A new report published by Management Leadership for Tomorrow (MLT) profiles the Kresge Investment Office’s progress in its efforts toward a more diverse, equitable and inclusive asset management industry. The research notes that although women and ethnic minorities represent 70% of the U.S. population, only 1.4% of U.S.-based assets were managed by women and minority-owned firms in 2021.

In Pursuit of Alpha by Investing in Diverse Fund Managers explores the strategy Kresge has developed to counter the underrepresentation of women and people of color in the industry. Its authors, MLT program participants Norquata Allen, Ayo Elkhator and Daniel Herrera, studied the foundation’s strategy and documented its motivation, components, implementation and rate of success.

In 2019, Kresge’s investment office formally pledged its commitment to diversity, equity and inclusion (DEI) through its “25% by ‘25” initiative – a commitment to intentionally direct 25% of the foundation’s U.S. assets to be managed by diverse-owned firms by 2025. The initiative also includes methods to recalibrate how the foundation recruits investment office talent and champions DEI initiatives within the financial industry.

To date, 20% of Kresge’s U.S. assets under management, or $360 million, are invested with diverse-owned firms. The foundation has also increased diversity on its internal team and has led industry efforts to increase DEI awareness and transparency within the asset management field.

Management Leadership for Tomorrow is a national nonprofit working to transform leadership pipelines of Black, Latinx, and Native American professionals. The program equips students, early- and mid-career professionals with the skills, coaching, and networks they need to excel in high-trajectory careers, secure economic mobility for their families, and become high-impact senior leaders equipped to advocate for vulnerable communities.