Diversity, equity and inclusion (DEI) investment strategies 

We have extensive experience researching and advising on diversity, equity and inclusion (DEI) investments. We can work with you to define what diversity means for your organization, integrating it into your portfolio and investment decision-making process. We can help you enact positive change while helping you achieve your business goals.

DEI investing is high on investors’ agendas 

As part of a wider strategy to invest sustainably, integrating a DEI lens into your decision-making process allows you to align your portfolios with your organizational mission and values. It also positions you to achieve long-term sustainable returns and help drive change that could ultimately benefit us all.

Research shows that organizations exhibiting strong DEI credentials perform better. It's clear that a more diverse, equitable and inclusive work environment boosts innovation.

DEI is an important consideration in any sustainable investment strategy, but key challenges remain. Performing all aspects of the investment process takes significant resources. In particular, it takes time to identify and gain access to the best DEI managers. This is where we can help.

Our proprietary research and deep analysis of DEI issues launched in 2007. Today, our approach in this area is designed to unearth the most compelling opportunities that will best suit your goals while promoting positive change. No matter where you are on your DEI investment journey, we can help you define what diversity means for your organization. We can also show you how to integrate it within your portfolio and investment decision-making process.

Drivers behind the rise in DEI investments*

29%

More than 29% of women-owned private equity firms are top-quartile performers.

34%

More than 34% of minority-owned private equity firms are top-quartile performers.

19%

Companies with higher-than-average diversity achieved 19% higher innovation revenues.

35%

Companies in the top quartile for racial/ethnic diversity are 35% more likely to surpass their peers.

15%

Companies in the top quartile for gender diversity are 15% more likely to surpass their peers.

Common challenges associated with DEI investing 

This involves finding and investing with managers who have the potential to deliver quality outcomes while meeting meaningful DEI goals. Our research team's global scale allows to work with clients to source and connect with managers aligned with your overall DEI and financial objectives.

The market is moving towards increased diversity in portfolios. Institutional investors therefore have an opportunity to embrace this shift and capture the opportunities it offers. We provide research, advice and solutions that can help you achieve your unique governance-model goals and investment objectives.

We believe building a balanced portfolio that includes strong, diverse managers at all stages of their development (including emerging managers and more established managers) has the potential to generate attractive risk-adjusted returns.

Manager selection is a critical component when building a portfolio, but with hundreds of diverse managers in the market today, making a choice can be overwhelming. Our robust sourcing, manager research and due diligence process could help you identify those managers that we believe will consistently and continuously outperform their peers.

Three steps to integrate DEI into your investment portfolio

No matter where you are on your DEI journey, we can assist you in creating a plan to help achieve your goals.
  1. Define what diversity means to you
    Diversity means different things to different investors, so the first step is to define what it means to you. We can help you understand the potential benefits and challenges linked to different DEI qualifiers. This will ensure your policy supports the direction you want to go without being too cumbersome or limiting to your portfolio. For example, some clients focus solely on the composition of a firm’s ownership, while others include the composition of key decision makers.
  2. Build a process and plan 
    Step two is to define clear DEI investment goals, and the processes and procedures needed to support these goals. This often requires making changes to investment policy statements. For example, some clients use an actual percentage goal for capital committed to DEI managers, whereas others use broader guidance. It's also important to establish measurement mechanisms to evaluate and understand your progress towards your DEI goals.
  3. Implement your plan
    There are hundreds of diverse-led funds in the market today. We conduct ongoing research to help you quickly understand the market, and we help you create customized searches to identify opportunities that fit your specific DEI criteria. Our dedicated DEI researchers provide curated manager expertise to help ensure you can execute your investment plans.
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* Source: The Knight Foundation. As of January 2019 | Ownership defined as 50% of equity or more; minorities defined as Hispanic, Black, Asian and Native American.