Client exposure to diverse strategies is climbing, finds a new report by investment consultant and outsourced chief investment officer (OCIO) provider NEPC.
Its latest report, the NEPC found that 59% of its clients use diverse managers, with diverse firms currently investing $40.4 billion in client assets and managing 182 client strategies. Currently, NEPC serves over 400 retailer clients and $1.4 trillion in total assets.
The NEPC defines “diverse firms” as diverse-owned or diverse-led: the first being at least 50% owned by underrepresented groups, and the latter at 33% to 50% ownership by marginalized communities.
NEPC also found that its diversity, equity, and inclusion (DEI) program is on track to achieve 15% diverse manager representation in its public market strategies by 2024, with the NEPC seeing 13% representation so far in 2022. Its OCIO division saw 10% of diverse manager exposure in 2022 and is on track to achieve 15% by 2024.
In its workplace diversity highlights for 2022, NEPC reported 26% racially diverse hires and 38% gender diverse hires, with 45% of new hires being diverse based on gender, ethnicity or race.
NEPC’s report also provides effective methods to grow DEI initiatives and strategies within firms, including having DEI advocates in positions of influence and driving discussions throughout organizations.
“As the conversation around increasing diversity in the investment space continues to evolve, so must our goals and how we’re thinking about DEI standards,” said Mike Manning, managing partner of NEPC, in a statement. “We are proud of what we’ve accomplished thus far, but NEPC is aware of the work that remains, and is committed to identifying meaningful ways to continue engaging with diverse-owned and -led firms.”
For 2023, NEPC anticipates the new release of its DEI rating system, modeled partly on its ESG ratings. The updated rating system is expected to examine DEI standards for the workforce, portfolio management, governance, policies, and community impact, to uncover biases and create more nuanced insights into diversity initiatives, NEPC wrote in its report.
More insight on the NEPC’s DEI Progress Report can be found here.
SEE ALSO:
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
