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AIMA and Albourne launch new initiative to strengthen diversity and inclusion within hedge fund industry

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The Alternative Investment Management Association has launched a new initiative aimed at improving transparency around diversity and inclusion within the global hedge fund and alternative investment industry.

Hedge fund industry trade group AIMA, in partnership with investment consultancy Albourne Partners, has unveiled the voluntary Diversity & Inclusion questionnaire, which looks to gauge how the industry is improving diversity within firms.

Specifically, the questionnaire – which is freely available to alternative investment managers, investors and service providers – will help investors better probe asset managers on the measures they are taking to improve representation of women, racial and ethnic minorities, LGBTQ+ individuals, veterans and persons with disabilities within their firms, as well as on their efforts around equal recognition, respect and merit-based evaluation in the workplace.

AIMA and Albourne said that while interest in improving diversity and inclusion is surging across the industry, with the benefits of a diverse workforce “well documented”, the practical aspects of achieving this remain a work in progress.

“We acknowledge that for smaller firms it might be difficult to know where to start,” said Adam Jacobs-Dean, managing director and global head of markets, governance and innovation at AIMA.

“That’s why our paper offers ideas for all sizes of firm, and we have approached the DDQ with the same logic of ensuring that firms of all sizes can make use of it.”

The questionnaire is based on the relevant section of the ILPA Due Diligence Questionnaire published in September 2018, incorporating feedback from both Albourne and AIMA members, as well as a number of institutional investors and investment managers.

Tathata Lohachitkul, portfolio analyst at Albourne, said that take-up of the questionnaire would help incorporate diversity and inclusion considerations into due diligence processes, in turn “serving as a catalyst for managers to reflect and improve upon their D&I policies and practices.”

The questionnaire builds upon The Alternatives, an AIMA paper launched last November which set out 45 practical steps that industry participants can take to improve diversity and inclusion – from how they find new recruits to how best to develop their existing talent.

Lohachitkul, who worked on the questionnaire initiative, added: “We understand that most managers are at the early stages of thinking about D&I; however, incorporating this questionnaire into their reporting processes is an important step in providing investors with insight into managers’ current and planned D&I policies and practices.”

Jonathan Grabel, CIO of Los Angeles County Employees Retirement Association (LACERA), described the initiative as an “important contribution” in advancing transparency and best practices.

“Diversity and inclusion is a fundamental part of LACERA’s investment philosophy and strategy,” Grabel said. “LACERA actively assesses current and prospective investment partners on how they effectively access, develop, and retain diverse talent and cultivate inclusive workplaces to achieve the best outcomes.”

Kate Misic, head of alternative investments, Telstra Super Pty, said: “Our industry has a duty to be prudent stewards of capital. To do nothing about diversity and inclusion, we accept running our economies on half power.”

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