The investment industry is being urged to promote more black women and build anti-racist investment portfolios in order to tackle systemic discrimination in the sector. Less than 1% of investment managers are black.
Black Women in Asset Management (BWAM) – a group of 300 industry professionals in England and Wales – has written to investment firms asking them to go beyond “solidarity statements” with the black community, following Black Lives Matter protests sparked by police violence and the killing of George Floyd in the US in May.
BWAM – which was formed in 2019 and includes investment professionals, lawyers, consultants, administrators and advisers – said the industry had primarily focused on increasing the number of women in the sector. “This agenda, however, has largely excluded black women. Racial issues are often perceived as too abstract, polarising, or political,” the open letter read.
It is now urging companies to take five broad actions, including: expanding the pipeline of young black women entering investment careers, promoting black women to senior leadership roles, and ensuring company investments do not disadvantage black communities.
A report released last year by the Investment Association industry body found that fewer than 1% of investment managers were black, despite making up 3% of the UK population and more than 13% of the population in London, where most of the UK’s asset management firms are based.
The letter said firms needed to create apprenticeships, given that the rising costs of university can deter students from diverse backgrounds, and recruit junior staff based on “more than just the traditional markers of success, which are often biased”. The group recommends looking at the circumstances that led to the student’s grades, university acceptance or work experience when hiring.
“Also, recruit from schools beyond the Oxbridge and redbrick universities and consider the promising students at other schools,” the letter said. Once hired, black women should also be offered tailored progress plans that include coaching and mentorships that would give them a fairer chance at reaching senior leadership roles, BWAM said.
It is also asking firms to build “anti-racist” portfolios by setting metrics to measure companies’ commitments to racial diversity and their impact on black populations. That will also involve divesting from firms that benefit from business models that perpetuate racial inequalities or target vulnerable communities such as prison labour, immigration detention or surveillance technology.
“Investment firms have been slow to see racism as a serious investment risk,” said Jacqueline Taiwo, co-founder of BWAM and associate general counsel at the investment firm TowerBrook Capital Partners. “Our letter sets out actions I believe will lead to progress and give black women a greater voice in shaping investment decisions.”
Karis Stander, who works for the Investment Association’s careers service Investment 20/20, said: “The industry is already taking steps in the right direction, through Investment 20/20 we’ve seen almost 150 black young people take part in our one-year trainee programme and have recently set up a cross-industry mentoring initiative for senior black executives. There is, however, always more that can be done to ensure our industry is a place where black people feel welcome and can flourish.”
It comes as the CBI announced 18 new signatories to its Change the Race Ratio diversity campaign, including ITV, the drinks giant Diageo, accountancy firm PricewaterhouseCoopers and education specialist Pearson. Signatories are asked to publish their ethnicity pay gaps and set actual targets for the ethnic diversity of their executive and senior management teams within 12 months of signing up.