In July, Citywire held three days of discussions with chief executives, chief investment officers and heads of distribution from six European and US asset management groups. We wanted to address key issues facing the fund management industry and identify necessary changes and important next steps.
In the first session, four chief executives discussed diversity and inclusion. This was an honest, engaging and open session. On the subject of LGBT+ rights, it was refreshing to hear one senior executive say: ‘I stand for love, and I don’t mind who finds love, how they find it or where they find it.’
Trust, transparency, respect, recognition and culture were highlighted and discussed.
Asset management groups have come under scrutiny for their diversity and inclusion behaviours by giant US gatekeepers responsible for hundreds of billions of dollars of client money. They want to measure, compare and encourage them to do more. It is a ‘cop out’, according to one gatekeeper, to blame lack of diversity among frontline fund managers on clients not wanting to see change in fund management teams.
To be fair, the fund managers themselves agree and are happy to be measured – and indeed some are ‘benchmarking the heck out of ourselves’, as one put it. Another added: ‘If we’re going to be the judge, we have to judge ourselves.’
There were also voices of caution. One CEO warned: ‘I’m not against metrics. But don’t let the measurement be the God. Our industry has, to an extent, overmeasured ourselves, in that, we’ve missed things like time horizon.’
There was so much rich content in this discussion, which you can watch a short film of here. The full report of this session and the other five sessions in the Citywire Journal of Asset Management can be read here. The full report includes a six-point action plan to improve diversity, which we have also reproduced below.
This was a virtual discussion with the Citywire team in our London TV studio using special mixing software to make it a much richer visual experience.
Taking part in the diversity and inclusion session were:
- Hendrik du Toit, CEO, Ninety One
- Tom Finke, chairman and CEO, Baring
- Hamish Forsyth, president of Europe and Asia, Capital Group
- Erich Gerth, CEO, BlueBay Asset Management
Action plan for improving diversity and inclusion
- Grow your own timber and focus on early-stage hiring. Get the diverse pipeline going from the entry point to the asset management groups. Promote what asset management does as an industry and profession. Every firm should do this, rather than rely on its trade body. There is an opportunity now. The Covid-19 crisis was not borne of finance, but finance can be the solution.
- Allocate capital to areas of need. Work more closely with underserved diverse communities and the companies that work in those communities. This includes charitable contributions where firms need to do more than just write cheques, but also engage with the charities they support. It can include directing charitable contributions that can be channelled towards fighting inequality. Asset management firms as global institutions have the opportunity to allocate capital to areas of the world and help communities there make a living.
- Create a more flexible and fluid work environment to appeal to young entrants in the workforce.
- Very important attributes that leaders must demonstrate and make sure flow throughout their companies include trust, transparency, respect, recognition and creating safe spaces for self-expression. Recognition, not only in terms of feedback or promotions but acknowledging the difference and discomfort of others and creating an environment to alleviate that.
- Measure how you are doing, but measure in a structured transparent way and with context. Don’t turn this into a compliance function.