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Inclusive Capitalism Program Insights: December 2023

Newsletter
Inclusive Capitalism Program Insights: December, 2023

2023 has been a fruitful and impactful year for the MI Finance Inclusive Capitalism program. Following the release of our first white paper, The Path to Inclusive Capitalism: An Asset Owner Guide for Investment Portfolios, in December 2022, the ICAP program shifted from strategy to action by launching the HBCU Fellows program, connecting with policymakers, and coordinating convenings to incite deeper impact.

In This Issue:

2023 Highlights
On the Horizon for 2024
ICAP News and Trends

2023 Highlights

Milken Institute HBCU Fellows Program Had a Dynamic First Year

HBCU w Key and Tucker 2
HBCU Fellows and ICAP team with actors Keegan-Michael Key and Chris Tucker at the Milken Institute 2023 Global Conference 

 

Fellows and ViablEdu
The HBCU Fellows 2023 Cohort with educational partner ViableEDU Co-founder Joel Brown-Christenson and Strategic Advisor Nancy Wheeler during their graduation reception

 

The HBCU Fellows program launched in February 2023 with the inaugural cohort of 16 Fellows. The program was designed with the students in mind. Throughout the year, students completed a virtual educational course on the foundational concepts of the financial sector, attended conferences around the US, completed summer internships in finance, and connected with industry-leading professionals. Fellows graduated as HBCU Fellow Alumni with a budding network of global finance professionals and a deeper understanding of the financial sector. We extend a special thank you to our key partners and sponsors the Ewing Marion Kauffman Foundation, ViableEDU, the Alternative and Direct Investment Securities Association, Securities Industry and Financial Markets Association, and Levine Leichtman Capital Partners that helped shape a comprehensive inaugural program experience. 

ICAP Program Hosted Thought-Provoking Panels at Milken Global Conference

ICAP Panel
(left to right): Troy Duffie, associate director, Inclusive Capitalism Program; Margaret Anadu, senior partner, head of real estate, The Vistria Group; Ruulke Bagijn, head of global investment solutions, Carlyle; Saira Malik, chief investment officer, Nuveen; Marcos A. Rodriguez, chairman and CEO, Palladium Equity Partners, LLC; and Neal Wilson, co-CEO & co-chief investment officer, EJF Capital, LLC on the Path to Inclusive Capitalism panel

 

asset management panel
(left to right): David Breach, president and chief operating officer, Vista Equity Partners; Sherrese Clarke Soares, founder & CEO, HarbourView Equity; and Edwin Conway, global head, BlackRock Alternatives on the Future of Asset Classes panel

 

In The Future of Asset Classes panel, panelists discussed the importance of creating an inclusive environment within asset management and evaluated how traditional tools and portfolios are evolving, while grappling with other challenges like more inclusive investment teams and impact investment solutions. The Path to Inclusive Capitalism panel discussed how public and private stakeholders can address challenges and enable solutions that ensure high-performing, diverse, and emerging asset managers are valued and seamlessly considered by institutional investors. Panelists highlighted the important role data will have when tracking and evaluating DEI efforts on a larger scale. 

DEI in Asset Management Executive Council Convened for Actionable Impact

 The DEI In Asset Management Executive Council convened quarterly throughout the year, providing strategic guidance on creating an inclusive ecosystem in asset management. Council members made a framework for the second white paper in the Inclusive Capitalism series, Inclusive Capitalism: Seven Strategies for Specific Action in Asset Management, which equips the industry with tangible and actionable solutions in critical areas, including research, talent, and allocation and governance. The paper will be released in January 2024.  

On the Horizon for 2024

HBCU Fellows Program 2024 Cohort Launch Event

The ICAP program received double the number of applications during its second applicant cycle for the second HBCU Fellows program cohort and is thrilled to announce the upcoming cohort of bright, passionate Fellows for 2024. The 20 selected Fellows represent 11 HBCUs in the Midwest, South, and East Coast. Fellows will kick off the program during an in-person launch on January 18–20, 2024. 

ICAP to Kick Off Emerging Manager Convening Series

According to a 2021 study by the Knight Foundation, more than 6 percent of US fund managers across asset classes are diverse-owned but receive about 0.7 percent of US dollars under management. Less than 1 percent of an $87 trillion industry is a drop in the ocean, emphasizing an enormous equity gap for diverse fund managers. To help close the gap, the ICAP program is launching a diverse-owned and emerging fund manager convening series that will bring together diverse-owned fund managers, allocators, and others in asset management to help direct capital with DEI in mind. The first convening will take place during the first half of 2024. 

ICAP News and Trends

US Appeals Court Upholds Nasdaq Board Diversity Rule

In October, a US Appeals Court ruled that the Securities and Exchange Commission did not violate the Securities Exchange Act or the Administrative Procedure Act when it approved Nasdaq's board diversity rule in 2021. Nasdaq’s rule requires each Nasdaq-listed company to have at least two diverse directors, including at least one woman and at least one member of an underrepresented community. The ruling will set a precedent for all corporate boards that enhance transparent and inclusive practices across the industry.

The ICAP Team Represents the Milken Institute at the White House

In December, Associate Director Troy Duffie attended and provided comments at the White House for a roundtable discussion focused on “Fostering a Sustainable Economic System, Closing the Wealth Gap, and Bolstering the US Economy.” The conversation was hosted by Mayor Stephen Benjamin, senior advisor to the president for public engagement, and included Deputy Secretary of the Treasury Wally Adeyemo, Treasury Counselor on Racial Equity Janis Bowdler, Deputy Secretary of Commerce Don Graves, and other administration members.

Executive Council Member Recognized during 2023 CIO Industry Innovation Awards

Carlos Rangel, the chief investment officer for WK Kellogg Foundation, won a 2023 Industry Innovation award from Chief Investment Officer in the Foundations category. Chief Investment Officer annually recognizes allocators driving change and enhancing institutional fund performance and the service providers driving innovation in institutional investing at their Industry Innovation Awards dinner.

Trident Launches Fellowship Program

Milken Institute DEI in Asset Management Executive Council member and private equity firm Trident launched the Trident American Dreams Fellowship program to advance wealth creation for minority professionals and independent sponsors and operating partners (ISOPs). Small businesses are some of the most important influencers of economic growth, but less than 1 percent of all private equity assets under management focus on small business buyouts, as Trident Founder, CEO, and Chief Investment Officer Eric Taylor stated in a recent Pensions & Investments article. Programs that aim to diversify the industry across sectors are integral to creating economic mobility pathways for underrepresented communities.

COP28 Focuses on Climate Financing

Climate financing was a key topic at the United Nations 28th Conference of Parties (COP28) in the United Arab Emirates earlier this month. Efforts to provide tangible financial solutions are critical in creating a more sustainable world geared toward climate resiliency. Multilateral development banks, including the World Bank Group, the European Investment Bank, the African Development Bank Group, and others, released a joint statement presenting concrete actions to scale up finance, strengthen country-level collaboration, and increase co-financing and private-sector engagement. Blended finance solutions also had their moment at COP28. Reuters reported that some of the world’s largest charities joined forces with the World Bank’s private investment arm to launch the Allied Climate Partners platform, a climate financing venture to generate $11 billion in investments in developing countries. During Finance Day at COP28, the Global Climate Finance Centre (GCFC) launched a collaborative initiative between sovereign wealth fund Abu Dhabi Developmental Holding Co., asset managers BlackRock and Ninety One, HSBC, and the World Bank. GCFC takes a collaborative, comprehensive approach to financing climate resiliency on a global scale, and actors at every level, in both the public and private sectors, will need to work together to finance a problem that will take trillions of dollars to solve.