Majority of investment industry remains ‘Anglo-Celtic and male dominated’

Heavyweight Australian investors back a new workplace diversity initiative as LPs admit the issue is a factor in their investment decision-making.

A new initiative has been launched in Sydney to improve gender diversity among investment managers, with a host of superfunds and GPs pledging support.

The Future IM/Pact initiative was launched this week and is driven by investment consultant Mercer and its partners AustralianSuper, Cbus Super, Future Fund, HESTA, Magellan, Mercer, NAB Asset Management, Pendal, QIC, and Wavestone.

It will initially target university students by educating them about how investment management careers can have an impact on the world, as well as providing access to mentoring programmes, networking events and internships.

The Mercer-led initiative follows research conducted by the consultant in 2016 which found that 76 percent of investment managers were male and that female finance students were 50 percent less likely than their male counterparts to consider a career in investment management. It also found that female investment managers were 30 percent less likely to be promoted through the ranks and are up to 50 percent more likely to leave the sector than men.

In a statement, Hesta CIO Sonya Sawtell-Rickson said: “We believe that diversity adds value to investment decision-making (as supported by research) and that our investment partners should harness the power of diversity in their investment processes. This is why we have started a conversation with our investment managers about the diversity of their teams, and the strategies they are undertaking to improve diversity.”

This echoes comments made by Chicago Teachers’ Pension Fund CIO Angela Miller-May in June, when she revealed that a deficit in workplace diversity contributed to Blackstone Group and Brookfield Asset Management being passed up for a $50 million asset allocation in favour of IFM Investors and Ullico Investment Advisors.

According to a statement, Mercer’s learning and inclusion practice leader, Yolanda Beattie, said a growing number of industry leaders recognise their ability to build high-performing teams depends on attracting and valuing diverse talent, but the majority of teams remain very Anglo-Celtic and male dominated.

“This initiative aims to change that status quo by taking the long view and building our future talent pipeline from the ground up,” Beattie added.

Speaking at the initiative’s launch in Sydney on Monday, Cbus Super CIO Kristian Fok said that “doing the same stuff and expecting a different answer” would not solve the problem, and that investors needed to change their hiring practices and approaches to retention to improve diversity.

Also speaking at the event, Pendal chief executive Richard Brandweiner linked increased workplace diversity to improving the image of the industry to outsiders. He said: “This [issue] is so important, because a lot of the traits that come with diversity, things like empathy or emotional intelligence, are going to be absolutely critical in helping our industry rediscover its purpose.

“There is a fundamental purpose of finance, and it’s good. And as we embrace more diverse workforces, we’ll be able to realise that more quickly and deliver better outcomes.”

The Future IM/Pact initiative has launched with an online portal. Mercer encouraged organisations interested in offering sponsorship or mentoring opportunities for students to come forward.