A GROUP of UK pension funds and investment consultants, that collectively oversee more than £ one trillion in assets, have warned asset managers to tackle the lack of diversity in their workforce or risk losing clients, reports said on Sunday (1). The group, under a new charter, is demanding its members to include factors such as gender and ethnic mix while handing out contracts of asset management.
The group members, including some big names like Brunel, Nest, RPMI Railpen, West Midlands Pension Fund, Lothian Pension Fund, and London CIV, have reportedly banded together to form the Asset Owner Diversity Working Group, demanding that its signatories will take account of diversity and inclusion records from fund managers when choosing new partners, reports said.
Fund managers wanting to work with these clients will have to disclose information on how they tackle diversity and inclusion within their workforce, Financial Times reported.
Asset managers have been outspoken about the need for companies they invest in to increase diversity and have been campaigning to end all-male boards while the sector itself has repeatedly been dubbed “pale, male and stale”.
The Investment Association, the UK trade body for asset managers, found in a research that fewer than one per cent of UK investment managers are black, reports said.
Welcoming the charter, Helen Price, stewardship manager at Brunel Pension Partnership said that asset managers needed to be “more representative” of savers.
“Progress in the investment industry has been very slow. Despite numerous initiatives, we are still seeing a lack of diversity,” Price said, adding that information about race, age, ethnicity, sexuality and socio-economic backgrounds are “not being consistently collected in a way that equips the industry to identify barriers and make meaningful progress”.
Under the charter, diversity questions will form part of the overall assessment score for each fund manager when they are bidding to win a new contract, or mandate, to manage money. This means they will have to disclose information about the diversity of their workforce, something which many have been reluctant to do in the past, reports said.
A research last year by Willis Towers Watson, the investment consultancy, looking at more than 2,400 individual investment teams around the world, had reportedly found that diverse groups outperformed those with no gender or ethnic minority employees.
Lakshmi Mittal (left) with his son Aditya Mittal Eastern Eye 
