SCOTUS Affirmative Action Ruling Does NOT Preclude Allocators from Seeking Out, Working with Best Talent

The Supreme Court’s recent decision on race-conscious college admissions has led to discussions within the asset management industry, in part on how emerging manager programs will be impacted, as well as how firms will be able to track and report data on their diverse asset managers. 

The response is not a surprise in an industry where women and people of color face long-standing systemic barriers. From the Diverse Asset Managers Initiatives perspective, while the attacks on affirmative action are sad, they as a matter of law should have zero bearing on whether allocators should be seeking to work with the best talent, which is often women and people of color.

Fortunately, we are not left without a path forward. In 1996, California state and local government affirmative action programs were banned in the areas of public employment, public education, and public contracting. Despite California's ban on affirmative action, institutional investors, like the University of California system, LACERA, Alameda County and so many other public entities have continued to make diversity among their asset managers a priority.  

Understanding that the Supreme Court’s decision may continue to have a chilling effect in the asset management industry, we would like to share a California Assembly Report that outlines what diversity efforts are still permitted within public procurement despite the ban on affirmative action.  

We hope you find this information helpful.

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