Big asset managers including pension funds and family offices will soon be able to use a fintech platform to gain easy access to a database of about 900 women and minority investment professionals.
The list of managers was started as a Google spreadsheet by executives for the endowments of the University of Rochester, which oversees about $3.5 billion, and Trinity Church Wall Street, an Episcopal congregation that manages $7 billion. They formed the Institutional Allocators for Diversity Equity & Inclusion, which now has more than 600 members.
The group, which includes representatives from Harvard University’s endowment and hospital juggernaut CommonSpirit Health, is betting that partnering with fintech platform Clade will widen the reach of the open-source database and encourage more entities to invest with their roster of fund managers.
Clade was launched in 2018 by two Credit Suisse Group AG alumni, billing itself as “a private, digital club for the world's most influential investors.”
“We can't be in a Google sheet forever and achieve scale,” said Bhakti Mirchandani, managing director for responsible investing at Trinity Church Wall Street, who started the database in 2020 with colleague Sophia Tsai and the University of Rochester’s Rob Rahbari and Stephanie Westen.
Large institutional investors have made investing with diverse fund managers a greater priority in recent years, but progress has been slow. In the US, women- and minority-owned firms oversee only 1.4% of $82 trillion assets under management, according to a 2021 analysis by the Knight Foundation.
“There's clearly some structural and systematic issues that are at play,” Mirchandani said. “We should be in an end state where no endowment or foundation can say that they can't find” a women- or minority-owned money manager.
The database includes managers overseeing strategies ranging from hedge funds to private equity to venture funds, she said.
Raising money can be costly and time-intensive for new fund managers, who often have to travel to meetings and conferences to make pitches. It can take first-time private equity firms anywhere from four months to five years to close their initial fund, according to Preqin data.
Clade will give fund managers a chance to pitch big institutional investors on their strategy without leaving the office, while also allowing the investing team at a pension or family office to conduct the necessary due diligence virtually, said Jonathan Lipton, the platform’s chief executive officer and co-founder.
“Investors on Clade control trillions of dollars of fire power, and fundraisers from all backgrounds can now directly pitch and tap these massive pools of capital,” said Lipton, who previously led ultra-high-net-worth strategies at Credit Suisse.
This article was provided by Bloomberg News.