications, Knight Foundation, [email protected], 305-908-2677

* Note: this release was updated on Jan. 30, 2019 to correct that the report was based on data from the end of 2017, not 2018.

Photo by Aditya Vyas on Unsplash