Cleaver Calls on Big College Endowment Reps to Increase Diverse Asset Manager

(Washington, D.C.) – Today, United States Representative Emanuel Cleaver, II (D-MO), along with 5 other members of Congress, sent a letter to the National Association of College and University Business Officers (NACUBO) calling for greater diversity among asset managers handling endowment funds of higher education institutions and requesting information regarding the lack of the diversity of such asset managers.

In the letter, the members wrote:

"We were shocked to review the 2018 NACUBO-TIAA study and learn that, of the 802 institutions that participated, only 4 percent affirmatively answered yes to whether their institution has ‘a diversity and inclusion policy for hiring managers'. While the lack of endowment commitment is impossible to attribute to any singular factor—fear and comfort surely play a role—without a central repository for information on endowment diversity, we are concerned that a lack of education about diversity's impact on returns is also at play."

According to 2019 research from the Knight Foundation, of the $69 trillion asset management industry, only 1.3 percent of assets are managed by firms owned by women and minorities. This is despite the fact that women and people of color made up roughly 70 percent of the US population as of 2018. Women and minority-owned firms continue to generate upper quartile investment performance and evidence overwhelmingly suggests that colleges and universities could be a leader in expanding opportunities for diverse managers without negative concessionary return expectations.

"The disparities that exist in the asset management industry are unconscionable, and improving opportunities for diverse managers will go a long way toward equal opportunity and healthy capital allocation in the U.S." said Congressman Cleaver. "The numbers clearly demonstrate that firms with greater diversity outperform their counterparts, and that colleges and universities are in a position to take advantage of this fact. I'm calling on these institutions to take the lead on this issue and demonstrate their support for diversity by utilizing these women and minority owned firms."

"Colleges and universities help to shape, and mold America's next generation of diverse leaders and they should strive to reflect the diversity of their campuses within their own institutions," said Congresswoman Joyce Beatty (D-OH). "It is extremely troubling, that reports continue to find that college and university endowments do not live up to this promise of diversity and inclusion. Congress has given these endowment investments huge tax breaks, and it is unacceptable that minority- and women-owned investment firms continue to be almost entirely excluded from this industry. We must not allow this travesty to go on unfettered."

Other members who co-signed the letter include Reps. Beatty, Marcia Fudge (D-OH), Hank Johnson (D-GA), Gregory Meeks (D-NY) and Terri Sewell (D-AL).

Emanuel Cleaver, II is the U.S. Representative for Missouri's Fifth Congressional District, which includes Kansas City, Independence, Lee's Summit, Raytown, Grandview, Sugar Creek, Blue Springs, Grain Valley, Oak Grove, North Kansas City, Gladstone, Claycomo, and all of Ray, Lafayette, and Saline Counties. He is a member of the exclusive House Financial Services Committee; Chairman of the House Subcommittee on National Security, International Development, and Monetary Policy; member of the Select Committee on the Modernization of Congress; member of the Committee on Homeland Security; and a Senior Whip of the Democratic Caucus. For more information, please contact Matthew Helfant at 202-225-4535 or Matthew.Helfant@mail.house.gov A high-resolution photo of Congressman Cleaver is available here.