Most asset managers across real assets, private debt, LDI and multi-asset funds are not considering diversity metrics such as gender when researching potential investments, research from Redington has found.

The firm found that, when asked whether they perform diversity assessments as part of their investment due diligence, credit and equity asset managers were the only ones to have over half of respondents say they consider aspects such as race or gender.

On average across all strategies surveyed, 50 per cent of managers said they considered gender, up from 47 per cent in 2020, whilst 37 per cent considered race, up from 19 per cent in 2020.

Meanwhile, a further 38 per cent looked to professional experience and 27 per cent considered age.

Looking more closely at the subsets of asset managers, the research showed that 68 per cent of credit managers considered gender, alongside 58 per cent of equity managers.

However, this fell to 44 per cent amongst private debt managers, 39 per cent amongst multi-asset managers and 24 per cent of real asset managers.

Real asset managers in particular were found to score “consistently low” across all metrics, with 19 per cent considering professional experience, 14 per cent considering education, 10 per cent age, and 5 per cent considering race.

Redington head of manager research, Nick Samuels, suggested that this may be, in part, due to 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.

The research also found, however, that almost all asset managers across all asset classes appear to be recognising the importance of diversity in their own investment teams, with 94 per cent of respondents agreeing that diverse teams have a positive and real impact on their investment processes.

Despite this, investment teams were made up, on average, of 78 per cent men, compared to a financial and insurance services industry population of 59 per cent men.

In addition to this, only 39 per cent of surveyed strategies shared accurate ethnicity information on their investment team, with white employees making up an average of 68 per cent of investment teams.

Despite these figures, 50 per cent of asset managers felt that their current team represented the diversity demographics of the country and region their firm operates within, although Redington suggested that this was not the case, particularly in terms of a gender diversity perspective.

Commenting on the findings, Redington vice president, Sarah Miller, stated: “It’s clear that the industry acknowledges the crucial role that diverse teams can play in being successful.

"Yet our research suggests that the 50 per cent 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.

“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.

“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.”

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