Further analysis showed no statistically significant difference in performance between diverse-owned firms and their industry peers.In fact, 28.4% of minority-owned mutual funds and 27.8% of minority-owned hedge funds performed in the top quartile. The study, viewed by observers as the most painstaking of its type on ownership diversity within the industry, was commissioned by the John S. and James L. Knight Foundation. “This study, and our experience, confirm that there is no legitimate reason not to invest with diverse asset managers in the 21st century,” Alberto Ibargüen, president of the Knight Foundation, stated.
The study stems from the foundation’s efforts to diversify its endowment investments. The Miami-based foundation has moved $472 million of its endowment-or 22%-to management by women- and minority-owned firms in the past decade, with no compromise on performance.
There are other mega institutional investors that do business with smaller firms. CalPERS (California Public Employees’ Retirement System), the nation’s largest defined benefit pension fund, has Emerging & Transition Manager Programs that are designed to place money, across numerous asset classes, with small-and middle-sized funds. Many times, these funds are minority- and or woman-owned, says spokeswoman Megan White.
The agency’s goal is to identify and place up to $11 billion in new commitments with qualified managers by 2020. CalPERS’ pension fund serves more than 1.8 million members in its retirement system and administers benefits for 1.4 million members and their families in its health program. CalPERS’ total fund market value currently stands at about $323 billion.