NEW YORK – (BUSINESS WIRE) – October 20, 2021–
According to a new report and survey released by Morgan Stanley, while a large majority of pension funds say that including gender and race diversity in investment decisions can be financially beneficial, more than the half of asset owners globally say they think they have to choose between financial gain and a diversity approach. This disparity suggests that many asset owners remain skeptical about the financial return on investment of diversity, with the exception of public pension funds which set the standard for action, according to survey data.
To better understand how asset owners incorporate diversity into their investment priorities and the selection of external managers, Morgan Stanley conducted an inaugural survey of large U.S. asset owners and facilitated additional interviews with executives from pension funds. 1
âToday we released results that shed light on a misconception that still exists among asset owners – that incorporating diversity into their investment decisions comes at the expense of returns,â he said. said Carla Harris, vice president of Morgan Stanley and general manager of the Multicultural Client. Strategy Group. “This report is part of Morgan Stanley’s strategy to increase equality in the investment landscape and hopefully encourage more shareholders to recognize the benefits of a value-based approach to investing. diversity.”
The results reveal four key ideas among asset owners:
Diversity is a top priority for investment decisions.
- 89% of asset owners say the diversity of external managers in particular is important or a top priority
- 67% say their organization has a policy that integrates diversity as part of an ESG requirement when making investment decisions
The perceived financial compromise is an obstacle.
- 56% of asset owners agree they must choose between financial gains and incorporate diversity into their investment decisions
- There is a significant perception gap based on race and ethnicity: 70% of white asset owners agree versus only 35% of multicultural asset owners
Public pension funds lead the way.
- 63% of owners of public pension fund assets say their organization always includes diversity issues in its due diligence processes when deciding whether or not to invest with an external manager, compared to 30% of other owners of pension funds. ‘assets
- 47% of public pension fund asset owners say diversity of investment teams has always been a priority for their organization, compared to 7% of other asset owners
Need for greater accountability.
- 43% of asset owners use a formal metrics tracking system to keep tabs on their external managers’ progress on their D&I goals
- 38% of asset owners say they always ask diversity questions in their due diligence processes when deciding whether or not to invest with an outside manager, and 49% say they sometimes ask
âContinuing to share data-backed evidence of the financial benefits of a diversity-based approach with the entire asset owner industry will help dispel inaccurate investment beliefs with a D&I mindset and to motivate further progress, âsaid Seema Hingorani, Managing Director of Morgan. Stanley Investment Management. âI hope this report will help inspire more shareholders to reassess their standardization practices in order to formally monitor the progress of external managers in achieving diversity goals.
The results of the survey are presented in Asset Owners and Investing in Diversity: Intention versus Action, Morgan Stanley’s first survey and report of asset owners to better understand their views on the role of diversity in their decisions. investment and the choice of external managers. The report presents the Morgan Stanley Handbook for Asset Owners which describes prescriptive steps the industry can take to highlight the tangible benefits of a diversity-based approach to investing.
The survey was conducted by Brunswick Group between January 12 and April 28, 2021 in the United States and interviewed 63 senior investment decision makers, mainly from public pension funds, college or university foundations, companies insurance and investment advisory firms. To qualify for the survey, respondents must work for organizations that have at least $ 500 million in assets under management (AUM). Additional interviews with senior pension fund executives were conducted from June 15 to July 16, 2021 in the United States.
The full report and survey results can be viewed online here.
About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing investment banking, securities, wealth management and investment management services. With offices in more than 41 countries, the firm’s employees serve clients around the world, including businesses, governments, institutions and individuals. For more information on Morgan Stanley, please visit www.morganstanley.com.
Morgan Stanley Investment Management is the asset management division of Morgan Stanley.
ESG strategies that integrate impact investing and / or environmental, social and governance (ESG) factors may cause the relative performance of investments to deviate from other strategies or broad market benchmarks, depending on whether these sectors or investments are favorable or unfavorable in the market. Therefore, there can be no assurance that ESG strategies could result in a more favorable return on investments.
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1 The survey was conducted online and via telephone interviews with leading investment decision makers mainly from public pension funds, college or university foundations, insurance companies and corporations investment advice.
See the source version on businesswire.com: https://www.businesswire.com/news/home/20211020005763/en/
Media Relations: Katherine Stueber, Katherine.stueber @ morganstanley.com
KEYWORD: UNITED STATES NORTH AMERICA NEW YORK
INDUSTRY KEYWORD: FINANCING OF PROFESSIONAL SERVICES
SOURCE: Morgan Stanley
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PUB: 10/20/2021 11:00 a.m. / DISC: 10/20/2021 11:02 a.m.
Copyright Business Wire 2021.