Diversity in Asset Management

Staying ahead of investors’ expectations.

The way the investment industry operates is changing. Take a typical investment manager filling out a request for proposal (RFP) from an asset owner: a decade ago, the questions centred squarely on track record and process. Today, questions relating to corporate culture, diversity and inclusion figure high on most lists. Everything from the number of women on the board, to LGBT+ representation in the workforce, to diversity programs are likely to be under scrutiny. Due diligence may also seek to elicit how deeply corporate culture is embedded in the fabric of the firm, the diversity of ideas generation and how well a firm embraces a new generation of workers with different mindsets and expectations.

Meanwhile, some investment managers are posing similar questions before they make significant allocations, scrutinising public filings and asking for additional information and explanation.

It is easy to regard these questions as tick-box exercises, and as a problem to be solved. But is diversity and inclusion (D&I) just matter of form filling? Is it a problem or is it the solution? “D&I is about creating a happier, more cohesive, better represented workforce,” says Tracey Flaherty, Global Head of Diversity & Inclusion at Natixis Investment Managers. And the improvement in governance and employee wellbeing should, all else being equal, lead to better outcomes for investors.

So much for the theory. What happens when we take D&I off the written page and put in into practice in the real world?

The D&I journey so far

The investment industry is on a D&I journey. It is probably fair to say D&I is roughly where ESG was a few years ago. That is, entering the consciousness of investment firms, but not yet embedded in the DNA of all of them.

And look at where ESG is now. It has become a critical cog in the asset management industry, with many investment strategies now incorporating ESG factors alongside financial factors. Investor demand for ESG-compliant investments has even spawned a sizeable subset of the industry, with whole investment firms devoted to creating sustainable portfolios. ESG is arguably the Number one investment issue of the day.

D&I is heading in the same direction and consultants, the gatekeepers to the institutional industry, are keenly aware of the direction of travel. “Change can be tough, but it will be worthwhile in the end – D&I is the smart thing to do,” says Mercer. Meanwhile Willis Towers Watson (WTW), says D&I needs to be “woven into the fabric of culture, benefits, pay and workplace practices.”¹ Meanwhile PwC warns that many D&I programs in the investment industry are as yet immature. “There is a gap between D&I effort, understanding and outcome,” argues PwC.


The D&I momentum is rational. A diverse and inclusive workforce enables employees to learn from one another and challenge their own beliefs and conventional thinking. This creates a more dynamic and rewarding working environment that helps attract and retain the best people. D&I can drive growth at investment firms through:

• Leadership – more diverse thinking and better decision making
• Talent – retention of best people drives innovation and future growth
• Clients – better fit with expanding customer base who have more diverse values

What is D&I all about?

Before we look at how the investment industry is incorporating D&I into its practices, let’s take a moment to consider what the important elements of D&I are.

First, diversity. This is commonly viewed as a gender and race issue. In fact, it is much broader and extends to respecting the variation in backgrounds, attitudes, values, beliefs, and lifestyle preferences of all employees.

These variations may exist because of gender, race, ethnicity, nationality and first language. They may also stem from age, mental and physical abilities, sexual orientation, education, religion and socioeconomic situation.


Next, what is inclusion? “We see it as practices that provide an equitable and fair distribution of resources, such as jobs, income and opportunities,” says Flaherty. These practices allow all employees to be appreciated and fully integrated into the formal and informal networks of an organisation.

“In essence, inclusion is about creating a safe and inclusive organisation, which is capable of identifying and eliminating poor behaviours and embracing positive behaviours,” Flaherty adds.

Inclusion may also mean harnessing the strengths of a new generation of workers. The upcoming generation has only known the digital age, and has grown up in a world where values and economics have changed considerably from the preceding generation. The new generation is no less talented than its predecessors and firms must establish structures which facilitate its successful integration.

New mindsets, new skillsets, new tools

Implementing D&I requires actual change. The structures that worked in the past are probably not up to the task of culture change.

Changing the culture of the investment firm starts with leaders and team heads, who must be vocal and visible about D&I issues. Implementation must be done locally, not simply announced at regional or global level. Implementation must be supported by HR policies, transparent data and new metrics which are created from employee surveys, employee experience interviews and by engaging the workforce and stakeholders regularly. Firms should ask themselves: if the current executive team were to leave tomorrow, would the corporate culture remain intact? If not, the implementation process probably needs revisiting.


The output should be assessed using effective data analytics to identify targeted actions which are likely to have the greatest return and largest impact.

Last, and not least, all these efforts must be communicated to staff. If staff cannot locate D&I policies and join activities, then the effort may be wasted.

How to do D&I well in the real world

The ultimate aim of good D&I mirrors other governance initiatives: to improve experiences for clients. Resources to achieve D&I include:

• Training. To improve hiring and promotion processes and cognitive diversity.
• Measurement and accountability. Using KPIs and external certification.
• Better employee benefits and wellbeing. Deliver a sustainable human capital model through mentoring, leave of absence programmes, flexible working, and enhanced healthcare programmes which include mental health provision.
• External commitment. Join relevant associations and groups, and promote initiatives through social media, PR, white papers and events.

Every investment organisation will prioritise where it devotes its resources depending on its D&I aims and workforce profile. The main areas of action for Natixis Investment Managers are gender equality, inclusion and retention of staff with disabilities or illness, intergenerational co-operation and diversity of backgrounds.


Natixis Investment Managers also puts emphasis on developing a family-friendly corporate culture. Examples of this from locations across its global network include flexible work schedules and telecommuting opportunities, and ample maternity and paternity leave allowances. It also offers adoption assistance and subsidised back-up family care assistance. It further offers tuition reimbursement and a student loan repayment program. Training is also critical and the firm offer bias busting and cognitive diversity training programs.

Natixis D&I programs

In 2015, Natixis Investment Managers established a Diversity & Inclusion Advisory Council, and employees are encouraged to initiate new groups of interest. Examples established by affiliates include Multicultural and Diversity Engagement Group (MADE), Adults Building Leadership Experience (ABLE), Women’s Leadership Initiative (WLI) Latino and Friends (LaF).

Other programs include the Women in Natixis Network (WINN), a global network that supports career success and the personal growth of women at Natixis. More than 800 members are engaged in WINN groups across Natixis Investment Managers’ operations in the US, Paris and London.

Today, around 40% of the Natixis Investment Managers workforce (across the holding company, distribution operations and affiliates) is female. Among Natixis Investment Managers investment professionals, 30% are women. Of the trainee and work study positions available, 50% are taken up by women.

Natixis also extends its D&I values to the wider community, developing partnerships with organisations that share its ideas. Partnerships include the G7 Investor Leadership Network, Strong Women Strong Girls, The Partnership and Invest in Girls. We are also very active supporter and partner of a large number of charities and not for profit organisations, including those associated with homelessness, young students and schools.


Of course, no good deed is entirely selfless. Natixis Investment Managers benefits from these partnerships by finding recruits with diverse backgrounds through participation in these activities.

Natixis believes in D&I practices

Natixis Investment Managers encourages its affiliates to consider D&I workplace practices. Natixis affiliates are independently managed and have their own policies and programs in place; however, all entities share a common philosophy on the importance of an inclusive workplace.

As an “active” asset management firm, we espouse long-term investing, patient capital, and strong ethics in our investment operation.