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A recent study by the Harvard Business School and Bella Research Group analyzing diversity within ownership of U.S. asset management shows that women and minorities have been significantly underrepresented in mutual funds, hedge funds, private equity and real estate between the years 2011 and 2017. However, the report also notes that diversity does not have a noticeable effect on performance.
The aim of the research, conducted by Josh Lerner, a professor at Harvard Business School and the Bella Research Group was to give a characterization of ownership diversity of U.S. asset managers, examine how diverse ownership affects financial performance and study the institutional investors that invest with diverse managers.
According to the report, the value of global assets under management was $69.1 trillion in 2016. Of those assets management firms, 136 firms are women-owned which manage a total of $430 billion—9.9 percent of firms and 0.8 percent of total industry assets under management. Minority-owned firms comprise 120 firms and $191 billion in assets, representing 8.8 percent of total firms and 0.4 percent of total industry assets.
- Women-owned and minority-owned firms make up a low percentage of firms under asset management, and they make up an even smaller portion of total number of funds and total assets under management.
- Regarding performance, funds with diverse ownership perform at a comparable level to firms with non-diverse ownership.
- There has been an increasing trend of diverse-owned firms being represented in hedge funds, private equity and real estate in recent years.
- Lack of data is the biggest barrier to research on diverse ownership or management since most data providers to not track diversity in the asset management industry in a systematic way.
Learn more by reading the full report here.