Wilshire Shares Latest Results, Key Lessons from Its Diverse Owned Manager Initiative

Report underscores investment consultants’ role in improving equity and inclusion for diverse managers

SANTA MONICA, Calif.--()--As part of a continued effort to create opportunities for diverse owned asset management firms, Wilshire released a report today outlining the 2020 results of its ongoing Diverse Owned Manager Initiative. The report highlights progress, opportunities for improvement and key lessons associated with increasing access to institutional investment mandates to promote industry diversity, equity and inclusivity.

“We established this initiative in 2018, when it was already clear the financial services industry had room for improvement in terms of diversity, equity and inclusion. In 2020, awareness of this issue was amplified and deepened,” said Jason Schwarz, President and Chief Operating Officer of Wilshire. “This annual reporting initiative is one way we are holding ourselves accountable for helping progress opportunities for asset management firms owned by diverse professionals. We are eager to share what we’ve learned to help push ourselves and the industry toward greater progress.”

Progress: Mandates Increasingly Awarded to Diverse Managers

Across all manager searches supported by Wilshire from 2018 – 2020, the total number awarded to diverse owned firms nearly doubled (10% to 13% to 18% in 2018, 2019 and 2020, respectively), and the inclusion rate of diverse owned firms remains stable at just under half of all searches. In 2020, 44 searches were conducted, and of those searches, 20 included a diverse owned manager, resulting in eight diverse owned manager mandate wins. Wilshire also found that when diverse owned managers are included in the search, the mandate win accelerates (22.2%, 26.7% and 40.0% in 2018, 2019 and 2020, respectively).

To further promote access for diverse managers, Wilshire uses a proprietary software application, Wilshire Compass, offering opportunities for inclusion within the Wilshire Investment Database. Within this database, Wilshire’s diverse manager committee has identified 144 viable diverse owned firms, up from 134 in 2018.

In 2020, 34.7% of Wilshire’s discretionary and non-discretionary client base placed assets with diverse owned managers, an uptick from 22.7% and 19.8% in 2019 and 2018, respectively. Diverse owned firms represent 9.9% of Wilshire’s database and manage 1.7% of Wilshire’s assets versus the industry average of 1.3%.

Challenges: Decrease in Diverse Manager AUM

While interest in diverse owned managers remains high, the number of clients investing with diverse owned managers and the assets under management by diverse firms remain low. The percentage of Wilshire’s client assets invested with diverse owned firms declined from 2.3% of assets in 2018 to 1.8% of assets in 2019 to 1.7% of assets in 2020. While above the industry average (1.3%), this underscores that decision-makers need to be engaging more with diverse owned firms and Wilshire is continuing to educate stakeholders about the value proposition of working with diverse managers.

“While Wilshire continues to improve in its efforts to elevate the platform of diverse owned managers, there is more work to be done. With an industry average of only 1.3% of assets managed by diverse managers, we have an opportunity here to continue going above and beyond to help managers increase their assets under management. Wilshire is committed to continue raising the profile of diverse managers, highlighting diversity and inclusion in the investment community, and most importantly, exposing clients to that diversity,” said Schwarz.

Key Lessons

  • Accountability is Paramount to Progress. Investment decision makers and the clients they support should hold themselves accountable by closely tracking changes year over year. Just as data drives investment decisions, it should influence how programs are run.
  • Transparency Drives Improved Results. Regardless of a mandate outcome, diverse managers should receive transparent feedback. This exchange of information allows for growth and a more balanced playing field when the next opportunity arises.
  • A Commitment to Engagement Creates Opportunity. The best way to forge deeper relationships, understand diverse managers’ strengths and create the right opportunities for them to succeed is to meaningfully engage them in dialogue. When the national lockdown impacted Wilshire’s annual in-person meetings with diverse owners, the firm pivoted to virtual engagements. This created stronger connections and allowed consultants to meet with more managers than any prior year.
  • Incentives Work. In an environment where competition for hours and attention is high, incentivizing teams to make meaningful connections with diverse owned asset managers is extremely effective in driving change.

The full report can be found here.

About Wilshire

Wilshire Advisors LLC (Wilshire®) is a leading global financial services firm, dedicated to improving outcomes for investors worldwide. An independent firm since its founding in 1972, Wilshire advises on over $1.3 trillion in assets and manages $87 billion in assets. Specializing in innovative investment solutions, consulting services and multi-asset analytics, Wilshire serves more than 500 institutional and intermediary clients worldwide from 10 offices around the globe.

Please visit www.wilshire.com for more information.
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Lisa Herbert


Lisa Herbert