The request was part of a larger push to improve diversity and inclusion reporting in the investment industry.
Representatives Maxine Waters of California and Joyce Beatty of Ohio included the two big private equity players among a list of 31 investment managers who received the letter. A sample of the letter was also posted online at the website of the House of Representatives Financial Services Committee, which Waters chairs and of which Beatty is a member.
Other managers who received the letters and have alternative or private equity programs include Fidelity Investments, Franklin Templeton, State Street Global, Morgan Stanley, Invesco and Goldman Sachs.
The representatives, both Democrats, asked the companies to comply with a federal standard that encourages, but does not require, regulated entities to share diversity data and policies with the Offices of Minority and Women Inclusion. The office was created with the passage of the Dodd-Frank financial reform act passed during the Obama Administration.
“We are making progress to ensure a comprehensive understanding of diversity and inclusion performance in the financial services industry,” the representatives wrote. “However, this cannot be achieved until organizations, especially the largest investment managers, disclose their diversity data and policies.”
Waters and Beatty requested the firms answer an attached questionnaire by April 30.
While providing the information remains voluntary, Beatty also is taking steps to change that. At a March 18 hearing for the Subcommittee on Diversity and Inclusion, which Beatty chairs, she said more than 80 percent of regulated entities had failed to share any data.
“By any measurement, the voluntary self-assessment of diversity and inclusion performances by regulated entities has failed to meet the spirit and intent of the statute,” Beatty said.
The day of the hearing, Beatty introduced the Diversity and Inclusion Data Accountability and Transparency Act, which would make that section of the Dodd-Frank law mandatory. If passed, it would require any entity with 100 or more employees to provide any information the director of the Offices of Women and Minority Inclusion would require.
While private equity has better diversity numbers than some other asset classes, the numbers are still not commensurate with the overall population, as Buyouts has reported. LPs and GPs alike are beginning to take steps to improve those numbers, but Beatty feels requiring the reporting of diversity numbers is the best way to move the needle.
“What gets measured, gets done,” she said at the March hearing.
“Institutional investors go to painstaking efforts to hide their data, in an attempt to avoid public scrutiny over their clear biases and discriminatory practices. This is absolutely ludicrous,” Robert Raben, executive director of the Diverse Asset Managers Initiative, said in a statement last month. “Data enables us to have a clear picture of what’s happening now, and what needs to be done going forward.”
BlackRock declined to comment for this story. Last week, the firm’s global heads of human resources and diversity, equity and inclusion sent out an internal memo announcing an “external review” of how the firm’s strategy in that department is working among shareholders and in the communities where the firm operates. The review will begin next year, once the firm’s “enhanced DEI strategy” is finished. The memo was first reported by Bloomberg.
Through a spokeswoman, Blackstone said building diversity was a priority for the firm and multiple efforts were underway, including expanding its recruiting pipeline and setting diversity targets for boards across its portfolio companies. Affiliate title Private Funds CFO recently reported on these efforts.
The firm said it planned to complete and return the questionnaire.
“We look forward to engaging with the committee on this,” the firm said.