Research

The American Investment Council and PitchBook released a new report highlighting how private equity contributes to the American economy and drives competition. The report – Building Competition: How buy-and-build helps the American economy – explores the industry’s buy-and-build model, which investors use to acquire several smaller companies to create a new, more competitive business.

The CFO and COO have left a lasting imprint on the private equity industry. Now, as the industry approaches maturity, it’s time ask the question: what will be their legacy? Over the past 10 years, the EY Global Private Equity Survey has followed the evolving impact financial executives have had on a rapidly growing industry. Our 10th annual survey reflects on the hurdles CFOs and COOs have had to surmount over the past decade and looks ahead to forecast the role these executives will play in shaping the future of the industry.

McKinsey & Co. recently released “The state of diversity in global Private Markets: 2022,” a report that offers insights into diverse representation in the industry and institutional investors’ evaluation of diversity on investing deal teams.

This Goldman Sachs study focuses on the entrepreneurship gap of Black women, some of the core broader economic and social factors driving it and implications for earnings, wealth and economic mobility.

Illumen Capital and Stanford University conducted an online experiment with actual asset allocators to determine whether there are biases in their evaluations of funds led by people of color, and, if so, how these biases manifest.

The events of 2020 have impacted how institutional investors think about diversity (gender, race, LGBTQ, etc.) in their investment portfolios. Against this backdrop, Aon conducted a survey of institutional investors that revealed increased pressure from boards and beneficiaries to address diversity in their portfolio. This report examines the potential challenges associated with diverse investing initiatives, as well as the reasons why investors pursue diverse investing initiatives, current trends in institutional investor diversity policies/programs, potential components of diverse investment programs, how diversity is defined and the pros and cons of those definitions, and more.

The NVCA–Deloitte Human Capital Survey was designed to capture critical data on the workforce at venture capital (VC) firms, develop a baseline understanding of demographics within the VC industry, and uncover the current state of diversity and inclusion (D&I) across the industry. The survey is intended to be an educational resource for venture capital firms to understand how to expand the diversity of their teams and portfolio.

The Knight Foundation and Global Economics Group recently published “Diversity of Asset Managers in Philanthropy,” a study that assesses the representation of diverse asset managers among 26 of the top 50 foundations in the US. Among the report’s findings are that $8.62 billion (13.5%) of the $63.95 billion in endowment investments overseen by these foundations are invested with diversely-owned firms (women- and racially or ethnically diverse-owned investment firms). The report also found that the average foundation invests 13.3% of its assets in diversely-owned firms, 10.8% in women-owned firms and 9% in minority-owned firms. The median foundationinvests 13.5% in diversely-owned firms, 10.9% in women-owned firms and 7.9% in minority-owned firms.

Research across a multitude of fields and industries has identified the potential economic and social benefits of diversity. Yet the asset management industry continues to struggle with a lack of diversity. Research studies and articles have consistently documented the low level of representation by women and racial/ethnic minorities among asset managers. Analyzing and exploring diversity in the asset management industry is vital given its sheer enormity and the wealth it generates ($69.1 trillion in assets under management and $99 billion in profits in 2016).

The Diverse Asset Managers Initiative (DAMI) recently released its Second Annual Investment Consultant Survey. The survey provides great insight into the underrepresentation of women and racial or ethnic minorities at some of the largest investment management consulting firms in the United States and how it contributes to an extremely low engagement of diverse asset managers by many retirement plans.