Just 1.3% of the investment industry’s $69 trillion in assets under management is managed by women or people of color, according to Bella Research Group and the John S. and James L. Knight Foundation 2019 study “Diversifying Investments: A Study of Ownership Diversity and Performance in the Asset Management Industry.”
To address this, Prudential Financial Inc. has made a $200 million commitment through the Prudential DEI Portfolio to private equity investments constructed with a diversity, equity and inclusion lens, which will focus on limited partner stakes with substantial ownership and/or management by women and minorities.
“Our goal in managing the DEI Portfolio is to provide equity of opportunity for segments that often face challenges in the fundraising process, while also maintaining the rigorous investment standards we’re known for,” said Cherrise Cederqvist, vice president at PGIM Investments, the global asset management business
“Ultimately, we expect the investments made through the DEI Portfolio to result in greater representation and increased assets under management for women and minority-owned investment firms over time,” said Cederqvist, who is leading the DEI Portfolio program.
The DEI Portfolio Investment Steering Committee, led by a diverse group of executives across Prudential and PGIM, will govern future investments and evaluate funds based on specific factors including diversity of fund management ownership, diversity of the portfolio management team and impact of the investment strategy on diverse populations, according to an Aug. 19 announcement.
“We are committed to meaningfully developing and growing women and minority managers by ensuring the selection process is equitable and inclusive across the full spectrum of early and late stage funds,” said Lata Reddy, senior vice president for Prudential’s Inclusive Solutions organization, in a prepared statement. “By providing intellectual and financial capital, and by serving as an advocate for this segment, we are seeking to break down the structural barriers that prevent diverse-led teams from raising capital.”i