Friday, October 4, 2019 8:00 AM -…
On September 11, Marquette investment consultant Kweku Obed was quoted in a FundFire article on diverse managers and consultants adopting an NFL-style “Rooney Rule” for manager searches to help promote diversity in institutional investment portfolios. The NFL’s “Rooney Rule” is named after Pittsburgh Steelers owner Dan Rooney, and requires teams to interview minority candidates for coaching positions. Marquette will include at least one diversity candidate in every traditional equity and fixed income manager search that meets client investment objectives, minimum investment and vehicle requirements.
Marquette has worked with diverse managers for decades, with increasing focus over the past 10 years. Last year alone, Marquette clients invested over $500 million with diverse managers that were included in searches. Since 2012, Marquette has also requested that all investment managers disclose ownership composition as part of the manager search process. This information is included in Marquette manager search materials for clients.
“What we wanted to do is just reconfirm to the marketplace what we’ve already been doing and just a way to highlight Marquette’s role,” Kweku said. “Unfortunately, in the industry, there’s this notion that you’re giving up quality and ability to do well if you go with a diverse manager. With diverse managers, we’re looking at the best in class and we believe they have the ability to do just as well as other managers. As fiduciaries it’s our job to hit target rates of returns and do it in a risk-controlled manner.”
Approaches to including diverse managers in the search process vary widely among investment consulting firms. In contrast to another firm mentioned in the article, Marquette does not give bonuses to consultants based on interaction with diverse managers. The firm also does not have a separate diverse manager search committee.
“If you ask anyone in the industry and any manager, all they are looking to do is level the playing field,” Kweku said, making the point that a separate committee implies that these managers are not being viewed equally. Marquette’s investment committee reviews and compares managers relative to other managers. A list of the largest diverse investment managers for various asset classes is also published on a regular basis to keep Marquette consultants and clients informed of diversity opportunities. The Marquette research team will not only look at quant-heavy factors like returns, track records and standard deviation, but also the manager’s philosophy. Marquette has an open-door policy with diverse managers and hosts diverse manager events throughout the year, with the next one taking place either at the end of this year or early 2019.
FundFire has featured Marquette expertise on diverse and emerging manager search in several articles recently, including an article in May on an emerging managers merger and an August 2017 article on the increasing use of emerging managers by endowments and foundations.
The July 2017 Investment Perspectives newsletter, Don’t You Know, We’re Talking About An Evolution?, contributed to the institutional investor community conversation on the measurable benefits of incorporating diverse investment firms by exploring solutions to top challenges.
To read the article, visit the FundFire website (subscription required).
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