Investors as agents of change in the alternatives space

Institutional investors maintain the highest levels of gender balance. What practices or aspects of hiring and retention do you believe put institutional investors in that position?
Firms are deploying various methods to attract talent and achieve greater gender balance. As set out in AIMA’s paper, The Alternatives, common practices include removing personal information from applications, advertising roles more widely, and interviewing a more extensive longlist of candidates. To retain talent and foster a diverse environment where individuals can thrive, firms might remove potential bias from promotion processes and establish more generous parental leave policies. Bias could be removed through formalizing the criteria for advancement, establishing clear objectives, and adjudicating promotions through promotion committees. 

What policies or programs have you found to be helpful in DEI pursuits?
There are many ways to approach diversity, equity, and inclusion (DEI), but the key is to find what makes sense and works for your firm. What is your structure like? Which jurisdictions do you operate across? How large is your workforce? Some firms find that strategic data-driven approaches with written DEI policies and defined targets are effective. Others find benefit in more fluid and principles-based approaches that follow objectives such as ‘maintaining a culture of respect’. For a policy or program to work, authenticity and action are required. The starting point is understanding what DEI means for your firm and what success looks like. With senior management buy-in, such policies or programs can be sustainable and deliver in the long term. 

Why do you think DEI is important? What value-adds does DEI introduce?
Investment managers have a responsibility to make optimal decisions around the allocation and deployment of capital for investors. Championing and making space for talent from different backgrounds allows for the amalgamation of diverse ideas and experiences, which in turn inspires better decision-making. Alongside the increased DEI supervisory focus of regulators, investors are increasingly preferring to be agents of change and expect investment managers to deliver on both DEI and returns. 

What obstacles do you believe remain for women in the alternatives space, and what tactics have you found helpful in overcoming them?
While greater gender representation is underway, obstacles remain for women seeking to progress to decision-making and leadership roles. 

In addition to inclusive hiring and promotion practices, everyday actions by those not in management positions can also be effective. Standing as an ally, leveraging one’s resources to give a colleague the opportunity to present their work to more senior staff, and providing women in non-leadership roles with opportunities to contribute to business decisions are all ways to deliver change. Alongside these methods, it is important to ensure that the burden of DEI education does not fall on the ‘diverse’ individuals themselves, but is shared among all. 

About
Aniqah Rao is an Associate in the Markets, Governance and Innovation team at the Alternative Investment Management Association (AIMA), focusing on capital markets and digital assets regulation. Aniqah also coordinates industry DEI initiatives, including the founding of AIMA’s Careers Network.
AIMA is the global representative of the alternative investment industry, with more than 2,100 corporate members in over 60 countries. AIMA’s fund manager members collectively manage over $2.5 trillion in hedge fund and private credit assets. AIMA draws upon its membership to provide leadership in industry initiatives such as advocacy, policy and regulatory engagement, and sound practice guides.