Knight Diversity of Asset Managers Research Series
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It started with a tough question and an unacceptable answer.
In 2010, Knight Foundation leadership was asked how much of its multibillion-dollar endowment was invested with diverse-owned firms, meaning firms owned by women and people of color. When we looked at the data and the demographics, the results revealed that we were not living one of our values: our commitment to equitable, inclusive and engaged communities. Today, over one-third of our endowment, or about $1.07 billion, is managed by diverse-owned firms.
Now, as part of Knight’s commitment to increasing transparency and advancing diversity in the asset management industry, we ask that same tough question to others. Since 2017, the Knight Diversity of Asset Managers (KDAM) research series has looked at the state of diversity across the asset management industry. As of 2021, diverse-owned firms represented just 1.4% of U.S. based assets under management. In addition, diverse-owned firms perform at a level comparable to that of their predominantly white, male owned peers.
In 2022, we invited colleges and universities to participate in our research. Knight Diversity of Asset Managers Research Series: Higher Education, Interim Release, shares partial results from our ongoing research into the diversity of higher education’s asset managers, because just 16 of the nation’s wealthiest 50 colleges and universities have provided data for the study so far.
Notably, while there is still more work to be done, the philanthropic sector is outpacing the rest of the financial industry. The percentage of foundation endowments managed by diverse owned firms is 18.1% as of 2022, which greatly exceeds the industry standard of 1.4% invested with diverse owned firms. This group of sophisticated investors, who depend on their returns to fund their social investments, have seen the opportunity in diverse managers and are allocating their money accordingly.
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