By Aziza Kasumov of FundFire
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Princeton University’s endowment chief Andrew Golden is launching a pilot diversity mentorship program, the latest in a string of efforts by the investment industry to address significant gaps in female and minority representation.
The program, which will start accepting applications on Aug. 1, aims to select 50 people, ranging from high school students to mid-career investment professionals, a spokesman for the university confirmed. They will connect with Golden, who has been sitting at the helm of the university’s now $26 billion endowment for almost 25 years, for a one-time only mentorship session.
The launch of the program was first reported by Bloomberg.
Princeton has been ramping up its diversity efforts in the past months, explicitly looking to add minority and female-owned managers to its roster, as reported. The endowment, for instance, has recently hired its first black-owned asset manager, 645 Ventures Management, and its second female-owned manager, Forerunner Ventures.
Investment consultants have also adopted techniques to find and add more diverse managers to their platforms. They’re following a growing trend of institutional investors, such as private foundations and pension plans, pushing for a more diverse slate of managers in recent years.
The numbers, however, still point to large gaps in representation. In 2018, asset management firms owned by women or minorities oversaw just about 1.1% of more than $74 trillion in assets in the U.S., according to a study by the Diverse Asset Managers Initiative.
“Part of it is a pipeline problem,” says Meredith Jones, partner and head of emerging and diverse manager research at Aon Hewitt, although “it’s not the full answer to the problem,” she adds.
University endowments, sitting at the crossroads of education and investment, could be in a unique position to address the problem, according to Jones.
On one hand, she explains, schools can give their students a small slice of their endowment to manage, as some universities do, to provide them with exposure to basic investment skills. On the other hand, as asset owners, they can address the issue from the demand side by pushing for diverse manager inclusion.
However, research from the Graduate Management Admission Council, which administers GMAT, the most commonly used exam for placement at American graduate business schools, shows that women still make up only about 40% of test takers in the U.S., even though most undergraduates in the country are women. The report did not break down U.S. GMAT takers by ethnicity.
“We need to get women early, before they make other graduate school decisions,” says Karen Kosiba Edwards, partner at executive search firm Boyden.
Firms may have to drill down further, targeting students before they enter college, Jones adds, citing research which shows that most women start opting out of a field that would direct them toward asset management at as young as age 11.
Mentoring diverse candidates interested in the investment industry, even if they’re only in high school, on could help, even if it’s just one meeting.
“It could be pivotal and make a huge impression,” Edwards says, adding that she hopes Princeton’s program will “inspire other schools to do similar things.”
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