Civil rights activist Reverend Al Sharpton sent a letter to Penn President Amy Gutmann asking her to release demographic data about the diversity of Penn’s asset managers.
"While the systematic exclusion of people of color and women from the management of endowment assets has been a question of social justice over time, today it is for me a question of fiduciary responsibility," Sharpton wrote in the April 29 letter. "If a trustee's responsibility is to maximize returns, why are elite institutions using women and people of color at palpably low rates?"
Sharpton asked Gutmann to publish a report on the involvement of African American professionals in the management of Penn’s $14.7 billion endowment. He also requested data on those who internally manage the assets of the endowment, as well as information on asset management firms to which the University outsources endowment management work.
University Spokesperson Stephen MacCarthy wrote in an email to The Daily Pennsylvanian that the letter is currently under review.
Sharpton wrote that under-utilizing high performing women and people of color as asset managers diminishes the University’s ability to maximize returns on its endowment, and said he vowed to place “public pressure” on universities that do not adequately respond to his letter.
Sharpton is president of National Action Network, a civil rights organization that champions the economic rights of communities of color, and has sent similar letters to other Ivy League institutions asking them to disclose the diversity of their endowments.
“We’ve sent letters from NAN to several of the Ivy League schools because we feel as though they’ve represented themselves as great liberal institutions and that ought to reflect in their business dealings,” Sharpton said. “We have, for example, at the University of Pennsylvania, a $15 billion endowment and we want to know — does that include diversity in asset management?”
Sharpton's organization has the support of Robert Raben, a former Clinton administration official who leads the Diverse Asset Managers Initiative.
“A profound problem in the field [of asset management] is the lack of data, the lack of any transparency, among these elite institutions about whom they are working with,” Raben said.
In 2019, DAMI surveyed investment consulting firms to gather data on the racial and gender diversity of people who work in asset management. Raben said the results of the survey show that the “profession itself is profoundly undiverse”.
“In every other area of work at UPenn, people are extremely comfortable talking about their demographics. They talk about the amount of people of color in the entering class," he said. "But when it comes to the same question in asset management, it’s a brick wall.”
According to DAMI, Sharpton’s letters to other universities have elicited responses from three Ivy League schools — Harvard University, Yale University, and Cornell University.
Harvard President Larry Bacow sent Sharpton an email writing that they are “of like mind and aim”. Yale President Peter Salovey formed a President’s Committee on Diversity, Inclusion, and Belonging, after receiving the letter. The office of Cornell’s president shared the letter with the investment committee of the Cornell Board of Trustees.
Sharpton and Raben, however, want each university to issue reports similar to that issued by the University of California’s Chief Investment Office in December 2019, which Sharpton mentioned in his letter to Gutmann.
Raben said the University of California's report is "the gold standard" for how universities should respond to Sharpton's letter, as it describes the racial and gender diversity of the University's own investment team. It also describes how many of the investment office’s partner firms are owned by women and people of color.
Once universities have publicly released demographic information about their endowments, Raben said they should acknowledge areas where they can improve and vet minorities for jobs in asset management “in the same vetting process that [they] had white people in for a hundred years.”
“We’re not asking for charity, we’re asking for an equal playing field to compete,” Sharpton said. “If a woman-owned or minority-owned firm can show us they do a better return on investment, it is our fiduciary responsibility to show the trustees we are going with the best return.”