DAMI Statement: Stanford Takes Steps To Improve Diversity, But Still Has A Long Way To Go
For Immediate Release: January 20, 2022
Contact: Carolyn Clendenin, cclendenin@rabengroup.com, 347-869-7382
Diverse Asset Managers Initiative: Stanford Takes Steps To Improve Diversity, But Still Has A Long Way To Go
Washington, D.C. - This week, the Stanford Board of Trustees approved an allocation of university reserve funds for a new program to invest in diverse asset managers.
Robert Raben, executive director and founder of the Diverse Asset Managers Initiative -- an effort to bolster racial and gender representation in the asset managers industry -- issued the following statement in response:
“Any step to diversify the management of Stanford’s endowment is welcome. This is great news for the up to 10 “diverse-led” small firms that will ultimately receive important funds and validation from SMC.
“The bigger news is that Stanford is responding to criticism of its opacity and likely terrible track record with minority asset managers. We have to say ‘likely’ because Stanford will not release real data on whether and how it works with Black- and Latino/a-run firms.
“And, the premise behind the initiative is itself misdirected. We don’t have a supply problem of emerging minority talent; we have a demand problem. Elite institutions like Stanford won’t seriously focus on the many seasoned and experienced asset management firms owned by women and people of color. And to distract us from that, it has launched an effort to focus on the start-ups.
“If Stanford was interested in the ample supply of talented women and people of color-owned [not just led] asset management firms, Stanford would:
Release precise numbers on the number of Black, Latino/a, Asian-American and Native American managers it relies on. Currently, Stanford only vaguely claims that minority-owned firms manage 37 percent of its U.S. portfolio, but it won’t disclose how particular racial groups are excluded. And this obfuscation is intentional.
Commit to diversity goals for its entire $38B endowment. For example, by 2030, 30 percent of its endowment will be managed by Black, Latino/a, Native American managers.
Give notice to its current 100+ management firms that by 2025 Stanford wants to see Black, Latinx, Asian American, and Native American senior managers on the teams that service the account.
“DAMI welcomes progress, and appreciates that Stanford is acknowledging that it has a problem with the launch of this good program. But there’s still work to do.”
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The Diverse Asset Managers Initiative is an effort to increase the absolute number of, and assets under management by, diverse-owned asset management firms for institutional investors, with specific focus on public, corporate, faith and labor union pension funds as well as foundation and university endowments.