Only one in three of the nation’s 50 wealthiest universities agreed to share data on their use of asset managers with diverse backgrounds to help manage their endowments, according to a new report.
The results are from a
Only 16 of the richest 50 educational institutions agreed to participate in the survey. They collectively hold 54%, or $314 billion, of the group’s total endowment dollars; the 34 institutions that did not participate hold $273 billion in assets. Of the 16 participants, only 12 schools provided asset manager data for independent analysis, while four schools self-reported statistics from their own internal analyses.
Compared to the overall wealth management industry, where nearly 99% of the $80 trillion in assets under management in the U.S. is managed by firms owned by white men, universities that participated in the study showed greater diversity of money managers. According to a 2021 study by the Knight Foundation, only 1.4% of overall U.S.-based assets are managed by diverse-owned funds. In contrast, all 16 of the institutions that participated in this study had more than 5% of their assets managed by diverse-owned funds.
The three largest university endowments in 2021, a boom year for markets, were Harvard University ($51.9 billion), the University of Texas System ($42.9 billion) and Yale University ($42.3 billion),
Among the 12 institutions that provided their asset manager rosters, just two — Princeton University and Duke University — invest more than 20% with diverse-owned firms. Of the four private institutions that self-reported diversity statistics, all except Harvard had over 20% managed by diverse-owned firms, with Stanford using the highest percentage, at 38%.
Minorities and women
Ronald C. Parker, the president and CEO of the National Association of Securities Professionals, a trade organization for minorities and women in financial services, said that while it is “great to have a study, now it’s time to take the insights from the study and put it into practice,” especially to encourage more institutions to share their asset management information.
Parker urged universities to “shed light on the opportunity that exists by being much more inclusive in these types of offerings from an asset management standpoint.”
According to the Knight Foundation’s report, among the 34 institutions that did not share data, 18 declined to participate in the study and 16 did not respond. The foundation’s report called it “disheartening and revealing” that these 34 institutions chose not to take part in the study.
Parker also said “it’s disappointing, to say the least,” that many of the universities that chose not to participate — a list that included Brown University, MIT, USC, and Yale — have worked on developing areas like athletics and research that have helped to build their endowments.
“As I look at some of these universities that I know are part of major athletic conferences, that are part of R1 institutions doing tremendous research, but yet choose not to disclose their engagement with diverse and women-owned asset management firms, it just tells us we have more work to do,” Parker said.
He also noted that universities should be aware that prospective students and parents will also be “doing their research on who’s participating in this area and who’s not” when making decisions on where to attend college. In the end, he said that “peers influence peers,” and hopes that the Knight Foundation will eventually see more engagement and transparency from the 34 institutions.
“We don’t want people to disclose for it to be a punishment,” Parker said. “We want people to disclose because we could possibly share best practices or ideas or solutions on how we might we change this narrative.”
Ashley Zohn, the vice president of Learning and Impact at the Knight Foundation, said the most important part of the recently published report is that the foundation was able to get data from 16 schools. She added that the foundation will continue working on the study and hopes to build enough data to publish a more complete report.
“We’re going to just keep trying to get more universities to participate, but we wanted to make sure to take the moment to highlight and celebrate the ones who did participate and give us a sense of where we were,” Zohn said.
