In This Newsletter
ICAP in Action
HBCU Strategic Initiative and Fellows Program
ICAP News and Trends
ICAP in Action
Troy Duffie, associate director for MI Finance’s Inclusive Capitalism Program, spoke at the New York Alternative Investment Roundtable 2023 Summer Social & Mid-Year Investment Outlook in late June, hosted at Grant Thornton LLP’s midtown Manhattan conference center. The event featured asset managers, policymakers, asset allocators, and other financial professionals discussing distressed credit, diversity, equity and inclusion, and sustainable development goals. Program speakers included Ronald C. Parker, National Association of Securities Professionals’ president and CEO; Deepika Sharma, global head of manager selection, BlackRock; Bhakti Mirchandani, managing director of responsible investing at Trinity Church Wall Street, and co-founder and steering committee member, Institutional Allocators for Diversity, Equity, & Inclusion; and Bruce Richards, co-managing partner and the CEO of Marathon Asset Management.
Continuing to build relationships with the venture community, Duffie served as a judge in the 2023 CityBridge Ventures Showcase pitch competition. CityBridge, the private family office of Katherine and David Bradley, funds CityBridge Education, an education incubator that seeks to create better models of schools in Washington, DC. CityBridge residents received customized curriculum, coaching, connections, and capital that supported and accelerated the design and implementation of their education ventures.
Duffie also discussed the economic and social impact historically Black colleges and universities (HBCUs) have as a participating panelist on the Unlocking Social Returns on Investments in HBCUs LinkedIn Live event, hosted by ImpactAlpha. Duffie spoke alongside ImpactAlpha’s editor and CEO, David Bank; former CEO of The Plug, Sherrell Dorsey; Atlanta Journal-Constitution reporter Mirtha Donastorg; JFFLabs managing partner Taj Ahmad Eldridge; and Tuskegee University Board of Trustees member Carla C. Whitlock. Duffie highlighted the Milken Institute HBCU Fellows program’s ability to strengthen core financial skills needed to be competitive in the industry, and Cohort Fellow Benjamin Chombe was invited to share his experience in the program. Duffie further emphasized the importance of connecting with HBCUs beyond the focus on talent and partnering with them on endowment strategy in terms of scaling impactful investment.
HBCU Strategic Initiative and Fellows Program
HBCU Fellows Secure Summer Internships
In February, the Inclusive Capitalism Program (ICAP) officially launched the HBCU Strategic Initiative Fellows Program, an initiative to foster an inclusive asset management industry where high-performing, diverse entry-level talent from HBCUs are prepared for jobs in asset management. As highlighted by Pensions and Investments, we are proud to share that each of our 16 inaugural cohort fellows received competitive internship and fellowship offers for the summer season. Read about our fellows and their internship programs here.
Milken Institute and World Bank Group Collaborate on HBCUs
The HBCU Strategic Initiative is expanding internationally. We are excited to announce a new partnership with the World Bank Group that aims to expose HBCU fellows to the programs, events, and career opportunities the World Bank Group offers. World Bank Group president said, “As we recognize the huge challenges facing development, the exchange of people, ideas, and skills will be vital. The World Bank Group is building partnership platforms globally that connect educational institutions and people. This expanded partnership with the Milken Institute will create new avenues for collaboration.”
Milken Institute CEO Richard Ditizio commented, “This MOU [memorandum of understanding] is a natural extension of the work we’ve done on DEI broadly and with communities of color and HBCUs specifically. We welcome partnerships such as this to further implement our work and thinking around these issues.”
Milken Institute Engagement with HBCU Partner Schools
Duffie spoke at the Howard University PNC National Center for Entrepreneurship’s inaugural HUxPNC Black Commerce Conference: The Future of Entrepreneurship, an annual event dedicated to scaling, growing, and elevating Black entrepreneurship. At the conference, he spoke on the panel “The Future in Color,” which covered policy reform, collaboration between diverse stakeholders, and principles of sustainable and impact investments.
Duffie also judged the EMERGE: HBCU PitchFest at Morgan State University, an event hosted by Venture for T.H.E.M. and The BFM Fund, alongside sponsors Virginia Venture Partners/VIPC, and gener8tor. The event awarded cash prizes to the winners.
ICAP News and Trends
Executive Council Member Firm Closes at $3 Billion
The Milken Institute DEI in Asset Management Executive Council member firm Davidson Kempner Capital Management announced the close of its sixth opportunistic/special situation fund at $3 billion. Executive Council member and President and Managing Director Eric Epstein celebrated the close, remarking, “The close of this fund is a testament to the strength of our teams and the depth of our client relationships, particularly against the backdrop of a challenging fundraising environment. Now our investment teams are focused on sourcing compelling public and private market investment opportunities across the globe.” The Davidson Kempner Opportunities Fund VI will invest in less liquid, longer-duration situations arising from capital dislocations, motivated sellers, and substantial asset or structural complexity, as highlighted in Alternatives Watch.
The Supreme Court Decides on Affirmative Action
In late June, the United States Supreme Court addressed two cases that challenged affirmative action in higher education: Students for Fair Admissions, Inc. v. President & Fellows of Harvard College and Students for Fair Admissions, Inc. v. University of North Carolina. In both cases, the Supreme Court struck down affirmative action programs as violating the Fourteenth Amendment’s Equal Protection Clause and Title VI of the Civil Rights Act of 1964. Speculation that the SCOTUS decision could impact diversity initiatives beyond higher education were confirmed when 13 attorneys general sent a letter to Fortune 100 companies threatening “serious legal consequences” over diversity policies. Concerns were renewed when the conservative activist behind the US affirmative action cases sued the venture capital firm Fearless Fund.
Our commitment to this work is impact-focused—but has always been backed by data. Less diverse capital markets are less efficient for asset owners, managers, entrepreneurs, and customers. Providing the best next steps through heavily researched strategies inclusive of every background progresses toward the end goal of capitalism—efficiently allocating resources to the most efficient performers.
Inclusive Higher Education Endowment Management Legislation Reintroduced
In June, Representative Emanuel Cleaver and Senator Cory Booker reintroduced the Endowment Transparency Act to bridge the gap between the performance, availability, and opportunity provided to diverse-owned asset management firms pertaining to college and university endowments. The legislation would provide public transparency and accountability for diversity and inclusion in managing more than $807 billion in assets from higher education endowments.
The act calls for:
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Amending the Higher Education Act of 1965 to require information about investments with women- and minority-owned firms to be included in annual data collection.
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Requiring a published report from the Minority Business Development Agency every two years with legislative recommendations and best practices for increased investments into diverse-owned firms.
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Authorizing a conference every two years to build a better investment ecosystem between diverse-owned firms and higher education institutions.
Read more on the Endowment Transparency Act of 2023.
Little-to-No Progress on Diversity, Equity, and Inclusion at the Investment Consultant Level, According to a Recent Report
A recent report published by the Diverse Asset Manager Initiative finds slow progress on diversity, equity, and inclusion (DEI) efforts at several of the largest investment consulting firms in the United States. Investment consultant firms play an integral role within the industry by advising on who manages the assets of a university, foundation, public pension, or corporation. Lack of diversity at the investment consultant level often indicates the relatively small number of diverse-owned managers that receive investments from allocators. Despite the spotlight on DEI challenges within the industry, change is slow.