The topic of investing in diverse asset managers has been coming up in investment committee meetings more frequently in recent years. To help provide peer insights, FEG recently conducted a flash poll on sentiment around investing in diverse managers for institutional investors.

slight majority believe diversity is a factor for manager selection

Responses were varied overall, with slightly over half of the respondents suggesting that diversity should be considered in manager selection (52%). However, when looking at larger institutions (defined as those greater than $250 million in assets), the percentage of those that believe diversity should be considered in manager selection jumps to two-thirds of respondents.

should diversity be considered in manager selection?

Should Diversity Be Considered In Manager Selection Chart

Source: FEG. Number of respondents (n)=81



of respondents with more than $250mm in assets believe diversity should be considered when hiring managers.

hiring, or considering hiring, a diverse manager seems to be a growing trend

More than half of the respondents have actively considered or hired a diverse asset manager. Of the 30% of respondents who had hired a diverse manager, the motivation to do so was primarily driven by staff and committee, followed by the manager’s performance. Respondents provided feedback both in terms of the number of managers held, as well as the percentage of diverse manager representation within their portfolios. Some respondents indicated they held from 1 to 8 diverse managers in their portfolios, while others said this number ranged from 10-20% of their portfolio, or approximately 30% of their domestic-based portfolio (by number of managers).

Have you actively considered and or hired diverse asset managers?

Have You Actively Considered And Or Hired Diverse Asset Managers Chart

Source: FEG, n=72


Of respondents who have considered hiring, only 9% do not expect to hire a diverse manager. The majority believe it’s a possibility, and nearly 25% expect to hire a diverse manager.

Those that have not considered hiring diverse asset managers shared a multitude of reasons for this view. Some larger themes that were cited included limited inventory of diverse manages, challenges in defining diverse managers, and on-going conversations with committees about investing in diverse managers. Others still are actively evaluating diverse managers and shared that such investments would be a priority going forward. However, among those who have not hired nor considered hiring diverse managers, a common thread was a stated desire to invest with the best managers, regardless of diversity.


While there is not one metric that respondents identified as the factor in defining a diverse manager, the highest selected metric was related to firm ownership, followed by firm leadership, and then portfolio leadership. Additionally, some respondents look at a combination of these factors, such as ownership and leadership, and others are flexible in their approach, focused on influence, as opposed to solely ownership.


How Do You Define Diverse Managers Chart

Source: FEG. Note, respondents were able to select more than one answer. n=72


FEG measures diversity across three areas – firm ownership, firm leadership, and strategy / portfolio management.

The diversity dimensions FEG utilizes to define “diverse” individuals include those that identify as female, BIPOC, LGBTQ+, veterans, or people with disabilities.

Furthermore, many respondents were also unsure what percentage to use in defining “diverse” managers. Of those that did have a defined metric, the majority utilized a range of 50% - 75%.


What Percentage Do You Use To Define Diverse Managers Chart

Source: FEG. Note, respondents were able to select more than one answer. n=72

FEG utilizes a 40%+ threshold as a starting point to define diverse managers. We have worked with clients with various preferences in this regard; some clients look at greater than 25% representation of diverse individuals, while others use a 50% threshold.

Given varying preferences, this threshold is typically determined through a discussion with clients to determine the best metric for each client.


Many respondents listed their investment advisors and conferences as the best resource for learning about trends regarding diverse managers. Others listed specific organizations such as the Mission Investors Exchange, Racial Equity Assessment Framework, and the CFA DEI Principles.

WHAT types of resources are institutions looking for?

What Types Of Resources Are Institutions Looking For ChartSource: FEG. Note, respondents were able to select more than one answer. n=67



FEG understands that our clients have a variety of reasons for both investing and not investing with diverse managers and we acknowledge the challenges institutions and committees may encounter in building diverse manager portfolios. For those considering adding diverse managers to their portfolios, FEG has developed a discovery survey and additional resources to help gauge interest and determine appropriate metrics specific to your organization. We utilize our diversity dimensions and thresholds, shared above, as a starting point, but have the flexibility to work with institutions to develop custom portfolios and reporting on any threshold an institution may wish to utilize to achieve their mission and investment goals.

In conclusion, as conversations related to incorporating DEI considerations within portfolios continue, FEG is committed to providing on-going education, resources, and flexible approaches to assist institutions in meeting their investment goals and amplifying their missions.


FEG Flash Polls collect data from institutional investors across a wide variety of segments to provide insight on current topics. This poll looked at questions related to sentiment and actions taken related to hiring diverse asset managers, defining diverse managers, metrics used around tracking progress investing with diverse managers, and resources to learn more on the topic. FEG received responses from 82 participants, where 50% of respondents were staff. We would like to thank all survey participants for their contributions and hope they find the results valuable.


This report was prepared by Fund Evaluation Group, LLC (FEG), a federally registered investment adviser under the Investment Advisers Act of 1940, as amended, providing non-discretionary and discretionary investment advice to its clients on an individual basis. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Fund Evaluation Group, LLC, Form ADV Part 2A & 2B can be obtained by written request directed to: Fund Evaluation Group, LLC, 201 East Fifth Street, Suite 1600, Cincinnati, OH 45202 Attention: Compliance Department.

Neither the information nor any opinion expressed in this report constitutes an offer, or an invitation to make an offer, to buy or sell any securities.

This report is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may receive this report.

Published March 2022.