NEPC’s Sam Pollack was recently featured in FIN News to discuss NEPC’s multi-faceted approach to portfolio management when it comes to incorporating DEI. Excerpts from the article are shown below. View the article in it’s entirety on FIN News’ site here.

 

Diverse-owned managers provide an important solution, but not the only one, as endowments and foundations implement investment strategies or policies that incorporate diversity, equity or inclusion goals into their portfolio management.

Though many nonprofits pursue DEI goals with a specific target allocation to strategies managed by diverse-owned firms within their investment portfolios, general investment consultant NEPC prefers taking a multi-faceted approach for its nonprofit clients that goes beyond hiring more diverse-owned or diverse-led managers, said Sam Pollack, a partner and senior member of NEPC’s endowment and foundation practice, in an interview.

. . .

““Yes, we look at a given strategy or firm and if it happens to be diverse-owned or diverse-led. But we want to go deeper and look at what the strategy or firm is doing, what resources do they have access to do this, beyond that firm leadership level. That can extend to accountability reviews as far as their hiring, promotion or retention and their procurement policies as well,” he noted.”

. . .

““We jumped into the fray with the launch of our DEI ratings, which was by design for all managers, not treating diverse owned or divers led as own subset. It’s important to take the same look and shine the same light on all managers and help our clients in seeing what they are doing or not doing,” Pollack added.”

. . .

““The idea of a rating is to share more granular information, not simply mark good or bad, but provide the information to make informed investment decisions,” he noted, adding that many nonprofits lack the capacity to collect the necessary information on their own.

Clients care about this, but they don’t know how to get started or how to start the journey, so to speak. It takes a significant investment in time and resources to dig deeper across the many strategies. We really endeavor to take that deep dive and do it, and to cast that wide net, help clients make productive decisions based on information,” Pollack said.”

. . .

““With the deep dive that we are trying to conduct for clients and make informed and nuanced decisions, seeking out diverse-owned and diverse-led firms is just the first step in that process,” he said.”