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Alternative Investment

SBAI and ILPA collaborate on guidance for allocators looking to increase the diversity of their portfolios


Opalesque Industry Update – The Standards Board for Alternative Investments (SBAI), an active alliance of institutional investors and alternative asset managers published new guidance Helping Allocators Increase Diversity in Their Portfolios. The report was produced in collaboration with the Institutional Limited Partners Association (ILPA).

The SBAI and its Culture and Diversity Working Group has previously published guidance on Principles of Culture and Diversity Strategies and Diversity for Smaller Asset Managers as part of their Culture and Diversity Toolbox. ILPA brings together leaders in private equity to share best practices and perspectives on DEI through its growing Diversity in Action initiative and provides resources and tools to help all stakeholders on their DEI journeys-including through its DEI Roadmap and DDQ and Diversity Metrics Template.

Culture and diversity are central to most allocator due diligence processes. But many allocators are now actively looking to increase diversity within their portfolios by allocating to more diverse managers.

Mario Therrien, SBAI Chair and Head of Investment Funds and External Management at CDPQ said: “It is important as allocators that we source the best managers for our portfolios from a wide pool of candidates that must include diverse managers. This SBAI report provides practical steps that can help allocators ensure they are considering diverse managers in their selection process.”

The report explores practical steps that allocators can take to improve the diversity of their portfolio. It starts with the foundations of understanding your risk tolerance and the current level of diversity in your portfolio. It then moves on to ways to expand the networks of the investment team, structural changes that could be made to the manager selection process and a consideration of whether diverse manager programmes are the best way to promote diversity.

Jane Buchan, SBAI Trustee, Global Chair of the SBAI Culture and Diversity Advisory Committee and Chief Executive Officer of Martlet Asset Management said: “Improving diversity within the alternative investment industry is not just important at a firm level, it also needs to be considered from an investment point of view. This report, and the case studies it includes, provides allocators with a great resource to expand their networks and ensure diversity is considered in the manager selection process.”

Maria Long, Research and Content Director at the SBAI said: “This is another example of how we as an industry can take practical steps forward in the area of culture and diversity through collaboration and knowledge sharing in forums such as our Culture and Diversity Working Group.”

“We’re thrilled to see how LPs and GPs are evolving in the ways they demonstrate their commitment to DEI, particularly through their investment strategies,” said Jennifer Choi, ILPA’s Acting CEO. “This report showcases concrete actions that allocators can take to manifest that commitment through deploying capital to managers that embrace diverse leadership and consideration of DEI.”

The SBAI runs a dedicated Culture and Diversity Working Group comprised of almost 100 representatives from both institutional investors and asset managers. It also regularly covers this topic in both its flagship events and small-scale roundtables. The SBAI is an active alliance of over 150 alternative asset managers and 95 institutional investors dedicated to advancing responsible practice, partnership and knowledge. It advocates for an effective alternative investment ecosystem through robust standards and the exchange of ideas.

With more than 600 member institutions representing over 2 trillion USD of private equity assets under management, ILPA is the only global organization dedicated exclusively to advancing the interests of LPs and their beneficiaries. Our members include public and private pensions, insurers, endowments and foundations, family offices, development finance institutions, and sovereign wealth funds. Our policy agenda is focused on strengthening the private equity asset class through strong governance, alignment of interests, and transparency.

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