Wilshire’s 2021 Diverse-Owned Manager Initiative Report Shows Growth in Number of Diverse Mandates Awarded

Report finds number awarded to diverse-owned firms has doubled over three years

Santa Monica, Calif., November 2, 2022Wilshire today released the 2021 results of its ongoing Diverse-Owned Manager Initiative, highlighting the firm’s commitment and progress to furthering to diversity, equity and inclusion in manager searches as well as a commitment to improving diversity in its workplace. The report showed the total number of mandates awarded to diverse-owned firms has doubled from 10% in 2018 to 21% in 2021, while the inclusion rate of diverse-owned firms in manager searches also continues to increase.

“At Wilshire, we strive to create an inclusive environment that is as diverse as our global community,” said Jason Schwarz, President. “We believe that diversity in all its forms leads to better business outcomes, and we’re committed to diversity, equity and inclusion both in our workplace and in the asset manager searches we conduct for our clients. The 2021 report details our progress in both these initiatives as we continue to hold ourselves accountable in helping progress opportunities for diverse-owned managers and our employees.”

“We have a responsibility to our employees, clients and stakeholders to be a positive force in creating a more diverse, equitable and inclusive world,” said Leah Emkin, Chief Client Officer. “Over the past several years, we have been increasingly transparent in our own diversity, equity and inclusion initiatives, both internally and externally. As we seek to create an internal environment where everyone feels respected and valued, it is important to lead by example, detailing our progress year-over-year towards a more diverse workplace and investment management landscape.”

Report Highlights

The 2021 report showed:

Inclusion Rate Increased – The inclusion rate of diverse-owned firms in manager searches increased to 56% of all searches after remaining stable at just under half of all searches from 2018-2020

Number of Clients Investing with Diverse Managers Grew – Over three years (2018-2021), the proportion of Wilshire clients investing with diverse-owned firms grew from 20% to 39%

More Diverse-Owned Managers Highly Rated -- The number of diverse-owned firms and products rated in the top four deciles, the minimum rating to be short-listed for a search, grew by double digits from 2018-2021.

Hybrid Work Does Not Slow Manager Engagement – While the pandemic impacted managers’ abilities to meet in person, Wilshire reaffirmed its commitment to meeting with and evaluating diverse-owned managers by increasing its proactive outreach efforts and conducting one-on-one virtual meetings.

Key Takeaways

Transparency – Feedback is critical no matter the outcome of the mandate, and it is important to provide transparent feedback throughout the evaluation process, an essential element of reinforcing strengths and remedying weaknesses of diverse-owned managers to improve outcomes.  

Connection – While remote and hybrid work environments have been a headwind to connecting in-person, firms must adapt and meet managers where they are – whether it be in-person or virtually, to ensure meaningful engagement for both diverse-owned managers and clients/consultants.

Next Steps

“Now in its fourth year, Wilshire’s Diverse-Owned Manager Report reaffirms our pledge to continue to raise the profile of diverse-owned managers among our clients and consultants, and proactively engage with the diverse-owned manager community,” added Joanna Bewick, CFA, Senior Vice President, Portfolio Manager. “Broadening the investment manager opportunity set is not only beneficial in principle, but diversity also maximizes the talent pool and increases the likelihood of capitalizing on investment opportunities in an increasingly global and diverse world. The investment consulting industry has a duty to improve equity and inclusion for diverse managers, and as we look ahead, we will continue to report on our progress in elevating diverse-owned managers and the opportunities to further refine and evolve our initiatives.”

In 2021, Wilshire expanded the scope of the diversity initiative to incorporate diverse-owned alternatives managers within private markets. Next steps for the program include:

• Retaining diverse talent via focused management of inclusivity

• Measuring future progress in diversity at all levels of the organization against the baseline established by the annual report

• Expanding disclosures to include Manager Research meeting hours

• Increasing the number of diverse-owned firms and strategies rated by Manager Research with attention to asset classes where representation is challenged

• Incorporating data on the diversity profile of the firm (in addition to ownership) as a dimension of the manager research evaluation

• Continuing to educate Wilshire’s client base on the value proposition of diverse-owned firms

The full report can be found here.

About Wilshire

Wilshire offers a wide range of discretionary and advisory multi-asset class and alternative investment solutions, market-leading indexes, and investment decision support tools. Founded in 1972, Wilshire advises on $1.3 trillion and manages $84 billion in assets. Wilshire serves more than 500 institutional and financial intermediary clients from 10 offices around the world.

More information on Wilshire can be found at www.wilshire.com

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