Real estate is lagging other areas of asset management when it comes to diversity, a Redington survey has found.
In a survey of 112 asset managers representing $10trn in assets under management, the consultancy found 94% believe in the importance of diversity and inclusion in investment. However, when it comes to actually considering diversity in their processes, the numbers dropped off.
When it comes to undertaking diversity assessments as part of their investment due diligence and considering gender, 68% of credit managers and 58% of equity managers said they did this. This drops to 44% of private debt managers, 39% of multi-asset managers and just 24% of real estate managers.
Redington said real estate managers scored consistently low across all metrics. Alongside gender at 24%, the next highest metrics being assessed were professional experience (19%), education (14%), age (10%) and race (5%).
Nick Samuels, head of manager research at Redington, said this could be partly explained by the type of assets invested in by this group of managers, with the quality of the land or building likely to take precedence over people.
Firms don’t practice what they preach
The picture remains stark for diversity within asset managers’ own teams, which Redington found to be 78% men and 68% white in the firms they surveyed that actually provided this information.
“If managers say these areas are important to assess when looking at a new investment, why is this not also reflected within their own organisation and processes? The same can be said for the ethnic diversity of teams that include race when researching new investment opportunities,” Samuels said.
These numbers aren’t reflective of the regions they operate in, despite half those surveyed believing so. “The industry acknowledges the crucial role diverse teams can play in being successful. Yet our research suggests the 50% of managers who believe their teams do reflect the diversity of their population cannot provide the evidence to back it up, and that most managers have a lot more to do to genuinely deliver on this ambition,” said Sarah Miller, vice-president at Redington.
“Driving a more inclusive and diverse investment industry requires greater transparency, disclosure and action. This is not only required for us to evolve and progress as an industry; it’s increasingly expected of us by our clients, too.”
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Miller added: “But change isn’t helped by managers telling a more positive story about themselves and the diversity of their teams than is warranted by the data. What’s needed is honesty about the reality of the current situation; only then can we identify and tackle issues in order to make real progress.”